(Bloomberg) — Kazakhstan cut off companies mining cryptocurrencies from its electricity supply a day before parts of the country were hit by blackouts, the country’s latest clampdown on an industry it once welcomed.
Kazakhstan has blocked companies mining cryptocurrencies from Jan. 24 to Jan. 31, a spokeswoman for state-run grid operator Kegoc said, confirming an earlier story by Informburo.kz. A blackout hit parts of the country on Tuesday.
Kazakhstan’s popularity among Bitcoin miners — the country hosted the world’s second-largest mining industry as of August — has already strained its power infrastructure, prompting the government to place big limits on the energy-intensive industry last year. The central Asian nation started attracting the miners after China itself cracked down on the practice.
Electricity supplies in Uzbekistan and Kazakhstan were being restored Tuesday after a massive blackout hit the entire central Asian region, shutting airports and leaving millions of people without electricity or water in both nations and neighboring Kyrgyzstan. The blackout occurred after a major power line in southern Kazakhstan was disconnected.
Minting the world’s most valuable cryptocurrency requires special computers that work to solve complex encrypted problems, and the biggest operating expense for the business is electricity. Miners — drawn to Kazakhstan by its cheap coal power — made it the second-largest Bitcoin producing country in the world after the U.S. in August, according to data from Cambridge Centre for Alternative Finance.
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