As a reminder, cryptocurrency mining based on the Proof-of-Work consensus algorithm is a really energy-consuming task that threatens the power supply of entire states. For example, in May, the Iranian government issued a ban on cryptocurrency mining for several months until September.

The reason for this was a power outage, which could have left ordinary residents without electricity as well.

To illustrate the demanding nature of the Bitcoin network, we can recall a table in which Solana project representatives estimated the energy consumption of various popular activities and compared them with the activity in the cryptocurrency world.

Transaction costs of the cryptocurrency network

From this we can conclude that processing transfers on the Bitcoin network requires a huge expenditure of energy. This is primarily due to the popularity of BTC mining, which causes significant competition in the niche. And it is this problem that is being experienced by entire countries.

Where Bitcoin mining is most active

Initially the Kazakh government was neutral to the influx of miners, but when they began to consume too much electricity, they began to impose certain restrictions on them. According to the Cambridge Bitcoin Power Consumption Index (CBECI), Kazakhstan’s share of the cryptocurrency hashtray grew from 6 percent to 18 percent from the beginning of the year to August. That is, the country has very quickly become the second-largest presence of miners in the world, ahead of Russia.

Share of different countries in the Bitcoin hashray

However, the aforementioned data was released by Cambridge University experts back in August, which is more than three months ago. In the intervening time, Bitcoin’s hashrate has increased markedly. And even if the share of Kazakh miners in it has remained the same, the total capacity of their equipment has increased from 19.7 to 28.2 million terahashes per second.

In comparison, a mining centre with 2,500 devices, such as the one Xive was recently forced to close in southern Kazakhstan, generates "only" 57,500 terrahes per second. That is, the total processing power of the country's miners is equal to about 147 such centres.

As noted by Decrypt representatives, Xive co-founder Didar Bekbau said back in October that local miners have serious problems with power supply. Due to frequent power outages, many of them were once again forced to pack up their equipment and move to another location. As we have already noted, the day before the same fate befell one of the Xive centres. Beckbau posted a video of the mining centre shutdown on his Twitter account.

Kazakhstan has historically produced twice as much energy as it consumes, according to the non-governmental organisation International Energy Agency. Meanwhile, the GlobalPetrolPrices reports that the country’s energy prices averaged $0.04 per kWh in March. That’s half the average mainland Chinese tariff and almost three times the US tariff.

Bitcoin’s hash rate has almost doubled since July this year

According to the National Association of Blockchain and Data Centre Industries, the Kazakh government expected mining to generate $1.5 billion for its economy over the next five years. But many miners are still operating in the country without any registration and paying almost no taxes, so their presence does not bring any benefits.


We believe that a surge in energy consumption in the country amid an influx of Bitcoin miners is fairly predictable, but states need to be prepared for them. Otherwise, there could be problems in the electricity supply that will affect ordinary citizens. And tax payments from such activity cannot always be guaranteed.

Look for even more interesting things in our millionaires’ crypto-chat. There we will talk about other topics related to blockchain and decentralization.