Russia bails out Kazakhstan as Chinese Bitcoin miners suck power grid dry
Kazakhstan is resorting to bussing in extra Russian electricity after an influx of displaced Chinese Bitcoin miners pushed its own power supply beyond breaking point.
As reported by Eurasianet, Chinese miners have flocked to Kazakhstan since Beijing outlawed crypto mining in September.
The resulting migration has played a part in a 8% increase in the country’s energy usage. For reference, it usually increases about 2% annually.
In response, Kazakhstan turned to what’s known as the “united network” — shared power lines established when Russia and Kazakhstan were part of the Soviet Union.
However, even this didn’t provide enough power to cover the increased demand. Russian state power company Inter RAO began talks to provide extra energy to its struggling neighbour, albeit at a higher rate.
Speaking at a press conference this month, Kazakhstan’s deputy energy minister Murat Zhurebekov said the nation had no option but to use the united network.
Indeed, providing the required amount of energy by itself would take Kazakhstan at least five years and cost $1.5 billion.
Kazakhstan unsure how to manage Bitcoin popularity
Kazakhstan has set a number of measures this year as it grapples with its newfound status as a Bitcoin mining hub.
In June, President Kassym-Jomart Tokayev brought in laws to increase taxes on energy consumed by crypto miners.
The new legislation, in effect as of January, will introduce an extra $0.00233 per kilowatt-hour fee.
Then in October, Kazakhstan announced plans to ration power and suspend supply to consumers who use too much — again, as a result of incoming Chinese Bitcoin miners.
[Read more: Bitcoin miners overload Kazakhstan’s electricity grid, forcing rations]
According to new research, Kazakhstan became the world’s second biggest Bitcoin miner in August. This put it just behind the United States with a global mining share of over 16.5%.
Things reached breaking point when three major power plants in the country were forced offline.
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