​The biggest winner of 2021, Kazakhstan, is coming to a fork in the road

The President of Kazakhstan declared a “state of emergency” throughout the territory. Due to the impact of the increase in LNG prices, since January 2nd, protests have erupted in multiple cities and gradually evolved into large-scale riots.

Originally, because of the influx of a large number of miners, the country’s power shortages have caused the country to seek energy supply solutions, such as negotiating cooperation with Russian state-owned power, such as the construction of nuclear power plants.

Now that riots have broken out, what will happen to it in the future?

Energy shortage is the biggest problem for the development of the crypto market

2021 is the “golden age” of the development of Kazakhstan’s cryptocurrency market. China began to rectify the entire encryption industry, causing its encryption miners to seek overseas development.

Kazakhstan itself is open to cryptocurrency, has cheap electricity resources, and is adjacent to China, making it easy for the world’s largest group of miners to move in.

According to data from the University of Cambridge, Kazakhstan’s mining power accounts for 18.10% of the world’s mining power, ranking second in the world, second only to the United States. According to this development trend, it will be the leader of the industry in the future.

But every place that attracts crypto miners will face a problem-power shortage. Just like when Iran legalized crypto mining, it directly issued a decree banning mining for several months due to power shortages.

Now Kazakhstan is also facing this problem. The total power consumption from January to September 2021 increased to 83 million kilowatts, and it failed to cope. Although it negotiates with the Russian state-owned power company, it hopes to stabilize the power supply.

In addition, the president of the country also proposed the possibility of using nuclear energy to solve the energy shortage problem, and the government also discussed the possibility of building a nuclear power plant. At present, 70% of the State Grid relies on coal power plants, and nuclear power plants “will be able to meet the country’s future electricity demand” and also contribute to the completion of carbon neutrality, but it will take nearly ten years to complete the construction.

Because of energy problems, miners who moved to Kazakhstan are seeking stable power destinations around the world to maintain the energy supply needed for mining.

Entering 2022, if the energy problem can be solved, the development of its encrypted market will be at the forefront of the world, but if it cannot solve the power shortage, it will soon be replaced by its successor, which was originally the second largest mining place.

Energy issues are an indispensable part of the development of the encryption industry.

It took three years from not supporting cryptocurrency to accepting it

In September 2017, China stopped ICO, and crypto exchanges went overseas to develop one after another. In October of the same year, the Central Bank of Kazakhstan submitted a proposal to the government aimed at restricting the development of cryptocurrencies.

The chairman of the central bank believes that people do not take measures to protect their assets when investing in cryptocurrencies. “This is a tool that has no normal issuer, no single centralized organization, and it has no support from any institution or individual. Its value is based solely on speculative operations.”

As a result, there is a proposal to ban all cryptocurrency exchanges and organize residents of the country to convert legal currency into any form of cryptocurrency, as well as to prohibit cryptocurrency mining activities.

In December, some companies in Kazakhstan submitted applications to obtain the legally recognized Blockchain and Cryptocurrency Association, which aims to formulate the rules of the blockchain market and hope to launch cryptocurrencies when the country’s blockchain technology is not yet popular.

​The biggest winner of 2021, Kazakhstan, is coming to a fork in the road

National Emblem of Kazakhstan

The founder and chairman of the association said, “Although there are no companies engaged in the blockchain industry in China, many companies have already seen the influence of this technology.”

In May 2018, it was reported that the cost of 1 kilowatt-hour in northern Kazakhstan was less than 1 cent, and the Ministry of National Economy estimated that there was overcapacity. If the excess electricity is sold to cryptocurrency mining companies, it may bring in billions of dollars. extra income.

In addition, its unique geographical conditions and climate are also particularly suitable for the need for heat dissipation in encrypted mines. This is also an important factor for companies such as BIT mining, Canaan, and KazDigital to choose here.

In May 2020, the Senate passed a bill to legalize Bitcoin and also allow transactions. The corresponding practitioners can also apply for a license for legal compliance.

In July 2021, according to a report from the Kazakhstan Blockchain and Data Center Industry Association, cryptocurrency exchanges registered on the basis of the Astana International Financial Center (AIFC) will be able to cooperate with local banks for pilot projects.

The pilot project will run for one year and aims to enable local crypto companies to legally provide crypto investment services. Investors can open legal accounts in banks registered with AIFC for the purchase and trading of cryptocurrencies.

Therefore, some large crypto mining companies began to come here to discuss cooperation and establish mining operations, such as Bitmain and Canaan.

Some people say that Kazakhstan is the biggest winner in 2021, because it has attracted a large number of miners to settle in, and in one fell swoop become the world’s second largest concentration of computing power, second only to the United States.

In October, a report estimated that cryptocurrency mining will bring Kazakhstan US$1.5 billion in revenue in the next five years. Currently, the annual revenue of encrypted mining is 230 million U.S. dollars.

The government is trying every means to solve the energy problem, including the construction of nuclear power plants, because the prospects are good, it is to meet domestic demand, and it is a cost-effective business. If you accept something, you naturally need to give it a way to develop.

Kazakhstan’s encryption road is going through a fork in the road

When domestic blockchain companies are booming and attract foreign practitioners and companies, supervision needs to be put on the agenda. Of course, when an industry develops to the end, it will eventually be regulated and continue to move forward in a compliant manner.

On November 5, 2021, Kazakhstan passed a new bill that companies engaged in digital asset business will be subject to anti-money laundering regulations.

On November 8, the government plans to include all digital assets handled by local companies into the scope of supervision. The proposed bill is ultimately decided by the president of the country.

In addition, the Ministry of Energy stated that the total amount of electricity consumed by all unregistered and officially registered miners accounted for about 8% of the country’s total power generation. The government plans to restrict unregistered crypto miners, while considering taxation on officially registered miners. It is estimated that underground miners consume twice as much electricity as legal miners.

Although supervision is coming, as of December 31, 2021, Canaan Technology has deployed more than 10,000 mining machines in Kazakhstan. In the future, it will also deploy additional computing power.

In addition to the development of crypto mining, Kazakhstan is also actively promoting the development of central bank digital currency. Its national bank will formulate a final model to introduce digital tenge and present the mid-term results of research and discussion to all stakeholders in July 2022. Of course, the final decision on whether to launch a central bank digital currency will be made in December 2022.

On January 6, 2022, protesters complained of soaring energy costs and rushed into the government, causing the country’s largest telecommunications provider to shut down the country’s Internet access, and the hash rate of many Bitcoin mining pools dropped. The central bank also shut down banking operations in the country. Now the whole territory is in an emergency situation.

Literary scholar Xia Mianzun said, “No matter the hero or hero, they can’t escape the domination of circumstances and the times.”

The same is true for the development of a country. It is governed by circumstances and times, but even if it is currently experiencing chaos, it does not conceal its future light.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/%e2%80%8bthe-biggest-winner-of-2021-kazakhstan-is-coming-to-a-fork-in-the-road/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2022-01-07 09:01
Next 2022-01-07 09:02

Related articles