Internet is down on Kazahstan, Bitcoin Hashrate drooped, Price affected?

[GreatArkansas]

An Internet connection from Kazahstan was shut down and it could be possible because of protest from the gas price.

I saw a tweet from @lawmaster - https://twitter.com/lawmaster/status/1478764142957846531/photo/1
Where pointing that there is dropped about -12% from hash rate of Bitcoin about 10 hours ago and if you can see we saw a dumped on the price of Bitcoin.

Could this be the reason for dumping? Bitcoin dumped for almost 10% from $46,000 down to sub $42000.

[Charles-Tim]

Kazakh miners are the second that generate bitcoin mining hashrate generating about 18.1% of the total while United States is the first with a total of about 35.4%. This can lead to some people thinking the protest in Kazakhstan that led to the Kazakh government to shot down the internet leading to 13.4% reduction in the hashrate Kazakh miners are generating could lead to bitcoin price reduction.

But, this is what I read recently about Federal Reserve's December FOMC meeting that might be connected to bitcoin price reduction:

Bitcoin (BTC) and the wider cryptocurrency market fell under as equities markets pulled back at the closing bell after minutes from the Federal Reserve's December FOMC meeting showed that the regulator is committed to decreasing its balance sheet and increasing interest rates in 2022.

As stock markets corrected, BTC price followed suit by dropping below $44,000, setting off a cascade of liquidations that reached $222 million in less than an hour.

Although, I am not certain what could have caused this recent drop but more linked to when the meeting surfaced to showed that the regulator is committed to decreasing its balance sheet and increasing interest rates in 2022.

I do not think the mining hashrate reduction in Kazakhstan caused this. Also that the mempool is not even congested at all. Even if the mempool is congested, I do not see how people could sell off their bitcoin all because of what is happening in Kazakhstan that led to reduction in mining hashrate as a result of internet shot down.

[pushups44]

Bitcoin is down because the Federal Reserve will be raising interest rates in 2022 and also because there is an unlocking of about 100,000 BTC from MtGox this month, I believe. This drop in price, and any further decline, presents an opportunity for those who were waiting for lower prices to get into BTC, IMO.

[crwth]

I don't think there's a direct correlation between the drop in hash rate with BTC and its price. Maybe the negativity with the news on it affected the people speculating before (with the cost of BTC increasing) and now decreasing and are just taking profit or cutting losses that they may have. Or maybe someone just dumped their bags because they need them so much, possibly with the new year or something.

What other parameters can we check to see if the two variables are connected?

[pooya87]

Could this be the reason for dumping? Bitcoin dumped for almost 10% from $46,000 down to sub $42000.

It could be but mostly because of the current market sentiment that price didn't go up so there is a tendency for going down so any news, even the most irrelevant ones (hashrate drop is relevant though) can easily cause a drop. So basically people are waiting to panic sell and they do it as soon as they get an excuse.

[franky1]

bitcoin hashrate swings from 160exa to 200exa range
12% is only about 20exa. so within range of the norm.. thus no effect on day to day activity

what you will find is people in Kazakhstan cannot mine, so they cant get bitcoin... but their internet is down, so they also cant purchase from the market either. nor can they sell any coin they had mined the day before.

over all. kazakhstan wont affect the price. they wont be jumping on the market + or -. as they have no access.

what you will find is americans, europeans now get a 12% better 'luck' of them winning a block. or more precisely american/euros get a few more shares of the reward than they did because their kazakh's pool partners are not there doing the work taking slices out of the reward pie away from other countries in the pool

if americans are getting a 12% bonus then it brings their average 'cost' of mining of $40k/coin to now earn them more sats per block. and so they may want to sell a bit sooner as its slightly more profit.

but with that said because kazakh's are not mining and not able to access the markets to sell rewards. their lower $30k mining cost/coin means they are not going to be selling today. which will counter any sell pressure the americans might cause.

this 12% ~ 20exa change is not out of the scope of normal daily movement.. so not really a game changer to the markets.

[hatshepsut93]

IMO this is all very short-term and irrelevant in the grand scheme of things, but a precedent of a country shutting down Internet is much more interesting. This just shows that currently, until there's resilient decentralized Internet technology, Bitcoin can't be considered a silver bullet for financial freedom at times of tyranny. What would a person who went 100% on Bitcoin do right now in Kazakhstan, when they can't even convert it to fiat? And banks have stopped working there too, so only good old paper money change hands there.

[franky1]

IMO this is all very short-term and irrelevant in the grand scheme of things, but a precedent of a country shutting down Internet is much more interesting. This just shows that currently, until there's resilient decentralized Internet technology, Bitcoin can't be considered a silver bullet for financial freedom at times of tyranny. What would a person who went 100% on Bitcoin do right now in Kazakhstan, when they can't even convert it to fiat? And banks have stopped working there too, so only good old paper money change hands there.

the UN is trying to make the internet a basic human right. much like water.
where utility companies and governments cannot just stop citizens access to basic utilities on mass.

you may see temporary 'delays to service' or curfews or however you can word it. but if a government under UN rule were to permanently cut off access to utilities for all citizens. then that country can get into alot of trouble with the UN.

in the future you might see for instance if there was another US capital riot. US might temporarily switch off internet in washington neighbourhoods, to break communication methods of rioters. but trying to have a mass internet cut off of america entirely and permanently would result in UN putting sanctions on america until they re-establish internet connectivity.

[davis196]

The news coming from Kazakhstan(and the news about the Federal Reserve) definitely have some FUD value and they can definitely cause some panic across a part of the crypto traders.
Having the hashrate dropped isn't such a big deal,because the mining difficulty will be adjusted after a awhile.
Internet in Kazakhstan won't be down forever,but I'm not sure about the political situation in this country.
Perhaps the future government of Kazakhstan won't be so Bitcoin/crypto friendly and it might try to kick out all the Bitcoin/crypto miners of the country.Mostly because of the usual BTC hater arguments-wasting energy,damaging the environment,bla bla bla...
However,I'm just speculating about this.

[Charles-Tim]

but a precedent of a country shutting down Internet is much more interesting. This just shows that currently, until there's resilient decentralized Internet technology, Bitcoin can't be considered a silver bullet for financial freedom at times of tyranny.

The internet can not be shut down for ever, it can only last for a while and peculiar to a country or region like state, town or village, but your bitcoin remain your bitcoin, you are only the one that have the access to its seed phrase if using noncustododial wallet, you only have the control. It is still much better option to others in term of freedom and control.

What would a person who went 100% on Bitcoin do right now in Kazakhstan, when they can't even convert it to fiat? And banks have stopped working there too, so only good old paper money change hands there.

I thought about this. Candidly speaking, some would want to convert to fiat but not possible for now. Both if banks are shot down also, even fiat is worst.

you may see temporary 'delays to service' or curfews or however you can word it. but if a government under UN rule were to permanently cut off access to utilities for all citizens. then that country can get into alot of trouble with the UN.

This is still centralized. Why not decentralized internet? In a way there can be nodes that provide proof of work and receive incentives for their contribution by provide service for robust decentralized internet, or something like that makeup. I just think this might not be possible earlier as the world is divided into countries.

[hugeblack]

I do not see any real link between the hashrate and the price, although it could be one of the reasons, but we all know that Bitcoin can change in that proportion without any convincing reason.

Internet outage in Kazakhstan may be a direct cause of the impact on the price, I did not think that there are many places of mining in that country, but what happened made me ask that if the governments decided to know the whereabouts of mining, perhaps cutting the Internet for several hours is enough to know the possibility of Bitcoin mining accurately?

Generally, over time many nodes will start broadcasting transactions across space without the need for internet from the local ISPs.

[franky1]

you may see temporary 'delays to service' or curfews or however you can word it. but if a government under UN rule were to permanently cut off access to utilities for all citizens. then that country can get into alot of trouble with the UN.

This is still centralized. Why not decentralized internet?

you can try taking that argument to ISP's, requesting them to revolt against government telecommunication regulation.. but part of their response is that some ISP operate in multiple countries and thus have multiple different government policies where by a rule in one does not apply in another so their not as centralised as you thought

EG t-mobile, Vodafone, Comcast
a US government can tell these companies to shut off access to its US customers. but this does not affect the UK,african customers.

Why not decentralized internet? In a way there can be nodes that provide proof of work and receive incentives for their contribution by provide service for robust decentralized internet, or something like that makeup. I just think this might not be possible earlier as the world is divided into countries.

even if doing so. by offering a service to customers for communication utility you then become a communication business which then puts you right back into the jurisdiction of communication regulations of the government the service is offered.

facebook is very much now under the thump of communication law. which is why they keep getting fined for not moderating illegal communications

[so98nn]

I see this as an opportunity to buy more bitcoin or even other crypto currencies which has blown off for now. The thing is nothing is permanent in the crypto. Such kind of failures, drops, shuts has happened many times in the past and they have somehow affected the bitcoin prices. This may not be effect of hash rate drop but it’s just after effect of the news. In other words many millionaires see it as an opportunity to buy more crypto. They know it for real that crypto will restructure its base no matter what. Moreover, there is possibility that currently peeps will buy more this gaining huge liquidity in the market and pumping the price even higher.

[Leviathan.007]

This could be awsome if someone from Kazahstan come here and explain to us the current situation I heard that the Kazahstan government did shutdown the internet connection because of the bitcoin miners and some others are saying that's because of the gas price but the most important thing about this case is Kazahstan case is not really related to bitcoin price because as far as I know this can't affect the price like that much but I think us federal reserve is the main reason for the recent price dump.

[franky1]

This could be awsome if someone from Kazahstan come here and explain to us the current situation I heard that the Kazahstan government did shutdown the internet connection because of the bitcoin miners and some others are saying that's because of the gas price but the most important thing about this case is Kazahstan case is not really related to bitcoin price because as far as I know this can't affect the price like that much but I think us federal reserve is the main reason for the recent price dump.

the riots were caused by a strain on the FIAT economy due to car fuel prices doubling overnight..
the riots were organised by hundreds of people communicating over the internet to assemble in different places
the internet was switched off to cut-off communications between rioters

separately as an after affect(not cause/reason for the internet cut-off) the internet shutdown meant kazakh asic miners could not submit their hashwork to pools.

as for the price.
depending on country.. mining cost fits into a window of between $31k-$66k
the price can move between these numbers volatility depending on many emotional human decisions and effects.

the price dip is not due to a infrastructure impact of mining (affecting the window range) its just human speculation/media drama causing human emotional decision changes

[jossiel]

Connection to the price drop? Maybe yes and no.

I'm more curious why there's a need to touch the internet if the rally is all about the gas prices. But if the connection to the price drop of bitcoin is due to the hash rate, then eventually, as usual, it will recover.

I didn't even know that there's riot and protests that happened there and if I haven't seen this thread, I'm total ignorant of the current political issue there.

[NeuroticFish]

Imho the hash rate drop after Kazakhstan internet cut-off is much smaller than expected.
Maybe the traders expected something much bigger (because then the rest of the miners would get much cheaper coins), maybe there's something deeper we are missing.

On the other hand, the fear index was already looking bad and some were probably on the verge of selling. I am almost sure that the Kazakhstan news and the price drop have convinced some more sell.
Is it a bear trap? Are we really in trouble? I don't know. But I expect the current price change not be a good indicator because the liquidity on the markets is low.

[stompix]

I really wonder where did he get that data.
Yesterday I posted this:

Price is still floating around ~46k, the difficulty is projected to go up by barely 0.6%

Latest Block:   717321  (11 minutes ago)
Current Pace:   100.6216%  (1642 / 1631.86 expected, 10.14 ahead)
Next Difficulty Change:   between +0.6378% and +0.6607%

The current stats show:

Latest Block:   717417  (2 minutes ago)
Current Pace:   100.4886%  (1738 / 1729.55 expected, 8.45 ahead)
Next Difficulty Change:   between +0.5154% and +0.5254%

In 96 blocks we lost 2 blocks compared to the previous pace so that's barely 2% , not 20%.

24 hours statics show 138 blocks and  10 minutes and ~30 seconds block time, nowhere near something like   20%.

[DapanasFruit]

Aside from the announcement on the possible interest rate hikes in the USA, the situation in Kazakhstan right now is a major factor why we are seeing downward movements with Bitcoin. And these are just natural reactions by the market as buoyed by things that are or will be happening soon. Just like many years ago when news coming from China affected Bitcoin, this time around the focus shifted to USA and Kazakhstan as these two counties are now taking the lead in Bitcoin mining. Hope these things will go away soon so we can go back to normal days.

[Ultegra134]

Connection to the price drop? Maybe yes and no.

I'm more curious why there's a need to touch the internet if the rally is all about the gas prices. But if the connection to the price drop of bitcoin is due to the hash rate, then eventually, as usual, it will recover.

I didn't even know that there's riot and protests that happened there and if I haven't seen this thread, I'm total ignorant of the current political issue there.

It's certainly frustrating, since there isn't a direct answer regarding what caused such drop. Is it concerning? Yes, is it worrying me? No, well, not yet. Waking up to such a drop is definitely scaring, I'm aiming for long-term returns, thus, I am not too worried yet.

Despite not being too affected by the situation, I'm hoping that the market recovers in the following weeks