Sign up to save your podcasts
Or
Share Crypto and protest: The Kazakhstan issue reveals Bitcoin’s susceptibility
Share to email
Share to Facebook
Share to X
Share to email
Share to Facebook
Share to X
Or
Crypto and protest: The Kazakhstan issue reveals Bitcoin’s susceptibility
The situation in Kazakhstan has had a significant impact on the value of cryptocurrencies.
On the morning of January 7, the Bitcoin price continued to decline. The price of the world's most popular cryptocurrency plunged by 8% to below $42,000, while altcoins also suffered losses. A considerable fall in the hash rate — the entire computational power of mining equipment — was observed in pools popular with Kazakhstanis. 1THash, OKExPool, and KuCoinPool were also impacted, while larger pools such as F2Pool, AntPool, and ViaBTC saw a drop in performance.
Bitcoin's decline has been directly linked by experts to Kazakhstan's lack of internet access. On January 7, Kazakhstanis awoke to the news of internet suspension as anti-government rallies shook the country.
According to Nikita Zuborev, senior analyst at the Bestchange.ru project, the situation in Kazakhstan is more of a trigger for the pricing phenomena than a cause.
"It would be naive to suppose that what transpired will have no impact on the crypto market." "However, it is not worth exaggerating Kazakhstan's significance within the overall business," the researcher emphasises.
According to him, Bitcoin prices fell mostly as a result of the global stock market's decline against the backdrop of a possible increase in the Federal Reserve's key rate in the spring.
Miner's hideout
According to an October analysis by the University of Cambridge Business School, Kazakhstan ranks second among countries where Bitcoin is mined. Its share is 18.1 percent, lagging the US, which accounts for 35.4 percent of worldwide output of the primary cryptocurrency. According to the experts' research, these countries' rankings jumped significantly during the year, owing to mining limitations in China.
In September 2019, Chinese enterprises accounted for 75% of all crypto mining, but by the first half of 2021, that percentage had dropped to 46% since, on September 24, last year, the People's Bank of China imposed a comprehensive ban on cryptocurrency transactions in the nation.
The crypto crisis was novel in Nur-Sultan, Kazakhstan's capital. The Kazakh power grid provider Kegoc announced in October that its grids are being overloaded by the dramatic increase in energy usage by individuals involved in digital mining. The practise has also increased the number of accidents at power plants, while power demand has outpaced generation in the country. Later, the Ministry of Energy, in collaboration with Kegoc, proposed a variety of solutions to lessen the strain on the country's power facilities.
The possibilities are limited.
In actuality, global protests in 2019-2020 have already revealed the bitcoin market's vulnerability: technological security was one of the areas affected. For example, during the height of civil instability in Lebanon, a large number of Bitcoin merchants complained that unknown hackers had gotten access to their mobile phones and were able to win a large reward. Furthermore, hackers had acquired access to the enormous Lebanese communications operator Touch, which could have played a role in harming so many people.
The fact that Bitcoin and related systems are not ready for usage in the event of a force majeure, which was also debated by bitcoiners in Hong Kong when large-scale demonstrations erupted there. They bemoaned the fact that transactions remained overly reliant on official telecommunications networks, which were easier for the state to regulate. According to CoinDesk, an unnamed insider in the Hong Kong business, "people are increasingly simply transferring their money outside, but it happens from bank to bank."
CoinDesk's contacts in Iran concur, where protests against a backdrop of social dissatisfaction occur with frightening regularity. "In a circumstance where we don't have a normal physical connection, none of this damn technology will help you!" said one of the Iranian bitcoiners in a talk with a publication, commenting on the operation of the common cryptocurrency system. "We are imprisoned in a prison erected for us by the governments of America and Iran."
The protests in Kazakhstan had an impact not only on the global value of Bitcoin, but also on the price of uranium, one of the Central Asian republic's main natural resources. In reality, Kazakhstan accounts for more than 40% of global uranium output. This week, the spot price of uranium oxide concentrate has risen by roughly 8%.
Support us!
View all episodes
By Crypto PiratesThe situation in Kazakhstan has had a significant impact on the value of cryptocurrencies.
On the morning of January 7, the Bitcoin price continued to decline. The price of the world's most popular cryptocurrency plunged by 8% to below $42,000, while altcoins also suffered losses. A considerable fall in the hash rate — the entire computational power of mining equipment — was observed in pools popular with Kazakhstanis. 1THash, OKExPool, and KuCoinPool were also impacted, while larger pools such as F2Pool, AntPool, and ViaBTC saw a drop in performance.
Bitcoin's decline has been directly linked by experts to Kazakhstan's lack of internet access. On January 7, Kazakhstanis awoke to the news of internet suspension as anti-government rallies shook the country.
According to Nikita Zuborev, senior analyst at the Bestchange.ru project, the situation in Kazakhstan is more of a trigger for the pricing phenomena than a cause.
"It would be naive to suppose that what transpired will have no impact on the crypto market." "However, it is not worth exaggerating Kazakhstan's significance within the overall business," the researcher emphasises.
According to him, Bitcoin prices fell mostly as a result of the global stock market's decline against the backdrop of a possible increase in the Federal Reserve's key rate in the spring.
Miner's hideout
According to an October analysis by the University of Cambridge Business School, Kazakhstan ranks second among countries where Bitcoin is mined. Its share is 18.1 percent, lagging the US, which accounts for 35.4 percent of worldwide output of the primary cryptocurrency. According to the experts' research, these countries' rankings jumped significantly during the year, owing to mining limitations in China.
In September 2019, Chinese enterprises accounted for 75% of all crypto mining, but by the first half of 2021, that percentage had dropped to 46% since, on September 24, last year, the People's Bank of China imposed a comprehensive ban on cryptocurrency transactions in the nation.
The crypto crisis was novel in Nur-Sultan, Kazakhstan's capital. The Kazakh power grid provider Kegoc announced in October that its grids are being overloaded by the dramatic increase in energy usage by individuals involved in digital mining. The practise has also increased the number of accidents at power plants, while power demand has outpaced generation in the country. Later, the Ministry of Energy, in collaboration with Kegoc, proposed a variety of solutions to lessen the strain on the country's power facilities.
The possibilities are limited.
In actuality, global protests in 2019-2020 have already revealed the bitcoin market's vulnerability: technological security was one of the areas affected. For example, during the height of civil instability in Lebanon, a large number of Bitcoin merchants complained that unknown hackers had gotten access to their mobile phones and were able to win a large reward. Furthermore, hackers had acquired access to the enormous Lebanese communications operator Touch, which could have played a role in harming so many people.
The fact that Bitcoin and related systems are not ready for usage in the event of a force majeure, which was also debated by bitcoiners in Hong Kong when large-scale demonstrations erupted there. They bemoaned the fact that transactions remained overly reliant on official telecommunications networks, which were easier for the state to regulate. According to CoinDesk, an unnamed insider in the Hong Kong business, "people are increasingly simply transferring their money outside, but it happens from bank to bank."
CoinDesk's contacts in Iran concur, where protests against a backdrop of social dissatisfaction occur with frightening regularity. "In a circumstance where we don't have a normal physical connection, none of this damn technology will help you!" said one of the Iranian bitcoiners in a talk with a publication, commenting on the operation of the common cryptocurrency system. "We are imprisoned in a prison erected for us by the governments of America and Iran."
The protests in Kazakhstan had an impact not only on the global value of Bitcoin, but also on the price of uranium, one of the Central Asian republic's main natural resources. In reality, Kazakhstan accounts for more than 40% of global uranium output. This week, the spot price of uranium oxide concentrate has risen by roughly 8%.
Support us!