Wed. Jun 12th, 2024

Kazakhstan Unrest/Internet Shutdown Stifles Global Bitcoin Mining Operations.

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Kazakhstan the second largest centre for mining of cryptocurrencies is facing civil unrest, Bitcoin took a hit on Thursday after the internet in Kazakhstan was shut down amid intensifying violence.

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The hashrate at major crypto mining pools – groups of miners in different locations that team up to produce bitcoin – was down 14% from Tuesday to Thursday, according to data from mining firm BTC.com.

Bitcoin’s price, too, took a plunge – a drop in hashrate doesn’t necessarily boost price. The cryptocurrency fell below $43,000 on Thursday, testing multi-month lows.

Kazakhstan is a power player in the bitcoin world. Last year, the nation became the world’s second-largest center for bitcoin mining after the United States, according to the Cambridge Centre for Alternative Finance, after China, a major hub, clamped down on crypto mining activity. As of August, Kazakhstan was hosting 18% of global bitcoin mining, according to Fortune.

Within the hours of the outage, bitcoin’s computational power sank.

Bitcoin and other cryptocurrencies are created or “mined” by high-powered computers, usually at data centers in different parts of the world that compete to solve complex mathematical puzzles in a highly energy-intensive process.

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.

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