Woman walking in front of a Bitcoin sign
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Kazakhstan Bitcoin Mining Falls As Country Shuts Off the Internet

Ade Hennis - Author

Jan. 6 2022, Published 1:54 p.m. ET

Protests have spread across the country of Kazakhstan, where local civilians have struggled with internet access over the last few days. On Jan. 5, the country took a huge blow after internet access was shut down completely, which caused Bitcoin mining activities to plummet.

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Kazakhstan is one of the world’s leaders in Bitcoin mining. As the country tries to regain internet access, local mining and Bitcoin mining around the world have been affected. The price of Bitcoin fell over 8 percent on Jan. 5 and went lower than $42,500 for the first time in over a month.

Source: Getty Images
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What's happening in Kazakhstan?

The protests were initiated on Jan. 2 in revolt against high fuel prices. However, it wasn’t just the high fuel prices that sparked the protests. Kazakh citizens have been frustrated by government leadership and having high expenses without enough income. According to Kazakhstan’s government statistics website, the average salary for citizens is around $570 a month, while people many earn much less than that.

Liquefied petroleum gas, or LPG, is the fuel that many Kazakh citizens use in the country. The government recently lifted the price caps for LPG, which caused the price to double.

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For many protestors, that was the final straw. They have cited that the price cap lift would cause the prices of food and other resources to increase as well. Inflation in the country has already seen some of the highest rates in recent years, and the fuel price increase doesn't help with local consumer spending.

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Since Jan. 2, protests have become increasingly rampant. There have been dozens of casualties, hundreds of injuries, and citizens and authorities have suffered. On Jan. 4, the Kazakhstan government reportedly resigned and set a state of emergency.

Kazakhstan's government imposed a two-week curfew and a ban on mass gatherings, but the imposed restrictions haven't helped contain the protests. Local authorities claim that over 500 civilians have been injured, while over 100 vehicles have been destroyed. Authorities also said that dozens of officers have been killed due to the protests.

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In an attempt to help combat the protests, Kazakhstan leaders asked for the help of the CSTO (Collective Security Treaty Organization), which is widely referred to as the Russian version of NATO. The CSTO agreed to intervene and members were deployed on Jan. 5. Kazakhtelecom, the country’s largest telecommunications company, shut down the internet on Jan. 5 and left many citizens without internet or phone capabilities. The only source of media some citizens have access to is the television.

Kazakhstan's decrease in Bitcoin mining impacts worldwide mining.

When it comes to the Bitcoin hash rate, which involves the amount of computational power used for Bitcoin mining, Kazakhstan ranks second in the world behind the U.S. So, when the country lost internet access on Jan. 5, it impacted local miners as well as the mining power around the world.

Kazakhstan reportedly accounts for approximately 18 percent of the world’s BTC hash rate. The country became a powerhouse in BTC mining, after China, which used to be the world’s leader in hash rate, banned mining in its country. China's move allowed the U.S. to move up to number one with Kazakhstan right behind it.


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