Kazakhstan cripping the bitcoin network

[rdbase]

There was some thing on BBC news recently about Kazakhstan and their involvement in the bitcoin currency mining boom going on just behind the US since China has banned it.
There was a recent investor who claims to have spend $50k to start one up in just 5 days.
But now the government have started to seen this and has used 8% more of electricity used for the country so has tried to stop it.
With shutting down the internet for some days this month has shown a slow down in the network and thus the dip in price.
This is not a good sign to have the total hashpower centralized like this.

https://www.wired.com/story/kazakhstan-cryptocurrency-mining-unrest-energy

Have your say.

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[coolcoinz]

With shutting down the internet for some days this month has shown a slow down in the network and thus the dip in price.

Do you see any recent drops? I sure don't. As a matter of fact hash rate is at all time high.
Please explain how (even if the news is true) Kazakhstan cutting power to some small miner (because 50k USD bitcoin mine is small) has caused the price to drop.
How would that play out technically, enlighten me.

From the article:

Kazakh miners—especially those previously based in China—will need to buy different types of energy transformers in order to be able to operate in the US, and waiting times for transformers are now around six to 12 months, Doctor says.

Big deal... My neighbor was building a house and filed all the paperwork. That was a year ago and he's still running an extension cord from one of the neighboring houses to his new house because the company did not have the time to run a cable, and we're in the EU. I assume that in Kazakhstan you need to pass money under the table to get expedite things.

[Welsh]

This is not a good sign to have the total hashpower centralized like this.

Its not centralised per say, at least not in the way the BBC is implying it's. Bitcoin isn't really effected by singular nations, that's evidenced by the recent bans by bigger countries than Kazakhstan, and the impact it had. Even, when China turned its attention towards Bitcoin, and disallowed certain things with it, it just meant more, and more Chinese people were interested in Bitcoin.

Remember, that restrictions imposed by governments don't always hurt Bitcoin, and can actually have a positive effect on it. In this case, it just seems like more hostility from the BBC or at least spinning a story in an attempt to influence people's opinion on it.

The only argument that might be considered seriously in terms of centralisation, and Bitcoin would be stating that the pools have a large share of the network hashrate, which is partially true. Though, I think that's a conversation left for another day.

[rdbase]

Please explain how (even if the news is true) Kazakhstan cutting power to some small miner (because 50k USD bitcoin mine is small) has caused the price to drop.
How would that play out technically, enlighten me.

From the article:

Kazakh miners—especially those previously based in China—will need to buy different types of energy transformers in order to be able to operate in the US, and waiting times for transformers are now around six to 12 months, Doctor says.

Big deal... My neighbor was building a house and filed all the paperwork. That was a year ago and he's still running an extension cord from one of the neighboring houses to his new house because the company did not have the time to run a cable, and we're in the EU. I assume that in Kazakhstan you need to pass money under the table to get expedite things.

This is pertaining to many facilities and not just one small miner as you put it.
View the video from which I am referring to the facility which cost them a mere $50k USD but would cost much more in the states for the exact same amount of kilowatts to produce in hashpower. Thus is why China mining companies have moved more of it's mining equipment there than to the US. The cost of electricity is alot less.
https://www.youtube.com/watch?v=jFFk18qms0A

This is not a good sign to have the total hashpower centralized like this.

Its not centralised per say, at least not in the way the BBC is implying it's. Bitcoin isn't really effected by singular nations, that's evidenced by the recent bans by bigger countries than Kazakhstan, and the impact it had. Even, when China turned its attention towards Bitcoin, and disallowed certain things with it, it just meant more, and more Chinese people were interested in Bitcoin.

Remember, that restrictions imposed by governments don't always hurt Bitcoin, and can actually have a positive effect on it. In this case, it just seems like more hostility from the BBC or at least spinning a story in an attempt to influence people's opinion on it.

The only argument that might be considered seriously in terms of centralisation, and Bitcoin would be stating that the pools have a large share of the network hashrate, which is partially true. Though, I think that's a conversation left for another day.

True.
The pools hashrate determines how much of the network usage could first be considered as centralized. But everyone knows China had a significant amount contributed to it before the ban. So where did they move it all too? Texas/Ekibastuz, they both have contracts with miners from China.
BBC news article released a few days prior to the one referred to for this discussion of the matter.
https://www.bbc.co.uk/programmes/p0bkh6bq

[pooya87]

This is not a good sign to have the total hashpower centralized like this.

If it were really centralized then yeah it would have been a bad sign but bitcoin hashrate hasn't been centralized ever. This is just the same 9 year old FUD but the word "China" is being replaced by the word "Kazakhstan". Funny thing is that mining is still ongoing in China despite what the media says and Chinese miners who migrated went to many different locations not just Kazakhstan or even US despite what the media keeps telling us.

[romero121]

In Kazakhstan the electricity usage have increased drastically. This is the prime reason why government have taken measures cutting the internet and shutting down the power. The energy consumption according to the data shows there is big difference from the mining industry. This means only a small percentage of people have done it in a legal manner with all paper works done.

When calculating the supply, it goes beyond the value. So, more number of illegal mining seems to happen around and this will affect the government revenue through taxation. What is being taken seems to be the step to regulate mining industry.

[hugeblack]

After completing the centralization of Bitcoin mining in China, China banning mining and the hashrate still high, arguing with the rest of the countries will be useless.
We can't compare the number of miners in that country to China, so the fact that Bitcoin is centralized in one country is inaccurate.
Bitcoin mining is distributed in a decentralized manner, and therefore we need to take decisions from those countries together to affect the mining directly, and then the miners will move to another country and so on.
Do not forget that Bitcoin mining is an economic behavior, as long as it is profitable in a country, the miners will move to it.

[Welsh]

The BBC have churned out numerous articles about Bitcoin, and basically implying speculation as facts. I've actually come to dislike the way the BBC push agenda's on its readers through subtle wording, something which they can claim is down to interpretation.

Quite frankly, I've grown sick of their way of reporting, even though I once considered it to be better than most other news sources. This isn't just because of the issues with reporting on Bitcoin though, many times they've been trying to push a certain political agenda.

In Kazakhstan the electricity usage have increased drastically. This is the prime reason why government have taken measures cutting the internet and shutting down the power. The energy consumption according to the data shows there is big difference from the mining industry. This means only a small percentage of people have done it in a legal manner with all paper works done.

When calculating the supply, it goes beyond the value. So, more number of illegal mining seems to happen around and this will affect the government revenue through taxation. What is being taken seems to be the step to regulate mining industry.

Quite a drastic thing to do , cutting the power off, right? The thing is, and I partially touched upon this above; the more the governments try to limit the people, the more the people will find ways around their restrictions, that in turn causes civil unrest, because the people think they're being suppressed., which they're right.

There's no legitimate reason to make Bitcoin or Bitcoin mining illegal. Many countries, and companies are now going down the route of claiming Bitcoin is energy inefficient, while ignoring all the other industries which are producing masses amount of energy, just because it suits them to have these sort of industries. Bitcoin provides freedom, and therefore the countries which are a little more dictator like, are the ones looking to make it illegal.

[Dunamisx]

There was some thing on BBC news recently about Kazakhstan and their involvement in the bitcoin currency mining boom going on just behind the US since China has banned it.
There was a recent investor who claims to have spend $50k to start one up in just 5 days.
But now the government have started to seen this and has used 8% more of electricity used for the country so has tried to stop it.
With shutting down the internet for some days this month has shown a slow down in the network and thus the dip in price.
This is not a good sign to have the total hashpower centralized like this.

https://www.wired.com/story/kazakhstan-cryptocurrency-mining-unrest-energy

Have your say.

Actually we could give it a closer look on the current state of the country's economy and insufficient ability to increasing energy supply while the crypto mining firms also complained on overall cost on their Bitcoin mining. I think the bitcoin mining firms at a star up stage need financial activities from other crypto mining firms whose major challenge is not on financial ability. I have a link to my previous post of a related topic on this forum below:

Kazakhstan energy challenges:

Another bitcoin mining facility shutdown in Kazakhstan due to insufficient power supply from the country's electricity recent shortage encountered, the report stated that the entire country had an experience of blackout due to high demands of energy (power) used in mining activities. While stating that the disconnection is slated to last till 31st of January 2022.

Officials in Russia, which had to increase electricity exports for Kazakhstan, have cited similar reasons for the current situation, including insufficient investments in modernizing and upgrading the country’s power infrastructure and generation capacity.
https://news.bitcoin.com/kazakhstan-shuts-down-crypto-mining-farms-till-february/?utm_source=thecryptoapp

Base on the report we had, the bitcoin mining company complains been incapacitated to source for finance due to the cost of it mining activities it incurred.

[kryptqnick]

The Wired story ran on January 12, and at that time mining disruptions due to restricted Internet all over the country, but as coolcoinz pointed out, it's no longer a problem for crypto mining. And while mining is somewhat centralized in a sense that it's largely in the hands of big companies and a handful of countries, even one as unexpected disruptions occur as the one in Kazakhstan, it doesn't hurt the hashrate over a long period of time. So mining isn't in danger. As for the price, I don't think its state can be still attributed to mining. It's either something new we're missing or simply the panic hasn't settled yet after what happened in Kazakhstan. But the price will also recover eventually, it always does. And there are various triggers of panic selling, so even if mining were totally decentralized, it wouldn't guarantee stable price.

[rdbase]

Kazakhstan is now really surprised many. I think this is a pretty interesting moment in the history of cryptocurrencies.

What does this have to contribute to the topic?

Also for the post where they mentioned this has been discussed before, yes. During the political unrest and when China mining companies were moving their operations to the country, not to the result of what came after with the government saying it is a strain their electrical system and then cutting off internet access.
Yet if you do read on to the very next post I did, you can view the dates of the videos and when they were published (and when I actually viewed the news story from the BBC news report as mentioned in the OP):

There was some thing on BBC news recently about Kazakhstan and their involvement in the bitcoin currency mining boom going on just behind the US since China has banned it.

https://www.youtube.com/watch?v=jFFk18qms0A

https://www.bbc.co.uk/programmes/p0bkh6bq


 

[goldkingcoiner]

While it is true that Kazachstan is one of the big miner nations, the entire internet shutdown as far as I understand it, is over. The hashrate has recovered and is doing quite well. In fact, I would even go as far as to say that shaky hands did more damage than the internet shutdown for miners in Kazachstan.

Whales just jumped on the opportunity to pour more gasoline in the fire and do a bit more damage so they could buy cheaper coins.

It was just a very successful FUD attempt. Nothing more.

[NeuroticFish]

This is not a good sign to have the total hashpower centralized like this.

I was expecting you know better than this.
The Kazakhstan "internet is down" business was shown plenty of times - with actual data - that it's based on fake news. There was no significant hash rate drop, hence there's not much of concentration of hash power in that country.

Even if that FUD went overly successful, I think (hope?) that traders are not so dumb to be fooled by same FUD twice.

[rdbase]

This is not a good sign to have the total hashpower centralized like this.

I was expecting you know better than this.
The Kazakhstan "internet is down" business was shown plenty of times - with actual data - that it's based on fake news. There was no significant hash rate drop, hence there's not much of concentration of hash power in that country.

Even if that FUD went overly successful, I think (hope?) that traders are not so dumb to be fooled by same FUD twice.

So the Kazakhstan FUD is no different than the China FUD which had been going on for years. China banning bitcoin then the price drops until it didn't.

New country harboring alot of the hashpower, from the majority of Chinese exporting their mining equipment there, same tactics.

[NeuroticFish]

New country harboring alot of the hashpower, from the majority of Chinese exporting their mining equipment there, same tactics.

Is it? When the internet was down, all that lot of hash power... was not missing...

[asus09]

Kazakhstan paralyzed the bitcoin network, maybe they had a good reason why they wanted to disable the bitcoin network, maybe they did all that to take action against unregistered miners, so they disabled bitcoin, but the russian side has stepped in, dealing with internet blackouts in kazakshtan, kazakshtan is a the biggest country for bitcoin miners, they accept crypto well, but the problem is that there are many illegal miners that make the government there angry, even last year they also decided to take action against bitcoin miners who were not registered in their country..

[tbct_mt2]

They have very great electricity price for Bitcoin mining. According to Electricity prices from Globalpetrolprices.com.

How does it change after the latest crisis in that nation? Will it last for too long? If it is only temporary change about price, crisis, etc. the nation will still be one of most favorite ones for Bitcoin Mining.

The Electricity prices for households, June 2021, is 0.041 (kWh, U.S. Dollar)

[Gamerholic]

I think because of the new policy towards bitcoin miners in Kazakhstan and China - we are seeing another redistribution of this area. If a vacuum is formed somewhere, then it will be filled quickly or not very quickly. Just against the background of these news, news from neighboring Russia arrived. Where at the beginning of the week the issue of a complete ban on production and other operations was discussed, by the end of the week the President of Russia made it clear to everyone that there would be no ban, that there was a lot of free electricity (a surplus of its production), which means that production is profitable and will be established already on a grand scale and regulation. By the end of the year (2022), this issue in the Russian Federation will be closed completely and everyone who is connected with the cryptocurrency there breathed a sigh of relief today!

[fiulpro]

Just as people argued how there have been no dip despite such FUD's I do think on the contrary it can be a good thing. It might help people out of their economic crisis. With them giving more opportunities to the people as well. It's very essential for the whole community to have amazing electrical prices.

Kazakhstan, June 2021: The price of electricity is 0.041 U.S. Dollar per kWh for households and 0.055 U.S. Dollar for businesses which includes all components of the electricity bill such as the cost of power, distribution and taxes.

This price is very good as compared to developed countries as well. I do think we will soon be seeing an era where the small countries take over the mining. This could help them financially as well. The redistribution of wealth is very long due.

[Welsh]

Even if that FUD went overly successful, I think (hope?) that traders are not so dumb to be fooled by same FUD twice.

I think you're putting too much confidence in the average investors logic . I'm pretty sure certain investors have been fooled several times about Bitcoin being a bubble, and x country bans Bitcoin, and therefore we're going to see it go down to zero. The thing is most of the news is rehashed crap, and there's generally never any real reason to listen to them, as it's mostly pushing their own agendas.

This price is very good as compared to developed countries as well. I do think we will soon be seeing an era where the small countries take over the mining. This could help them financially as well. The redistribution of wealth is very long due.

I'm not sure about take over, but for a few years now it has been common practice to buy warehouses in lesser developed countries, and chuck a bunch of miners in them. Even back in 2013/2014 people were doing this.