Bitcoin mining in Kazakhstan might see a drop!
Kazakhstan is home to one of the world’s largest bitcoin mining operations. It is only second to the United States. Since crypto mining has been prohibited in China, the mining centre for Bitcoin has been dominated by the United States and Kazakhstan. Kazakhstan is one of the world’s largest hubs in terms of the bitcoin mining hash rate, which is defined as the number of times the bitcoin network attempts to perform calculations each and every second. However, Kazakhstan has recently been losing ground in terms of mining statistics, and its reputation as a “Bitcoin Mining Paradise” is fading.
What’s causing Kazakhstan to shutdown bitcoin mining? Let’s find out!
Kazakhstan which was being termed as a paradise for bitcoin miners, is slowing down in the mining process and losing out on miners who are starting to leave the world’s crypto hub. The internet shutdowns, adoption of stringent regulation by government, caused the computing power to go down rapidly, causing bitcoins mining capacity to drop by 13%. Even after the resumption of services, there is a negative wave among the investors, might cause a dent in the growth of the mining hub in Kazakhstan.
Energy fee levied on crypto by government of Kazakhstan.
The government of Kazakhstan, considering the nation as one of the largest mining hub for bitcoin mining, to save energy and to derive income from activities of mining levied a special energy fee on the crypto miners.
In the first Quarter of 2022, the government earned approximately $1.5 million in energy fee from crypto mining. The government also made a remark that, the expected fee from mining activities was not accrued. Since, the fee was not received as expected, the government went ahead and shut down many crypto mining industries to conserve energy.
Tax on crypto mining in Kazakhstan!
In Kazakhstan, there were no taxes levied on the mining of cryptocurrencies until now. But the government certainly feels adding tax would help to conserve the energy and would also allow the government to earn revenue. Kazakhstan’s parliament also passed in the first reading amendments that a national tax code be levied to crypto mining tied to the electricity prices consumed by mining industries.
Writer’s Report.
It is true that, bitcoin mining requires a lot of energy and computing capabilities. As bitcoin mining occurs progressively, the conservation of energy also comes into picture. Conserving the energy for future generation is important. Hence, the government of Kazakhstan plans to add taxes on the crypto mining activities. The move suggests that the government is hoping for a shift in the crypto industry, and the mining companies have a watchful mining process followed.