The world’s second largest mining holy land has been disconnected from the Internet

The protests of the people in Kazakhstan cut off the money for the miners.

Recently, large-scale riots broke out in Kazakhstan. On January 5, the country’s largest telecom provider, Kazakhtelecom, shut down the country’s Internet access. The computing power of many Bitcoin mining pools dropped sharply. The global computing power of Bitcoin dropped by 12%. Among them, Antpool dropped by 11.6%. , F2Pool fell 12.8%.

The day before (January 4th), Canaan Technology just announced that it has reached an agreement with a number of encrypted mining companies to carry out joint mining business in Kazakhstan. As of December 31, 2021, Canaan Technology has There are already 10,000 Avalon mining rigs up and running in the country.

Affected by the riots, U.S. blockchain concept stocks fell sharply for two consecutive days. Bit Mining fell by nearly 10% on January 5. As of the close of January 6, Canaan Technology has fallen by nearly 10%, and the ninth city has accumulated fell 7.7%. According to public reports, miners such as Canaan Technology, Ninth City, and Bit Mining have deployed a large number of mining machines in Kazakhstan.

In this regard, Bit Mining related personnel said on January 7 that Kazakhstan’s business is not the main business of Bit Mining, and the mid-to-high-end machines of mining machines are all deployed in North America. It is unlikely that the machine will be withdrawn from Kazakhstan to North America, and further actions will be disclosed. 

Tens of thousands of mining machines deployed in Kazakhstan

On January 4, 2022, Canaan Technology announced that as of December 31, 2021, Canaan Technology had 10,000 Avalon mining machines running online in Kazakhstan, and continued to deploy additional computing power as planned.

According to surging news reports, Canaan Technology has cooperated with mining farms in Kazakhstan since 2019. Canaan Technology has also opened up a dedicated trunk line logistics channel from China to Kazakhstan, and provides customers with one-stop customs clearance services.

In June 2021, Canaan Technology released its financial report for the first quarter of 2021, showing that its revenue from overseas markets accounted for 78.4% in the first quarter, compared with only 4.9% in the same period in 2020.

On June 8, 2021, Canaan Technology announced that it has established the first overseas after-sales service center in Kazakhstan to provide customers with long-term and timely after-sales service including mining machine inspection, maintenance, technical consultation, etc.

Zhang Nangeng, chairman and CEO of Canaan Technology, said that the company has previously set up a main body in Singapore to operate a specific mining business, and the company’s personnel are preparing for the self-operated mining business in Kazakhstan.

On June 23, Canaan Technology announced that it has officially started its self-operated mining business in Kazakhstan, and the first batch of mining machines have been put into operation.

The Ninth City is not far behind. According to its announcement in August 2021, it has signed cooperation agreements with two local enterprises in Kazakhstan to establish a joint venture company in which the Ninth City has the main control, and establish a digital currency mine in the local area. The miners or The Ninetowns that deploy The Ninth City and its partners have deployment priority. According to the announced plan, the cooperative mining farm will be fully completed by the end of 2022, with a total capacity of 300MW, and 175MW by the end of 2021, and about 50,000 ant mining machines can be deployed with a computing power of 5EH/s.

Bit Mining announced in July 2021 that it has purchased 2,500 new bitcoin mining machines and plans to ship them to Kazakhstan for deployment. Previously, 3,819 bitcoin mining machines have been deployed in the Kazakhstan data center, and 4,030 bitcoin mining machines have been deployed. The machine has been shipped to the Kazakhstan data center for deployment.

According to Global magazine, miners such as Bitmain, Microbit, and Microbit also have cooperative relations with mining farms in Kazakhstan.

In March 2021, China’s Inner Mongolia Autonomous Region issued the “Several Guarantee Measures for Ensuring the Completion of the “14th Five-Year Plan” Energy Consumption Dual Control Objectives (Draft for Comment)”, proposing that new virtual currency mining projects are strictly prohibited, and virtual currency mining should be cleaned up and shut down in an all-round way. mine project. Since then, various parts of China have begun to rectify virtual currency mining activities. Since then, the major mines of major miners have been moved overseas.

The future of mining resorts is in doubt

Located in Central Asia, Kazakhstan is in a low temperature climate all the year round, rich in natural resources, and the electricity price is about 0.2 yuan per kilowatt-hour or even lower. The government actively promotes the legalization of cryptocurrency mining in the country. Therefore, Kazakhstan has become a domestic mining industry. A destination for businessmen to go out to sea.

Considerable economic income is an important reason for the Kazakhstan government to support mining. According to Xinhuanet, in the next five years, cryptocurrency mining is expected to bring Kazakhstan more than 1.5 billion US dollars in economic income and 300 million US dollars in taxes, such as Including “grey” mines, the number can be doubled again. As one Kazakh official put it, “This is a very big industry and Kazakhstan cannot get around it”.

2021 is a year of rapid growth in Kazakhstan’s mining industry. According to a comprehensive cryptocurrency research report released by Cambridge University, as of August 2021, Kazakhstan’s global share of Bitcoin mining computing power has increased from 4.57% in the same period last year. That jumped to 18.1%, second only to the US at 35.4%.

However, the fast-growing mining activity poses a big hidden danger for Kazakhstan. In a meeting with the energy minister in November 2021, President Tokayev criticized the sharp decline in his sector’s fuel reserves, emphasizing the need to ensure safety for enterprises. and home with uninterrupted power supply. According to Xinhuanet, some areas in Kazakhstan have experienced power shortages due to factors such as the surge in mining activities.

From October to November 2021, Tokayev expressed his negative attitude towards mining activities many times. He said that although Kazakhstan’s mining capacity has ranked second in the world, he can hardly see any financial returns. Calmly assess the risks and impacts of the industry.

Before that, Tokayev had a friendly attitude towards mining. In June 2021, Tokayev also signed an amendment to the Tax Code on the taxation of cryptocurrency mining. The new law stipulates that mining will be taxed. A “nominal” extra charge of 1 tenge (about 1.5 cents) per kilowatt-hour of electricity.

According to the website of China’s Ministry of Commerce, Kazakhstan has begun to formulate relevant government orders to impose restrictions on power supply for “mining” activities. The Minister of Energy of Kazakhstan said that once there is a serious shortage of electricity, the State Grid Corporation of Kazakhstan will have to cut off the power of legal “mines”.

According to CCTV news reports, the recent public protests have led to a state of emergency throughout Kazakhstan, the country’s Internet has been interrupted, and all financial institutions have been suspended. The President of Kazakhstan has accepted the government’s resignation, and government members will continue to perform their duties until a new government is formed. . The unstable political situation has made the future of miners in Kazakhstan confusing.

According to CCTV news reports, the mobile phone signal of Tan Almaty, the largest city in Kazakhstan, was restored on the afternoon of January 9 after nearly 4 days of interruption, but the mobile network was still unavailable, and it is uncertain how long the signal recovery time will last.

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