Kazakhstan proposes power price hikes and taxes targeting crypto miners

[_act_]

After the bitcoin mining ban in China, many miners moved to Kazakhstan and mining in USA increased also, USA beome the country with the highest bitcoin mining hashrates, Kazakhstan following USA become the second country with the second highest mining hashrates. The Kazakh government has proposed taxes that can discouraged mining in Kazakhstan

On Feb. 4, Kazakhstan’s First Vice Minister of Finance, Marat Sultangaziyev, proposed a price increase from $0.0023 per Kwh to $0.01 (around a 335% increase) specifically for crypto miners.

He also proposed a tax on each individual graphics card (GPU) and each piece of equipment needed for crypto mining. He likened the tax-per-video card to the way casinos are taxed for each table they run, whether or not the table is active.

The third part of his proposal was to remove mining hardware from an exemption on value-added tax (VAT).

What can this caused to miners in Kazakhstan, it is like some miners will have no option but to shutdown if this crypto mining taxes become effective. It is possible some miners will be able to still make profit because they are established miners already but what about new miners, this can cause new miners not to be able to make any profit and shutdown, therefore discouraging people to join crypto mining business in the country.

[Obito]

Just because there's price hike that targets them doesn't mean that shutting down is the only answer for them, if you don't want to pay for the electrical bills for your farm then you can just go with the alternative which is solar power although it's going to be a bit expensive to install and maintain one but the investment pays off. As for taxes, pretty sure that they might be able to lobby some politicians in Kazakhstan to hopefully help with that problem.

[mindrust]

It is not the end of the world. If they raise the energy costs, miners should raise the bitcoin prices. Problem solved. Supply and demand motherfucker.

Energy prices climbing everywhere in the world. Kazakhstan is not an exception. Last time I checked a barrel of oil was going for $90+ which means we are going to experience high inflation for a long time if it stays that way.

[slaman29]

So it seems they're not going to learn lessons from China. First you ask people to come and use your power, offer them cheap rates etc Then you ask them to pay more just because your industry is making more money?

If the tax laws already ask for more contributions from higher income bracket why should they need to target crypto?

Another Russian "invasion"?

[Bagong91]

It is possible some miners will be able to still make profit because they are established miners already but what about new miners, this can cause new miners not to be able to make any profit and shutdown, therefore discouraging people to join crypto mining business in the country.

Raising high tax costs, it seems that this is just a trick of politicians for the benefit of several parties who have long started mining activities.
It's possible this is a way to kill miners who are just starting out and want to get started.

[DapanasFruit]

The government of Kazakhstan wants some share of the action so they are raising the tax and imposing higher rate for power for the booming Bitcoin mining industry. And soon if the heat can becomes unbearable, of course, miners will start to be thinking of other alternatives where they can do business in a much better environment. Doing business in a place is not anymore supportive of the industry you are in can be so hard and they better come to USA or maybe even look at opportunities in El Salvador which I guess is the most friendly country for Bitcoin.

[asus09]

The government of Kazakhstan wants some share of the action so they are raising the tax and imposing higher rate for power for the booming Bitcoin mining industry. And soon if the heat can becomes unbearable, of course, miners will start to be thinking of other alternatives where they can do business in a much better environment. Doing business in a place is not anymore supportive of the industry you are in can be so hard and they better come to USA or maybe even look at opportunities in El Salvador which I guess is the most friendly country for Bitcoin.

Kazakhstan's proposal to raise taxes for bitcoin miners, would be an emotional issue, although Kazakhstan did not ban bitcoin as China did last year, it is likely that Kazakhstan's actions would certainly make it difficult for miners, had this proposal been accepted. and it's confirmed that the miners will most likely look elsewhere for cheaper electricity, but I don't think this proposal will come true.

[Rikafip]

Just because there's price hike that targets them doesn't mean that shutting down is the only answer for them, if you don't want to pay for the electrical bills for your farm then you can just go with the alternative which is solar power although it's going to be a bit expensive to install and maintain one but the investment pays off.

Heh, you presented it's like a piece of cake to just switch to solar power, its much easier said that done. Switching to solar requires huge investment, at least the one needed to power big mining farms. Add on that not so solar-friendly climate that Kazakhstan has (AFAIK).  And yeah, when mining becomes more expensive that BTC they mined is worth, they do shut their rigs.

It is not the end of the world. If they raise the energy costs, miners should raise the bitcoin prices. Problem solved. Supply and demand motherfucker.

Or miners move their farms someplace else, with cheaper electricity.

[pooya87]

USA beome the country with the highest bitcoin mining hashrates, Kazakhstan following USA become the second country with the second highest mining hashrates.

Actually all of the stats you have seen so far on the internet about which country has how much hashrate has been completely wrong. The fact is that we don't really know how much hashrate is in each country simply because neither miners nor the mining pools release their location or their users' location.

The Kazakh government has proposed taxes that can discouraged mining in Kazakhstan

They won't. If they wanted to "discourage mining" they would have banned it. They just want to get their share of the pie. They don't want to destroy the pie altogether.

it is like some miners will have no option but to shutdown

Their loss is "our" gain

[dothebeats]

Kazakhstan doesn't have a shortage on power as far as I can remember, so this increase in rates and taxes is absurd, and is another way of telling miners to pack their bags and go somewhere else. This proposition may be an influence of external power, but I'm not so certain because Kazakhstan tried to remain neutral for so long for its own economic advantage.

Countries imposing sudden increase in power rates for crypto miners is directly refusing to take money from an industry trying to be legitimate and clean as possible. It's been like this for years, and I think miners from China that relocated to Kazakhstan may need to seek refuge somewhere else.

[franky1]

On Feb. 4, Kazakhstan’s First Vice Minister of Finance, Marat Sultangaziyev, proposed a price increase from $0.0023 per Kwh to $0.01 (around a 335% increase.

still cheaper to mine in kazahkstan than it is to mine in america
american industrial asic farms pay $0.07
american residential home miners pay $0.12-14

oh and kazahkstan people. (the customers) dont and never have paid $0.0023.

                            industrial   residential
Kazakhstan Tenge   18.090   24.050
U.S. Dollar                0.042   0.055

by the way
the conversion rate of 1 tenge to USD is  1tenge = 0.0023usd

funny part is
cointelegraph pulled the (0.0023-0.01) number out of their ass. without understanding what it refers to
the actual article they linked to the proposed change never mentions the numbers 0.0023-0.01

the actual article say the pre wholesale cost to power plants has a 1tenge tax inside of the 18-24 tenge retail/wholesale price
this will increase to 5tenge

[hatshepsut93]

It is not the end of the world. If they raise the energy costs, miners should raise the bitcoin prices. Problem solved. Supply and demand motherfucker.

Miners don't decide Bitcoin's price. In fact they depend on Bitcoin's price being high.

Kazakhstan doesn't have a shortage on power as far as I can remember, so this increase in rates and taxes is absurd, and is another way of telling miners to pack their bags and go somewhere else.

They had problems with their electric grid due to miners in the past. So it's pretty logical to charge more for electricity and retain the profits while selling less electricity.

[NeuroticFish]

Countries imposing sudden increase in power rates for crypto miners is directly refusing to take money from an industry trying to be legitimate and clean as possible. It's been like this for years, and I think miners from China that relocated to Kazakhstan may need to seek refuge somewhere else.

Countries like Kazakhstan have low prices for electricity simply because it's obtained from burning the oil/gas they extract and the prices are dictated (arbitrarily) by the government, not the international prices (and basically free market). The price is low for boosting the local economy.

So if they convince the miners leave, the country may have a good chance to actually earn more on long term, by selling those resources to other countries more expensive than they would sell the electricity to the miners.

I don't agree with Kazakhstan policy, but I can understand its logic (if this was it).
And the miners.. well, as long as they are focused on getting the cheapest electricity no matter how it's obtained and how doubtful is the regime of the county they conduct their business in... maybe, just maybe, they deserve this. And as said, the new price is not that big either.

[coupable]

What can this caused to miners in Kazakhstan, it is like some miners will have no option but to shutdown if this crypto mining taxes become effective. It is possible some miners will be able to still make profit because they are established miners already but what about new miners, this can cause new miners not to be able to make any profit and shutdown, therefore discouraging people to join crypto mining business in the country.

Solo miners will have no options but to shut down or to migrate the business outside of Kazakhstan. In meanwhile, i don't think this will infect big/medium companies working on this field. Seems that the worst scenarios with Kazakhstan taxation is better than the situation in other countries.
Back to the last halving event, some companies who lost a great of their portion after the halving, have changed activity and even started mining other altcoins .

[odolvlobo]

It should be noted that taxing miners or raising their costs has no effect on Bitcoin.

It is not the end of the world. If they raise the energy costs, miners should raise the bitcoin prices.

It doesn't work that way. Miners have no control over prices.

[Leviathan.007]

Talking about Kazakhstan I've seen many people are talking about mining issues there in Kazakhstan because the government is worried about the power consumption of the miners and I guess the electricity power price was very much cheap in Kazakhstan so maybe that's the reason for the miners to start mining there and by increasing the numbers of miners we should not be surprising if the government is worry about the power consumption. But still not just about Kazakhstan but I guess many other countries will target the miner for taxes to have an extra income supply the power needed by the miners. 

[Hamphser]

It should be noted that taxing miners or raising their costs has no effect on Bitcoin.

It is not the end of the world. If they raise the energy costs, miners should raise the bitcoin prices.

It doesn't work that way. Miners have no control over prices.

Miners are indeed have nothing to do over prices yet we know that they arent the ones who do actually made out circulation and who do prices their coins on orderbooks.I'd rather believe that

their options whether would really be hiding on some rabbit hole and operates or simply transfer out on other countries which does have low cost of energy but of course into those large-scale miners.

Im not surprised on how they are trying to suppress out on something that they dont like, its always been obvious.

[TimeTeller]

What can this caused to miners in Kazakhstan, it is like some miners will have no option but to shutdown if this crypto mining taxes become effective. It is possible some miners will be able to still make profit because they are established miners already but what about new miners, this can cause new miners not to be able to make any profit and shutdown, therefore discouraging people to join crypto mining business in the country.

Solo miners will have no options but to shut down or to migrate the business outside of Kazakhstan. In meanwhile, i don't think this will infect big/medium companies working on this field. Seems that the worst scenarios with Kazakhstan taxation is better than the situation in other countries.
Back to the last halving event, some companies who lost a great of their portion after the halving, have changed activity and even started mining other altcoins .

This may be another bottleneck for miners in those region but if they can't bear the proposed tax hike, they will for sure shut down their operations.
However, they can optimize their profits while the bill is not yet approved. And also, look for alternatives once their government enforced this bill.
Kazakhstan needs these miners to improve their economy, so they need the income coming from this industry.
Otherwise, their big miners will just move to neighboring countries that are more friendly to crypto miners, which will be a loss to their income.

[Emitdama]

What can this caused to miners in Kazakhstan, it is like some miners will have no option but to shutdown if this crypto mining taxes become effective. It is possible some miners will be able to still make profit because they are established miners already but what about new miners, this can cause new miners not to be able to make any profit and shutdown, therefore discouraging people to join crypto mining business in the country.

I think the ones that would be mostly affected are the new miners in the market. But the ones who are well established and are already making a huge profit from mining cryptocurrency wouldn’t really be that much affected, although it is also going to affect them a little. And if they should see a better location to move to than Kazakhstan, I believe that majority of them would start moving to that other country where things would be better for them and they wouldn’t have to be paying too much of taxes which would consume the level of profit that they are making in a month from mining cryptocurrency.

[tbct_mt2]

Such things are temporay. China temporarily crack down Bitcoin mining because in the nation, there is energy crisis and government have to prioritize their whole nation first.

However, have you read the unofficial report, leak on Democratic People's Republic of Korea (DPRK) and their shady activities to attack crypto exchanges, hacks, compromises etc. in order to steal crypto currency for their nuclear power and weapon program.

Kazakhstan and other nations will make Bitcoin legal tender, sooner or later and not only allow Bitcoin mining.