Crypto Miners Have To Look For New Havens As Kazakhstan Tightens Regulations
Just a couple of years ago, all Bitcoin miners were talking about the possibility of creating a massive mining hub in Kazakhstan that was welcoming miners at the time.
However, the situation changed and the country faced multiple energy-related challenges that were way too hard to overcome. Bitcoin miners put too much pressure on the country’s power infrastructure. Now, the state wants miners out.
Good for Ethereum, bad for Bitcoin
Bitcoin mining is a power-hungry operation that has been banned in China completely due to the strains it was putting on the national energy grid.
The exodus of miners was aimed at multiple directions including Chile, Uruguay, Peru, Kazakhstan, the USA, and Germany. Some miners were also interested in moving their operations to Russia and the Middle East.
Kazakhstan attracted a lot of businessmen from China due to its geographical proximity excess energy and vast empty regions suitable for data centers.
However, some challenges appeared immediately. Rerouting power to energy-hungry farms was a tall task and energy demands were high due to higher costs associated with ventilating, filtering, and cooling the air in facilities.
The Kazakh government decided to stop its loyal politics and impose new regulations to drive out miners. For example, new rules will prohibit miners from buying energy unless there is a surplus in the grid.
All crypto miners will be subjected to additional taxes and more licenses will be required for any miner to operate in the country.
Losing Kazakhstan is a huge blow to the mining community with fewer places to go to mine efficiently. It seems that Ethereum decided to switch to the PoS model just in time to avoid all these issues.
On the other hand, many Bitcoin miners are already operating at a loss and have to sell their coins to cover expenses.
South America is the last hope for Bitcoin
The recent ramblings from the US senate and challenges related to energy in Europe make it impossible for the mining community to plan their endeavors in these regions without any doubts. Now, only South America looks like a good option in the immediate future.