Bitcoin: How Kazakhstan has become a major mine of the world’s cryptocurrency

19-year-old Almay Magaz works in the largest Bitcoin mine in Kazakhstan

Since China abruptly banned cryptocurrency mining last year, the business has grown rapidly in neighboring Kazakhstan. The Central Asian country is now in second place in the mining business or coin mining of Bitcoin, which is known as crypto currency. America is the leader in this business.

But while Kazakhstan’s mining business is booming, the huge amount of fuel needed to run these mining businesses, which can be called mines in a sense, is now putting great pressure on the country’s coal-based power plants and is causing great concern.

But how does Bitcoin work? How is currency mined?

Moldi Shubayeva has entered this new business. Construction engineers and construction workers are building their new Bitcoin mine on dusty land.

Dressed in a classic suit and large yellow sunglasses, 35-year-old Moldy is supervising the construction of his own mine. Moldi is believed to be the first female Bitcoin miner in Kazakhstan.

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          Moldy Shubayeva is believed to be the first female Bitcoin miner in Kazakhstan.

Women in the Bitcoin Mining Industry

Moldy Shubayeva is one of the new traders who jumped into the new business of cryptocurrencies that has rapidly accumulated in Kazakhstan. He himself is overseeing all the details of the construction of his new mine in the city of Almaty.

Moldi has become an exceptional figure in this male-dominated business world. As he became one of the leading businessmen in the country’s bitcoin mining business, the respect for him in the business community has also increased.

I have spent the last four years of my life in this business. I even slept in the office at night, “he said.

Five years ago, Moldy became interested in the bitcoin mining business and started mining this currency with his brother at home. He then went on to build large mines and rented out some of his mines to other customers.

He says the bitcoin business in Kazakhstan, as well as his own business, is booming. Business has never been better, especially in the past year.

“Every morning I start by looking at how much the price of bitcoin has gone up. When I saw that the price of each bitcoin had reached $50,000 – I was excited! Adrenaline levels in my blood shot up. “

The price of bitcoin has risen dramatically. In March 2020, the price of one bitcoin was about $5,000. And in just one year, the price of a coin has jumped to $65,000.

But after that, the price of bitcoin fell sharply. At the time of writing this report, one coin is now worth $35,000. So you can understand how volatile the bitcoin market is – how uncertain this business is like a gamble.

But even so, Moldir and other cryptocurrency miners like him in Kazakhstan have made a lot of money from this business.

Bitcoin is the currency of the future?

The caption of the video,

What will be the future of cryptocurrencies like Bitcoin?

What is a digital gold mine?

Cryptocurrency mining is the process of creating cryptocurrencies called Bitcoin, Ethereum, and Litecoin.

And what are these mines? Why is it called a mine? Because they are digital. What is the role of mining in its creation?

Digital currency is not controlled by any central authority or bank. Because these transactions take place in the virtual world. A vast computer network, operated voluntarily at the individual level, monitors and monitors every payment and currency transaction.

The calculation of this currency is very complicated. Therefore, this complex calculation requires a lot of computer power. This computer network generates a digital currency by performing complex calculations.

Cryptocurrencies, like bitcoin, are born out of very difficult calculations – so it takes a computer’s strong mathematical skills to dig them out.

And those who help to keep this commercial system running by bringing Bitcoin, Bitcoin provides currency to the world, this system allows them to fill their pockets in exchange for their work. However, the revenue is generated in the virtual world.

With the encouragement of enterprising bitcoin traders like Moldir, Kazakhstan has now taken its place next to the United States in bitcoin mining. Kazakhstan is now the source of about 18% of the energy in the reserves of bitcoin that are being created worldwide to keep the bitcoin currency system running.

The cryptocurrency industry began to develop in Kazakhstan in 2019. The most helpful force behind this was the country’s cheap, available and abundant supply of electricity. Also, the government’s crypto-currency friendly policy.

But this business started to grow rapidly from the summer season of 2021. The main reason behind this was that neighboring China had suddenly and unexpectedly announced a ban on all types of cryptocurrency mining in the country at that time.

After that, the Bitcoin mining company grew like an umbrella of banks in the country. There were thousands of computers sitting there.

Some companies were already established in Kazakhstan for the production or mining of bitcoin coins. But the sudden closure of mines in China led to a boom in mining in Kazakhstan.

What happens to these huge mines in Kazakhstan?

To get a sense of how this industry has spread in Kazakhstan, you need to go to the isolated town of Ekibastuz, 800 miles from Almaty. There is always a strong wind in the city.

But here is what was until recently known as the world’s largest cryptocurrency mine, a bitcoin mine created by the company Anegix.

  Enegix’s mine in Ekibastuz is the world’s second-largest bitcoin mine

The first thing you will notice when you enter this huge mine is the loud noise there.

There are thousands of powerful computers inside. The inner wings of the computers are rotating at full speed.

At the other end of the mine, which is spread over a large area, are huge blades of a huge fan to reduce the temperature. From there, a low-pitched sound is being produced – which is making noise all the time.

The constant sound of these machines running all the time inside the mine keeps me energized, stimulated – because to me it is the sound of money flowing – the sound of earning digital money, said 34-year-old Yerbolsin with a smile.

Like Moldir, Yerbolsin became interested in bitcoin a few years ago and started on a small scale.

At first Yerbolsin set up his mines in a small garage. There were only a few computers there. From there, the size of its mines has increased today. He has installed $300 million worth of equipment inside eight large single mine chambers made of metal. The mine, which he owns, operates 24 hours a day, seven days a week – creating cryptocurrency there non-stop.

         There are eight warehouses inside the mine, which contain 50,000 pieces of equipment. This machine is creating or mining Bitcoin and other digital currencies.

‘It’s a matter of pride for the country’

The mine employs 150 workers who work 24 hours a day to keep the equipment up and running. Dozens of engineers live in the desert region of Kazakhstan and work 15-day shifts at the mine.

Digital currency is being created through the management of these very powerful computers.

Alma Magaz is 19 years old. He worked 12 hour shifts. Its main task is to keep the factory premises completely dust-free. Dust can disrupt the performance of the computer. If there is a computer glitch, Almay has to fix it. The main responsibility is to restart the computer as soon as possible.

He admitted that at first he had no idea of the workings of these devices.

“I didn’t know anything about Bitcoin before I came here, I’ve never even heard of Bitcoin in my life! ” he said.

Yerbolsen oversees the work of Almay and his colleagues. Sitting in Almaty, he monitored their work through a large bank of CCTV footage.

“It is a matter of great pride for us that Kazakhstan has become so important in the world of cryptocurrencies,” Yerbolsen said. “We are patriots. We want to raise the flag of our country higher! “

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at risk to the environment

However, not everyone is proud of this recent achievement of Kazakhstan. Environmentalists are often vocal in their criticism of the vast amounts of fuel being used to mine this currency.

According to the University of Cambridge’s Bitcoin Electricity Usage Index, mining bitcoin requires more electricity than the entire country, such as Ukraine or Norway.

It is not known how much of this energy is renewable, but climate expert Dana Yemlyonk says that only 2% of the energy used in Kazakhstan comes from renewable energy.

“The energy here is largely coal-based – especially the energy that is used for heat and electricity, the source of that coal,” he says.

  Only 2% of Kazakhstan’s electricity comes from renewable energy

Dana lives in Karaganda, a town with one of the largest coal mines in Kazakhstan. He suspects that the fee the country has to pay for the environment is much higher than the wealth the country is earning from cryptocurrency mining.

“I see the pollution level every day when I step out of the house. When there is no air in the winter, the house next door is also not visible in the pollution. They will earn and for that why should I breathe in this polluted air? “

Concerns about the energy

The way cryptocurrency mining has grown has also raised concerns that there may be a shortage of fuel.

The government says that due to the amount of currency mined in a year, the demand for fuel has increased by 7-8% in a year across the country.

The amount of electricity used to mine cryptocurrencies in the country is equivalent to the amount of fuel needed to meet the lighting needs of a large city in Kazakhstan.

In November, it had to import additional electricity from Russia to meet the increased demand for electricity. The mining of bitcoin or digital currency has been banned in areas where there is not enough electricity supply. As a result, some miners have had to close their businesses or relocate.

Askhat Orajbek, the country’s deputy minister of digital development, told the BBC that the sudden growth of the cryptocurrency business in Kazakhstan was too fast to be regulated.

His government has imposed an additional tax on the mining industry from January 2022. They hope that by using this additional revenue, they will be able to develop the use of pollution-free fuel.

মি. Orajbek admitted that the fuel used by the Bitcoin mining industry in Kazakhstan is polluting the environment and that they are going to introduce certain quotas for the cryptomining business.

However, there is no indication that Kazakhstan will follow in the footsteps of China, Kosovo and Russia.

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A threat to the government?

“It’s a technological revolution,” Mr. He says.

“We don’t want to lose this moment, we want to be part of the revolution that is happening in the world of cryptocurrency. “

Massive protests erupted in Kazakhstan earlier this month against a sudden rise in fuel prices. The country is still reeling from the wave of protests.

Although the protest was not directly related to the mining of crypto currency, two important things became clear from the protest.

One is what might happen if the energy supply is threatened. And secondly, how important Kazakhstan has now become in the world of mining crypto currencies like Bitcoin.

When the Kazakh government shut down the internet connection for five days during the protests, it had a significant impact on the global Bitcoin network. The market for this digital currency was sluggish, which led to a large decline in the price of Bitcoin in the world.

Therefore, how the Kazakh government will handle this new and rapidly growing industrial world can become a huge challenge for the country’s government in the future.