The global bitcoin network's hashrate has dropped dramatically this week following the shutdown of Kazakhstan's internet due to ongoing unrest in the country, a Reuters report explains.
The Bitcoin hashrate is the measure of the global computing power of Bitcoin mining, comprised of individual crypto miners and organizations the world over.
Last year, Kazakhstan became the world's second-largest center for bitcoin mining, after China banned Bitcoin mining in May, leading to what has been dubbed the "great mining migration," with many of the country's miners crossing the border to Kazakhstan. The world's largest center for Bitcoin mining is the United States, according to the Cambridge Centre for Alternative Finance.
Now, Kazakhstan's countrywide fuel price protest against its government, during which dozens of rioters have been killed by riot police in the city of Almaty, has led to the internet being shut down across the entire nation. The move, carried out by Kazhakstan's government to prevent protesters from organizing and mobilizing, will have likely blocked Kazakhstan-based crypto miners from connecting to the Bitcoin network.
Bitcoin's hashrate will likely recover amid environmental concerns
According to data from mining company BTC.com, the hashrate of crypto mining pools — globally distributed groups of miners — including F2Pool and AntPool was down 14 percent on Wednesday from its level late on Tuesday.
The price of Bitcoin, meanwhile, fell below $43,00 on Thursday, a three-month low, which is also partly due to fears over the Federal Reserve's aggressive tightening policies, according to CoinDesk.
The hashrate will likely recover quickly if events following China's ban on Bitcoin mining are anything to go by. In December, we reported that the hashrate had already recovered to its pre-May levels before the mining ban, due in part to the aforementioned "great mining migration".
In February last year, EV automaker Tesla made a $1.5 billion investment in Bitcoin, which led to an unprecedented surge in global cryptocurrency investment. However, the company later made a u-turn on its decision to allow crypto transaction citing the digital coin's adverse effect on the environment. Last year, an analysis by the University of Cambridge showed that the global Bitcoin network consumes more electricity than entire countries, including Argentina and the United Arab Emirates.