Wednesday, January 26, 2022
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By Mayowa Adebajo
Published 12 mins ago Updated 10 mins ago

Following the political unrest in the country that saw the sitting cabinet resigning, the Kazakhstan government has now shut down the nation’s internet with immediate effect. And while there is no timeframe for how long the shutdown will last for, the Wednesday action has dealt a major blow to Bitcoin mining activities within the country.

Bitcoin Hashrate Dips By Over 13%

When the state-owned telecommunications company Kazakhtelecom shut down the internet, network activity immediately nosedived to 2% of the daily heights. As earlier mentioned, the move did not come without its own downsides as far as Bitcoin hashrate is concerned.

As it is, Kazakhstan is arguably the second-largest country in the world, in terms of Bitcoin (BTC) hashrate. However, data available from YCharts.com has shown that the overall hashrate of the Bitcoin network has now dipped by 13.4%, just a few hours after the shut down began. At press time the hashrate had become 177,330 petahash per second (PH/s) as opposed to about 205,000 petahash PH/s it was initially.

Meanwhile, the impact the shutdown has had so far, is not exactly far from expectation. That’s because the country accounts for 18% of all the Bitcoin network’s hash activity.

Root Cause of The Protests

The ongoing protests is as a result of the Kazakh government removing subsidies on liquefied petroleum gas used for car fuel due to present market conditions. The subsidy removal led to an overnight doubling of gas price, sparking violent protests across the country.

As at press time, the internet still remains down in Kazakhstan, and there’s no official word yet regarding when the internet will be active again.

Meanwhile, Kazakhstan has been a major attraction to Bitcoin miners in recent times due to its low energy prices. According to Global Petrol Prices, electricity in Kazakhstan costs just $0.055 per kWh on average for businesses, a very low fraction of the $0.12 per kWh being paid by U.S. businesses.

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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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