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Kazakhstan to restrict crypto miners amid power shortages

eurasianet.org

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Re: Kazakhstan to restrict crypto miners amid power shortages

#21

Post by exo762 »

that_guy_iain wrote: post #16
josephcsible wrote: post #2

Wouldn't it make more sense to just let the price of electricity go up?

As far as I can tell cryptocurrency's value comes from how much it costs to mine the currency. So that would just affect everyone who isn't mining currency since the miners just offset their costs by selling.

> As far as I can tell cryptocurrency's value comes from how much it costs to mine the currency

This is wrong. Multiple currencies use proof-of-stake and still have value. Price is determined by demand and supply.

Re: Kazakhstan to restrict crypto miners amid power shortages

#22

Post by p49k »

Tenoke wrote: post #13
FartyMcFarter wrote: post #12

Earlier quoted context omitted.

Maybe it would make more sense to you, but not to most people I think. Electricity has much better uses than cryptocurrency.

Of course it does. It also has better uses than say gaming, so if that is the logic maybe that should be banned, too.

Gaming isn’t a major contributing cause to a country’s energy crisis.

Re: Kazakhstan to restrict crypto miners amid power shortages

#23

Post by baybal2 »

josephcsible wrote: post #19
that_guy_iain wrote: post #16

Earlier quoted context omitted.

As far as I can tell cryptocurrency's value comes from how much it costs to mine the currency. So that would just affect everyone who isn't mining currency since the miners just offset their costs by selling.

But cryptocurrency can be mined anywhere, not just in Kazakhstan. If only Kazakhstan raises their electricity prices, then the price of the cryptocurrency will basically stay the same, but mining will naturally move elsewhere.

Kazakhstan been intermittently on the 1st, and 2nd place for mining output since fall in Chinese output.

USA regained the firm lead after a few months when bigger Chinese mines moved there.

Re: Kazakhstan to restrict crypto miners amid power shortages

#24

Post by robjan »

fastball wrote: post #14
pjc50 wrote: post #9

Earlier quoted context omitted.

That makes everyone else in the country worse off.

If mining is a net positive for Kazakhstani miners, doesn't that make the country better off? That's a net export.

No, because everyone pays higher electricity bills while a small number of people benefit from selling their mined crypto.

Re: Kazakhstan to restrict crypto miners amid power shortages

#25

Post by xattt »

baybal2 wrote: post #20
throw1234651234 wrote: post #4

Earlier quoted context omitted.

No. Role of government is to provide minimum standard of living for general population. A lot of people will freeze in Kaza, as basic necessities are a huge part of their monthly budget and price hike is too severe to handle. "Let market sort itself" only works if government thinks about it in advance, have fair elections, low corruption, etc. Cost of natural gas / coal / oil is going up significantly and is a huge p…

Almost all residential heating in big cities in Kazakhstan comes from cogeneration. They would've gone bankrupt if they didn't do it with their weather (-40<C°)

So there is clearly a market for bitcoin cogen, either city scale or the scale of a single dwelling.

Re: Kazakhstan to restrict crypto miners amid power shortages

#26

Post by baybal2 »

FartyMcFarter wrote: post #12
josephcsible wrote: post #2

Wouldn't it make more sense to just let the price of electricity go up?

Maybe it would make more sense to you, but not to most people I think. Electricity has much better uses than cryptocurrency.

All big scale BTC mines buy at industrial prices.

You cannot run a mine bigger than what your wiring can support in your apartment.

None of them is using the subsidised residential rate.

Re: Kazakhstan to restrict crypto miners amid power shortages

#27

Post by cinntaile »

I wonder if cryptominers in poorer countries speed up the buildout of more stable and robust electricity networks in the long run? I understand they sometimes stress it too much in the short run such as here and then the regulators have to take action but the interplay on a longer timescale would be interesting to see.

Re: Kazakhstan to restrict crypto miners amid power shortages

#28

Post by gruez »

that_guy_iain wrote: post #16
josephcsible wrote: post #2

Wouldn't it make more sense to just let the price of electricity go up?

As far as I can tell cryptocurrency's value comes from how much it costs to mine the currency. So that would just affect everyone who isn't mining currency since the miners just offset their costs by selling.

You got cause and effect flipped. Cryptocurrency's value determines how much money can be poured into mining it. If bitcoin is at $60k, the block reward is 6.25 BTC, and there's a block every 10 minutes, then the entire mining bitcoin mining system can only consume 6.25 * $60k = $375k worth of electricity every 10 minutes. If the cost of electricity doubles, all that would mean is that the system can consume half as much electricity.

Re: Kazakhstan to restrict crypto miners amid power shortages

#29

Post by baybal2 »

DantesKite wrote: post #15
josephcsible wrote: post #2

Wouldn't it make more sense to just let the price of electricity go up?

It actually would to some extent in a country with capable infrastructure. But I don’t believe Kazakhstan has that luxury.

Kazakhstan used to have big oversupply of electricity. They used to sell electricity to Russia before bitcoins appeared.

Re: Kazakhstan to restrict crypto miners amid power shortages

#30

Post by notahacker »

josephcsible wrote: post #2

Wouldn't it make more sense to just let the price of electricity go up?

I mean, as an authoritarian state whose elections are generally considered rigged they probably could let their peasants choose between darkness and food/heat to ensure wealthy foreigners continued to to use their country to print themselves money, but I'm not sure it would make sense to do so...
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