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Kazakhstan took a toll on the Bitcoin mining industry as an energy crisis provoked a series of protests and political instabilities last week. Russia allegedly sent "peacekeeping forces" into the Central Asian country at the request of President Kassym-Jomart Tokayev, a movement that triggered the revolt in the region. besides higher gas prices, kazakhstan’s current intermittent energy and internet access have led to instability in bitcoin mining operations there, hurting the broader bitcoin network’s hash rate — an estimated 18% of which was housed in the central asian country as of july 2021.
didar bekbau, a co-founder of kazakhstan-based bitcoin mining company xive, explained in a twitter thread that despite a broader negative sentiment regarding the future of bitcoin mining in the country, the current situation should be temporary as he expects kazakhstan to be a “mining harbor” in the long term.
'There is enormous potential for the construction of new power plants [in Kazakhstan],' said Mr Bekbau, adding that the outlook is good for traditional and renewable energy sources. However, he stressed that political stability and foreign capital are crucial for advancing the industry in the Central Asian country.
Concerns have also been raised about the security of Bitcoin mining operations as riots confront police forces in violent clashes.
Bekbau said such conflicts have been mainly in the south of the country while mining is concentrated in the central and northern regions.
"This is quite a safe situation for mining locations and facilities," bekbau said. after the protests ensued, tokayev declared a nationwide state of emergency, cutting phone and internet access across the country, the washington post reported. After the protests that followed, Tokayev declared a state of national emergency, shutting off telephone and Internet access across the country, reports the Washington Post.
about 6,000 people have been detained and 164 killed as russian troops act on tokayev’s order on friday to security forces to “shoot to kill without warning” as the president says foreigners are behind the turmoil, the financial times reported on monday.
As per the report, tokayev first responded favourably to the dissatisfaction of the people, agree to reduce fuel costs, But as protests intensified his position has changed rapidly as he blamed the unrest on outside "conspirators" and appealed to the russian-led collective security organization for military troops to help in what he called an "anti-terrorist operation."
marathon digital holdings ceo fred thiel tells bitcoin magazine that some bitcoin mining operations he has had contact with have hired private security forces to contain possible threats and preserve personnel and facilities from eventual negative impacts stemming from the protests.
"right now, there were 125 criminal cases filed, and 5800 persons, among them there are a large number of foreigners, were taken to the police,' said tokayev's office, for the report. Marathon digital holdings ceo fred thiel tells bitcoin magazine that some bitcoin mining operations he has had contact with have hired private security forces to contain possible threats and preserve personnel and facilities from eventual negative impacts stemming from the protests.
Thiel adds there are concerns about the government shutting down bitcoin mines and confiscating equipment, a kind of environment that is not very welcoming to the industry. Despite the high costs associated with moving operations overseas, according to thief, the biggest barrier is general instability and lack of security, which make the safe relocation of equipment and personnel impracticable while foreign and local military forces patrol the country and clash violently with protesters.
Kazakhstan is always filled with uncertainty and large Bitcoin mining operations have gone offline, but the impact is limited and should be short-lived, bekbau said. according to the ft report, the u.s. secretary of state anthony blinken condemned tokayev’s “shoot to kill” order as he urges the country to tolerate peaceful protests while bashing at the president’s calling for russian help, saying, “these ought to be things that the government of kazakhstan can handle on its own.”
Kazakhstan's strategic geographical position between russia and china and its huge uranium reserves, that account for about 40% of global supply, render it vital to international diplomacy, the need for political and military stability in the central asian nation. the timeline is uncertain, however, as according to the ft report, deputy defense minister sultan gamaletdinov said the counterterrorist operation would continue “until the terrorists are completely eliminated and the constitutional order is restored in the republic of kazakhstan.”
