Posted on 01/06/2022 10:02:32 AM PST by dennisw
As previously reported, riots in Kazakhstan have lead to the Government resigning, an airport capture, and perhaps most importantly for bitcoin (BTC-USD), an internet blackout.
In mid 2021, as China was cracking down on bitcoin miners, Kazakhstan was welcoming them - according to Cambridge University, Kazakhstan became the world's third-largest player in the coin mining industry. But with energy-price increases and now an absence of internet service entirely, Coindesk is reporting that hashrates are falling across a number of pools commonly used by Kazakhstani miners.
What comes next in the unfolding story is unclear, but a further escalation in violence has the potential to upset the Uranium (NYSEARCA:URA) (NYSE:CCJ), oil (NYSEARCA:USO) (NYSEARCA:XLE) and even bitcoin market.
(Excerpt) Read more at seekingalpha.com ...
Bitcoin network power slumps as Kazakhstan crackdown hits crypto miners
Reuters Reuters
Thursday January 06, 2022 11:48
Kitco NewsShare this article:
LONDON, Jan 6 (Reuters) - The global computing power of the bitcoin network has dropped sharply as the shutdown this week of Kazakhstan’s internet during a deadly uprising hit the country’s fast-growing cryptocurrency mining industry.
Kazakhstan became last year the world’s second-largest centre for bitcoin mining after the United States, according to the Cambridge Centre for Alternative Finance, after major hub China clamped down on crypto mining activity.
Russia sent paratroopers into Kazakhstan on Thursday to help put down the countrywide uprising after violence spread across the tightly controlled former Soviet state. Police said they had killed dozens of rioters in the main city Almaty, while state television said 13 members of the security forces had died.
The internet was on Wednesday shut down across the country in what monitoring site Netblocks called “a nation-scale internet blackout”.
The move would have likely prevented Kazakhstan-based miners from accessing the bitcoin network.
Bitcoin and other cryptocurrenices are created or “mined” by high-powered computers, usually at data centres in different parts of the world, which compete to solve complex mathematical puzzles in a highly energy-intensive process.
In August last year, the most recent data available, Kazakhstan accounted for 18% of the global “hashrate” - crypto lingo for the amount of computing power being used by computers hooked up to the bitcoin network.
In April, before China’s latest clampdown on bitcoin mining, the figure was just 8%.
The hashrate at major crypto mining pools - groups of miners in different locations that team up to produce bitcoin - including AntPool and F2Pool was on Thursday at 1215 GMT down around 14% from its level late on Tuesday, according to data from mining firm BTC.com. Neither pool immediately responded to a Reuters request for comment,
CRACKDOWN ON CRYPTO MINING
Yet a drop in hashrate isn’t necessarily supportive for the price of bitcoin.
Bitcoin fell below $43,000 on Thursday, testing multi-month lows after investor appetite for riskier assets fell as the U.S. Federal Reserve leant toward more aggressive policy action. read more
The more miners on the network, the greater the amount of computer power is needed to mine new bitcoin. The hashrate falls if miners drop off the network, in theory making it easier for the remaining miners to produce new coin.
Kazakhstan’s crypto mining farms are mostly powered by ageing coal plants which themselves - along with coal mines and whole towns built around them - are a headache for authorities as they seek to decarbonise the economy.
The Kazakh government said last year it planned to crack down first on unregistered “grey” miners who it estimates might be consuming twice as much power as the “white” or officially registered ones.
Its energy ministry said last year “grey” mining may be consuming up to 1.2 GWt of power, which together with “white” miners’ 600 MWt comes up to about 8% of Kazakhstan’s total generation capacity. read more
What twitter is saying about the Kazakhstan bitcoin connection. It seems that since the Kazakhstan internet is out. The bitcoin hashing from there is absent to prop up the world bitcoin price. That Kazakhstan does 18% of world’s Bitcoin hashing
.
https://twitter.com/search?q=Kazakhstan%20%20bitcoin&src=typed_query&f=top
"The country (Kazakhstan) is the world’s second-largest miner of bitcoin after the United States. Bitcoin’s “hashrate” – the measure of computing power of machines plugged into its network – dropped by over 10% on Wednesday after Kazakhstan’s internet was shut off, according to crypto mining firm BTC.com."
Mining crypto currencies is as useful as playing video games, it’s just that a large number of 3rd party individuals are willing to pay you for that output.
Crypto currencies are ephemeral “assets” with values set by people who don’t understand that there is no lack of virtual currency, when anyone can start up another, such as “Let’s Go Brandon!” currency, in a wink.
Without actually producing widgets to sell, the product being delivered is not even air.
So i call your wink, and raise you two winks .
Second biggest bitcoin miner
Uranium
Russian troops
More to this than meets the eye?
That’s not exactly what “hash rate” means.
Hash rate is the process of “confirming” transactions to the block chain.
It takes significant processing power. Just being connected, or being a node, is very low bandwidth.
A lot of miners from China moved their operations to K. China banned Bitcoin transactions as of 12/31.
“Crypto currencies are ephemeral “assets”
Your statement above is correct. But is also applies to government issued fiat currency which is vastly inferior in almost every respect to the major crypto currencies.
I understand where you are coming from but your thinking is dated. All that matters is what the crowd values, not what you think is valuable.
I also own physical silver. Which might have value, but which has not been well valued for decades (and also suffers from massive price manipulation by banks and others).
Mining crypto is making me lots of ‘currency’, some of which I have been converting into assets like property. Which by the way is also an ephemeral asset class in the US because the government can and does take it at will.
I find it hard to believe that crypto currencies have anything over a government’s currency, when that government has both an army, and the wealth of all assets across all of its land, to back it.
Kind of funny, where I sit. But the fed will use this as an excuse to try to ban crypto. And sycophants in Congress will echo it.
Watch.
Crypto is the best thing to happen against the Fed. So they have to shut it down. Can’t do the one world (band cash money) thing with crypto out there.
But there is only one original cryptocurrency.
There can only ever be 21-million bitcoins, and 19 million have already been mined.
There can be an infinite number of US dollars, and soon will be.
See the difference?
There are an infinite number of crypto currencies that can be created.
I see no difference, do you?
There is only one original cryptocurrency.
You just hang onto those US dollars stuffed into your mattress.
Someday soon you will be able to buy a loaf of bread with them.
“There are an infinite number of crypto currencies that can be created.”
And the vast vast majority of them will never be valued by the crowd and therefor your concern is not valid.
My Bitcoin will not be inflated away. It is also completely outside the control and abuse of any government. These attributes make it very attractive to 100’s of millions of people all across the globe. That collective attractiveness makes it an excellent fiat currency.
There are still risks with bitcoin. But for now I’ll most certainly take it over the dollar.
Most people do not understand crypto mining. My son is a former successful crypto miner.
If mining is slowed down, that means fewer coins - and should mean, if the market understood, they are more valuable, not less.
And still, the crypto market is still manipulated and controlled - as much as crypto people say its advantage is that it cannot be.
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