No oil, gas or minerals, bitcoin mining reigns in Kazakhstan

No oil, gas or minerals, bitcoin mining reigns in Kazakhstan

One of the largest Bitcoin mining complexes in the world is now located in Kazakhstan. The country is currently the second with the highest concentration of mining power or hash rate (hash rate) of the network. This since China banned digital mining, leaving the way open for its Central Asian neighbor to host many miners who have fled repression.

Kazakhstan produces about 18% of the computing power that is generated in the world to extract the pioneer of cryptocurrencies. The figure places it behind the United States, which contributes 35%, but ahead of Russia, which concentrates 11%, as reported by CriptoNoticias.

At present, the city Ekibastuz located in the province of Pavlodar, northeast of Kazakhstan houses a bitcoin mining farm with 50,000 ASIC equipment They are powered directly by the local coal-fired power plant.

It is one of the largest bitcoin mining centers in the country, which is strategically located in what is known as the capital of coal, since it has one of the largest deposits in the nation.

Energix, the company that operates the site, invested some USD 25 million to build the facilities in 2019 and so far has eight hangars with more than 5,000 computers each that extract bitcoin 24 hours a day. The farm consumes about 180 megawatts of power to guarantee its operation, according to data from digital medium RTS Info.

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The Kazakh company that operates the site, with European and Asian allies, achieves an annual return in excess of USD 100 million.

Farm manager Yessain was trained in China by ASIC equipment manufacturer Bitmain. “He came back here and trained us and now we are training more personnel,” said Yerassyl, the head of one of the hangars, who was interviewed by the aforementioned media outlet.

No oil, gas or minerals, bitcoin mining reigns in Kazakhstan
In the city of Ekibastuz is one of the largest mining centers in Kazakhstan, which houses some 50,000 specialized equipment to extract bitcoin. Source: YouTube / RTS Info screenshot.

Digital mining is booming in Kazakhstan

Alan Doriyev, president of the Kazakhstan Bitcoin Miners Association stated that indeed activity is booming in the country as many miners are arriving to settle in its vast territory.

There are several elements for which bitcoin miners select Kazakhstan to install their hubs. It is because the region offers several advantages for the industry to flourish, as Doriyev pointed out to the French media.

I think that Kazakhstan has several elements that favor bitcoin mining. One is the price of electricity which is quite cheap. And second is the weather that we have, because right now we are in the month of October and we have zero degrees, which is really good because bitcoin mining needs fresh air and low temperatures to cool the equipment. In addition, in third place, there is the very attractive fiscal environment for investors that the country offers.

Alan Doriyev, President of the Kazakhstan Bitcoin Miners Association.

The Kazakh government is clear about the potential of bitcoin mining, at least that was what Orazbek Askhat, deputy minister of industry of the Republic of Kazakhstan, pointed out.

When we announced in 2019 that Kazakhstan would regulate cryptocurrency mining, we saw that large investors interested in infrastructure construction arrived very quickly and we are now in second place in terms of mining capacity. This advance puts us in the perspective that we must continue to advance in this same branch, so the objective is to go step by step and promote the development of infrastructure in the blockchain industry and its associated domains.

Orazbek Askhat, Deputy Minister of Industry of Kazakhstan.

No oil, gas or minerals, bitcoin mining reigns in Kazakhstan
The Kazakhstan Bitcoin Miners Association has issued hundreds of permits to many of those who left China recently. Screenshot YouTube / RTS Info.

The official analyzed the current panorama and is surprised at the boom in digital mining in his country, especially because the exploitation of the soil to extract natural resources is part of the culture of the peoples of Kazakhstan.

“Originally the Kazakhs, like the nomads, had a tradition to extract resources from the ground and trade with neighboring peoples, and still mining these resources allows us to earn money to become richer,” he added.

What he points out is understandable if one takes into account that Kazakhstan has a territory rich in natural resources such as oil, gas and minerals.

However, Askhat believes that digital mining and cryptocurrencies, as well as the development of projects based on blockchain, are part of the present and the future of his country. For this reason, he is convinced that the government’s efforts should focus on promoting its development.

Bitcoin mining presents challenges to Kazakhstan

The bitcoin mining boom in Kazakhstan also presents challenges, as noted by the president of the bitcoin miners association, Alan Doriyev. its concern revolves around the number of permits that have been granted to miners that they are entering the country and “that puts the national electricity grid at risk,” as he explained.

No oil, gas or minerals, bitcoin mining reigns in Kazakhstan
Alan Doriyev, president of the miners association of Kazakhstan believes that it is necessary to handle with prudence in the face of the digital mining boom in the country. Screenshot YouTube / RTS Info.

On the one hand, he applauds that the government is observing that the bitcoin mining industry is growing. But, he is also aware that the stability of the nation’s electrical system cannot be put at risk. “We cannot reach the situation where it would be necessary to cut electricity to the population,” he adds.

For this reason, “right now we are trying to sustain an agreement with the government to find a solution to this situation,” said Doriyev, without giving details about the terms that are considered as part of the treaty.

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