Kazakhstan to limit miners to 100MW as power shortages bite

Kazakhstan to limit miners to 100MW as power shortages bite

Kazakhstan is seeking to limit the power usage by block reward miners as electricity shortages continue to bite in most major cities. The country has proposed a 100MW total cap in power usage for the industry even as most miners claim that this would hardly serve their needs.

Kazakhstan has become home to one of the biggest block reward mining industries in the world. Following the crackdown on the industry by China, many miners relocated to the country and set up operations there. According to the Cambridge Centre for Alternative Finance, Kazakhstan is now the second-largest home to block reward miners after the new leader, the United States.

This surge in block reward mining hasn’t gone down well with authorities, with many officials blaming the miners for power outages. In the past few weeks, Kazakhstan has experienced outages that have left even the capital Nur-Sultan in the dark for hours and led to rationing, according to reports. 

Now, the government is proposing an energy use cap for the industry. The Energy Ministry has put forward a proposal to limit energy use of any mining farm to 1MW and 100MW collectively for the industry. This limit will stand for the next two years and kicks in 60 days after the proposal is published.

Block reward miners are already opposed to the new proposal, stating that the electricity cap is hardly enough to keep their mining rigs running. 

However, despite the protests, the Energy Ministry is adamant that the measures are in the best interests of the Kazakh public. Minister Magzum Mirzagaliyev revealed that energy consumption has increased this year by 7%, up from the usual 2% annual increase. He credited this to the rise in block reward mining centers. 

Speaking in an event earlier this month, he said that the national electricity provider KEGOC has “the right to limit or reduce consumption volumes, primarily of mining data centers at a time when there may be a shortage of electricity.”

The energy minister further criticized the sector for consuming large amounts of electricity at the expense of other local industries, and yet Kazakhstan doesn’t fully get the benefits. He said that while the country mines digital currencies, the profits are remitted abroad to the countries where the miners are registered.

Watch: CoinGeek New York panel, How to Achieve Green Bitcoin: Energy Consumption & Environmental Sustainability

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.

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