Kazakhstan is emerging as a major player in crypto mining

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Data from the University of Cambridge shows that Kazakhstan’s share in the global crypto hash rate is increasing. This is also the case for the United States.

Interestingly, the data provided only dates back to April. This was around the time when Chinese authorities were increasingly vocal in cracking down on the cryptocurrency industry.

Based on the many previous repressions in the past, many have dismissed this as a non-problem. But since then, China’s anti-crypto mandates have accelerated. Some reports even speak of power cuts in premises hosting mining operations.

Source: cbeci.org

Now that it is clear that China intends to continue on this path, the great mining exodus is well under way. And based on that snapshot from three months ago, it looks like Kazakhstan intends to take China’s place.

The conditions are right for Kazakhstan to become a crypto mining hub

The Republic of Kazakhstan is located in Central Asia and shares borders with Russia and China. 60% of its GDP comes from oil and gas. Physical mining is also an important generator of income, as Kazakhstan contains vast deposits of uranium, precious metals, metals, ores, alloys, ferroalloys and minerals.

The government of Kazakhstan has taken an overall friendly approach to crypto. But there is little regulatory clarity on the issue.

In March 2018, President of the National Bank of Kazakhstan Daniyar Akishev said his agency was taking a “very conservative approach” to crypto. Akishev sought to ban trading in and out of the local tenge currency, and he also intended to ban crypto mining.

“In Kazakhstan, the National Bank takes a very conservative approach in this area and accepts only extremely strict restrictions. Therefore, we want to ban the exchange of digital currencies for national currency. We want to ban stock market activities in this area, as well as any type of mining.

However, just two months later, President Nursultan Nazarbayev said international cooperation regarding the regulation of crypto was needed. This neutral message left observers wondering if the government’s stance was still firmly against crypto.

But it wasn’t until April 2019 that a clearer picture emerged, as new legislation determined that crypto mining would not be subject to tax. This was later backed up by a bill approved by the Senate of Kazakhstan that legalized crypto mining.

On top of that, Kazakhstan enjoys the lowest electricity costs in the world. On average, businesses pay $ 0.052 per kilowatt hour. Whereas American companies pay $ 0.108 per kilowatt hour and Chinese companies pay $ 0.103 per kilowatt hour.

This will prove a trillion dollar mistake for China

Speaking to Bloomberg, MicroStrategy CEO Michael Saylor criticized China’s current stance against the crypto industry. He commented that the outflow of capital and mines from China is an important factor contributing to the price uncertainty observed in recent times.

Reviewing the numbers, Saylor said China owns a 50% share of Bitcoin and generates $ 10 billion annually. Add to that a 100% year-over-year growth rate, and Saylor thinks that will prove a trillion dollar mistake on their part.

“The government cracked down on this and kicked the whole industry out of China. I think, given the growth rate of Bitcoin, this will turn out to be a trillion dollar mistake for China. “

Some speculate that China’s motivations lie in promoting its digital yuan over Bitcoin and other cryptocurrencies. Whether this is true or not, Kazakhstan has no problem intervening.

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