The sad story of the stranded Bitcoin miners in Kazakhstan: “there is no future”

The sad story of the stranded Bitcoin miners in Kazakhstan: "there is no future"

A few months after China banned Bitcoin mining, Kazakhstan emerged as the second territory, after the United States, with the highest concentration of mining power or hash rate on the network. The Central Asian country welcomed many miners who fled the crackdown. They arrived full of optimism, but today their situation is different, since their future is uncertain.

In less than a year, a series of unfortunate events has affected the miners who are deployed in the region. They believed they had everything a Bitcoin network soldier could need: a cold climate, legions of old warehouses and factories where their equipment could be installed, and especially very cheap power. But, they never thought they would have to face power and Internet outages, popular unrest, and Russian troops roaming the country, which has affected mining production, as first reported by CriptoNoticias.

More than 87,800 Bitcoin mining equipment would have entered Kazakhstan from China since June of last year, according to a estimate of the Financial Times. Therefore, the country’s electricity demand has increased about 8% since the beginning of 2021, a strong increase when compared to the 1 or 2% annual growth that it usually experiences.

In fact, last year, government officials pointed to Bitcoin mining for the problems that its electrical network has been presenting and, to deal with the shortage, the national operator KEGOC began cutting power to some miners in September. This situation has affected mining operations for months.

“From 6 p.m. to 11 p.m. [los proveedores de energía] sometimes they cut the electricity to our mining farms,” ​​Didar Bekbauov, founder of the Xive mining company, was quoted as saying. review of the Wired medium. Another digital mining worker identified as Rusinovich said that miners lost “tens of millions of dollars” a month due to power outages.

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Recently, to protect farms during protests, many miners decided to spend money on additional security to protect their farms during protests.

Alan Dorjiyev, president of the National Association of the Blockchain and Data Center Industry of Kazakhstan said: “I talked to all the owners of the mining sector and they told me that they have increased the security of the facilities, because the equipment is quite expensive. », as reflected in the aforementioned report.

Many believed security was needed to be stepped up, even though most of the mining farms are located in the north of the country, far from the turmoil of recent protests.

The sad story of the stranded Bitcoin miners in Kazakhstan: "there is no future"
Bitcoin mining was paralyzed due to power and internet outages in Kazakhstan due to protests against rising fuel prices. Source: YouTube Reuters.

Mining Bitcoin in Kazakhstan, despite everything

All evil is concentrated in Kazakhstan at the moment, but some believe that they should stay there, even if they feel stuck. That’s what Alex Brammer, vice president of business development at mining company Luxor Tech, believes, speaking with Wired. He says that there is currently a shortage of suitable spaces for the location of mining farms in the United States, Canada or Russia.

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The sad story of the stranded Bitcoin miners in Kazakhstan: "there is no future"

Whoever gets a suitable facility and decides to move to another country from Kazakhstan will still need additional time and resources to move their equipment. Even some doubt that the effort is worth itadded the miner.

Bekbauov said shipping ASICs to the US from Kazakhstan, for example, would take more than two weeks, and the journey could end up damaging equipment. “Transporting used machines is more delicate because they are more vulnerable to damage,” he added.

Leaving Kazakhstan is not an option for Rusinovich. In fact, he has no plans to move his teams at the moment because he is concerned that, due to the current political tensions, traveling in and out of the country becomes much more challenging.

However, there are also those who believe that the political situation that Kazakhstan is going through at the moment could distract the government from going ahead with the plan to regulate the mining industry, as Dorjiyev pointed out.

“Kazakhstan is not where the future is,” Rusinovich said. That is why it is not ruled out that a good number of miners will leave Kazakhstan with the idea of ​​settling elsewhere. But nevertheless, they fear that the teams will remain in the Asian region, but that they will not be able to produce, with which the country would soon become the second China, even without wanting it.

The sad story of the stranded Bitcoin miners in Kazakhstan: "there is no future"
Some miners prefer to stay in Kazakhstan rather than face the challenges of finding a new place to settle outside the country. Source: YouTube Reuters.

Latin America, open doors for Bitcoin mining

While Bitcoin mining spaces are scarce in the United States, Canada and Russia, Latin America is emerging as one of the regions that offers the best conditions for miners.

In El Salvador, for example, there is already a “plan to offer facilities to mine Bitcoin with very cheap energy, 100% clean, 100% renewable and with zero emissions, taking advantage of volcanic activity,” as Salvadoran President Nayib Bukele pointed out to middle of last year.

El Salvador also has other sources that can encourage Bitcoin mining. Not only because the Central American country is building its fifth large hydroelectric plant, but also because builds the largest wind farm in the region.

On the other hand, the company AES El Salvador inaugurated, in 2020, the Opico Power solar power plant, which generates 5.2 MWp of sustainable energy. The same company previously installed the Moncagua solar plant, and developed another similar project called Bósforo, which generates 100 MW of renewable energy through 10 solar plants.

Argentina too stands out as a Latin country with potential for Bitcoin mining. In fact, the Canadian company Bitfarms Ltd. is moving forward with its plans to build a gigantic Bitcoin mining center in this country, a project it has been working on since October of last year.

There is also Paraguay, whose government is interested in exploiting the mining business in its territory. Also, because of the nation’s vast sources of cheap, renewable hydroelectric power, it is now considered by many to be “a paradise” for Bitcoin mining.

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