Bitcoin miners collateral damage during violent unrest in Kazakhstan

Bitcoin's total hashrate fell up to 12% after Kazakhstan's largest telecom provider pulled the plug on the internet during violent protests.

Kazakhstan president Kassym-Jomart Tokayev ordered a communications blackout on Wednesday, nixing internet across the country and forcing Bitcoin miners offline.

Bitcoin’s total hashrate fell up to 12% after the nation’s largest telecom, Kazakhtelecom, pulled the plug.

Kazakhstan ranked second after the United States in terms of global hashrate in August with more than 18%, according to the Cambridge Bitcoin Electricity Index (CBECI).

Several Bitcoin mining pools, including Ant Pool and Binance Pool, demonstrated a drop in activity, according to MiningPoolStats.

Deadly protests began in cities across Kazakhstan on Sunday in response to rising fuel costs in the oil-rich nation after the government removed a price cap on liquified petroleum gas (LPG).

On Thursday, Russian peacekeeping troops arrived to assist Kazakh government forces. Activists violently clashed with police and reportedly directed arson on government buildings.

Indeed, the most violent post-Soviet civil uprising has seen 12 civilians lose their lives in an attack on the Mayor’s office in Kazakhstan’s de-facto capital, Almaty.

Police reported killing dozens of people (labelled rioters) overnight, according to the BBC.

A comprehensive death toll is currently unknown. On Thursday, BBC noted that state television said 13 security officers lost their lives (two decapitated), and 353 were wounded.

There were 1,000 wounded overall, according to the health ministry.

President Tokayev is now counting on support from the Euroasian, intergovernmental Collective Security Treaty Organization (CSTO) to help combat what he described as terrorist attacks by foreign-trained gangs.

The government u-turned on the petrol price cap removal on Thursday afternoon. However, protests continue as citizens challenge other political issues.

Tokayev has already resigned his administration in a bid to end the violence. Kazakhstan’s national bank has halted all financial activity in the country.

Bitcoin miners fled from China to Kazakhstan

Tokayev’s order to cut communication networks was a likely attempt at preventing anti-government groups from organizing online.

But Bitcoin hashrate coming out of Kazakhstan increased 300% after neighboring China criminalized the practice.

The growth in Kazakhstan’s Bitcoin mining community is likely to be a mixture of migrating companies keen to continue operating legally and newer operations benefitting from access to cheap energy.

Both Beijing-headquartered Canaan and Hong Kong-based BIT Mining announced new Kazakh data centers last June. 

German news outlet DW covered the unrest in Kazakhstan overnight.

Read more: [Coal and taxes: Bitcoin miners have a new home in Kazakhstan]

Still, Khazakstan is far from an oasis for Bitcoin miners, with energy issues preceding current internet outages.

The government limited “over-consuming customers” to a rationed supply after the country’s power grid struggled to keep up with Bitcoin mining.

It’s still unclear how this has affected the country’s Bitcoin hashrate.

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