Kazakhstan Protests Lead To Internet Shutdown – Bitcoin Hashrate Down 13%
On Wednesday, Kazakhstan, the second-largest Bitcoin mining country in the world in terms of the hashrate, faced political unrest against the current government, which was triggered by a sharp rise in fuel prices.
As a result, the country’s presiding cabinet resigned. However, in order to control the information flow, the state-owned Kazakhtelecom shut down the nation’s internet, causing network activity to plunge to 2% of daily heights.
The move was a massive blow to Bitcoin mining activity in Kazkahstan. According to data compiled by YCharts.com, the Bitcoin network’s overall hash rate declined 13.4% in the hours after the shutdown from about 205,000 petahash per second (PH/s) to 177,330 PH/s. The country accounts for 18% of the Bitcoin network’s hash activity.
Over the prior weekend, the Kazakh government removed price caps on liquefied petroleum gas used for car fuel to align with market conditions, which doubled the fuel prices overnight, sparking violent protests. However, the political unrest has been long boiling in the country, and the fuel price hike was seen as the tipping point.
At the time of publication, the internet remains inaccessible in Kazakhstan. If extended, the consequences could be severe as internet services aside, the Data Center Industry & Blockchain Association of Kazakhstan expects the country to generate $1.5 billion from legal cryptocurrency mining (and probably another $1.5 billion in illicit) activities over the next five years.
The country’s low energy prices have attracted both domestic and foreign entities to relocate mining operations to Kazakhstan. According to Global Petrol Prices, electricity in Kazakhstan costs on average just $0.055 per kWh for businesses, less than half of the $0.12 per kWh paid by U.S. businesses.
