Putin’s Other Squeeze
Up until a few months ago, Kazakhstan was home to a thriving Bitcoin-mining community. Alas, “mining” Bitcoin requires powerful computers to solve increasingly complex equations. It’s a very energy-intensive process, both to run the software and to keep the hardware from literally melting down.
With a relatively cold climate, abundant cheap energy and plenty of space, Kazakhstan offered a perfect place for miners to set up shop. It’s also right next door to China, which proved convenient when the Chinese government suddenly banned digital mining in June 2021. Unfortunately for just about everyone in Kazakhstan, energy prices were low simply because of government decree. As production costs rose, the government removed the caps — and companies wasted no time boosting what people had to pay for fuel. The sudden spike led to civil unrest… and violent crackdowns. The Kazakhstani government shut down the internet and Russia sent in troops to keep order in its southern neighbor. With that, the world suddenly lost a good chunk of Bitcoin mining.