Kazakhstani Crypto Miners Are Facing an 'Energy Crunch' As Exiled Chinese Miners Flock In
Cryptocurrency miners in Kazakhstan are facing power outages as Chinese miners flock to the country because their nation has made crypto mining illegal, according to the Financial Times. Back in September of 2020, China's central bank declared all cryptocurrency-backed transactions illegal within its borders, arguing for the ban of the digital currency amid national concerns about the country's borders and "safety of people's assets."
“It has been days since my machines have been online,” Matthew Heard, a software engineer from San Jose, told the Financial Times. “During the last week, even if my machines do come on, they barely stay on.”
The Financial Times further reported that over 87,849 mining rigs have come to China from Kazakhstan, putting the country in the number two spot (behind the U.S.) as a leading crypto mining region, according to the University of Cambridge.
Now, Kazakhstan Electricity Grid Operating Company (KEGOC) has informed crypto miners that it will begin rationing power to its 50 registered crypto miners to avoid repeated power outages. The government believes the power crunch is due to a rise in “grey miners" who illegally mine for crypto.
An 8% spike in consumption
Kazakhstan's Ministry of Energy estimates that these new crypto miners have caused a demand for electricity that has increased by 8 percent since the start of 2021. Comparatively, the usual annual growth experienced in the country has been between 1 and 2 percent in previous years. The country plans to start making legitimate miners pay up starting from 2022.
Just this week, we reported that Google released a new report stating that malicious cryptocurrency miners were using hacked Google Cloud accounts for mining purposes. In the past, we have also brought you news of illegal massive mining rigs. It seems that crypto mining is here to stay no matter the consequences.