Crypto-miner in Kazakhstan stand before a bitter winter with power outages
Crypto-miner in Kazakhstan stand before a bitter winter with power outages
Matthew Heard, a software engineer from San Jose, is worried about his 33 Bitcoin mining machines in Kazakhstan. They were always switched off last week to limit the electricity consumption of the crypto miner.
"It was days since my machines were online," he said. "During the past week my machines, even if they are switched on, hardly stop."
Kazakhstan fights with the enormous popularity of crypto mining, which is partly pushed to its limits this year by the steep increase in cryptocurrencies and partly by mass migration of miners after China illegal in May.
After three large power plants in the north of the country were switched off last month, the state network operator Kegoc warned that he would start rationing electricity for the 50 crypto miner registered with the government, and said they were "first separated from the network". “If the network has problems.
Heard was founded in Kazakhstan in August and his machines are managed by Enegix, a company that rented space for the operation of crypto mining machines.
He said that his income had dropped from an average Bitcoin value of $ 1,200 a day to $ 800 in October, and last week his machines were only 55 percent of the time. Machine owners are not notified when shutdowns take place or when they go online again, he said.
The pressure on the network caused by crypto mining operations has led to power failures in cities and villages in cities and villages in six regions of the country. The Ministry of Energy estimates that electricity demand has increased by 8 percent since the beginning of 2021, when mining companies from China has increased by 8 percent, compared to 1-2 percent in previous years.
According to the FT, at least 87,849 electricity -intensive mining machines from China were brought to Kazakhstan.
The Kazakh mining company Xive.io, which asks customers abroad to connect their machines at its locations, closed a large crypto mining farm on Wednesday and dismantled 2,500 mining rigs after electricity shortages had made its operation.
Russian energy companies will intervene to increase the offer, but this will probably not be enough to stop power outages for crypto operations in Kazakhstan this winter © Pavel Mikheyev /Reuters
authorities and industry experts are responsible for the number of "gray miners", companies and individuals who have been operating illegally from cellars and abandoned factories from operating since the ban. The Ministry of Energy estimates that they suck 1200 MW of electricity from the power grid - twice as much as the registered “white miners”.
In October, Vice-Energy Minister Murat Zhurebekov said a reaction to her activities "can no longer be delayed".
Denis Rusinovich, co -founder of the Maverick Group, a mining service company working in Kazakhstan, said that some miners operate legally, but "have taken too quickly and have made cuts". These miners "are targeted because they have no paperwork," he said.
In order to compensate for the bottlenecks, legitimate miners have to pay a surcharge of 1 Kazakh Tenge (0.0023 USD) per kWh from 2022, a step that miner see and Rusinovich positively because it will classify the official miner.
Until the entry into force of the levy, Kazakhstan turned to Russia to increase its reserves and has taken up discussions with the Moscow energy company Inter Rao to strengthen national energy supply. On November 16, deputy Russian Prime Minister Alexander Novak announced that Russian companies would supply its southern neighbors with electricity. He did not name exactly costs.
It is unclear when the new energy delivery from Russia will arrive in Kazakhstan, and it is unlikely that it will be sufficient to give the crypto miners affected by the winter current failures. The chairwoman of the Inter Rao board Alexandra Panina told the Russian news agency Tass that the company could deliver 600 MW "in an ideal scenario" while the scarcity 1 GW could reach.
The Ministry of Energy and Inter Rao did not respond to inquiries about comments.
Some foreign miners such as Ricky Hoo from Sydney, who owned 40 machines in Kazakhstan, which were also managed by Enegix, have started to shift machines to another location despite the 12 percent export tax of the country.
"Kazakhstan was one of the first places I sent to Miner because there was cheap electricity there, but now everyone is completely switched off," he said. He sent part of his machines to Russia, the third largest mining land to Kazakhstan.
The cuts also raise new concerns about the long -term sustainability of the energy infrastructure of Kazakhstan. Luca Anceschi, professor for Eurasian Studies at the University of Glasgow, said that the government's focus on “gray miner” is an attempt to gloss over more extensive structural problems such as the lack of maintenance of the network and the inability to transport electricity from the north of the coal north. Kegoc has announced that it wanted to carry out maintenance work on damaged systems and power lines.
"The electricity from Russia can certainly solve the problem at short notice, but I think there is a big discussion about what kind of energy policy Kazakhstan is actually pursuing," said Ancechi. He argued that the government believed that Bitcoin mining was profitable, but had not taken care of creating production capacities that could actually satisfy the existing or future demand.
"This is one of the most high -energy countries in Asia," said Ancechi. "That shouldn't have happened on paper."
Source: Financial Times
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