The global computing power of the bitcoin network has plummeted as the shutdown this week of Kazakhstan’s internet crippled the country’s fast-growing cryptocurrency mining sector in the wake of a bloody insurgency.
Last year, Kazakhstan became the world’s second-largest Bitcoin mining hub following the U.S., according to the Cambridge Centre for Alternative Finance, after China cracked down on crypto-mining activities.
The latest data available in August 2021 shows that Kazakhstan accounts for 18% of the global “hashrate” – crypto-jargon for the amount of computing power used by computers connected to the bitcoin network. Compared with the figure of 8% in April 2021, and just before the Chinese crackdown, the increase is indeed very significant.
On Wednesday, Kazakhstan shut down all internet connections in the monitoring site Netblocks, which spoke of “a nation-scale internet blackout”.
This likely stopped the Kazakhstan-based miners from using the bitcoin network.
Bitcoin and other forms of cryptocurrency are “mined” by high-powered computers, usually in data centers in many nations. These miners compete to solve very complex mathematical equations in an energy-intensive process.
Bitcoin fell below $43,000 on Thursday, testing multi-month lows, as investors craved riskier investments and the U.S. Federal Reserve swayed towards more rigid policy action.