TL;DR Breakdown
- Protests in Kazakhstan led to a nationwide internet shutdown.
- Almost 15% of global Bitcoin miners were offline.
- All major BTC mining pools experienced a significant reduction in their hashrate.
The entire nation of Kazakhstan was offline for almost 24 hours, a country that’s the second biggest hub of Bitcoin mining in the world. The Kazakstan protests broke out earlier this week due to surging fuel prices in the country. Protesters stormed government facilities, leading to severe clashes with the military and security forces.
In the midst of growing allegations of humanitarian violations against the government, a nationwide internet shutdown was announced on January 6th. This outage has caused almost 15% of the global bitcoin mining facilities to go offline. This was a significant blow to Bitcoin supply in the last 24 hours. Evidently, Bitcoin prices dipped below $43,000 yesterday, which was its lowest since September last year.
According to Cambridge University, over 18% of Bitcoin’s average monthly hashrate comes from the mining facilities of Kazakhstan. The only country to mine more Bitcoin’s is the US. All major BTC mining pools such as Antpool, Binance Pool, and F2Pool experienced a significant reduction in their hashrate immediately after the internet shutdown.
Although internet connections have been restored in the country, BTC mining might not strongly recover until the Kazakhstan protest situation is effectively resolved.
Bitcoin miners found a new home in Kazakhstan after China’s crackdown
Just a year ago, China was the largest Bitcoin mining hub in the world, contributing to over 46% of global BTC mining at one point. After the crypto mining ban in China, Bitcoin miners found a new home in the neighboring country of Kazakhstan
However, Bitcoins miners would soon find themselves caught in the middle of civil unrest, which finally boiled into yesterday’s national-wide shutdown. Although yesterday’s internet shutdown disrupted the global BTC mining industry, it also showed that the Bitcoin network is extremely resilient. Even with a large portion of the miners offline, BTC trading and transactions didn’t skip a beat.
There are however strong lessons to be taken from this incident by the crypto mining industry. Bitcoin miners in the future will have to pay caution to political situations and potential regulatory risks before setting up mining facilities in a region.
