The country of Kazakhstan has geared up against the mining of cryptocurrency and there are new rules and regulations in the country that are targeting the miners of crypto. This particular country in the part of Central Asia has not been in support of cryptocurrency miners and it is pretty evident that these news rules are set forth in order to ensure the discomfort of cryptocurrency miners.
The government of Kazakhstan has proposed about 3 different types of increases in the prices along with taxes and electricity price increases that will specifically target all the miners of cryptocurrency in the country, according to cryptocurrency breaking news today.
According to the Government of Kazakhstan, considering a proper three-pronged proposal that is designed in order to make all the crypto miners pay more money for mining in this particular country, is the right decision to make. This decision made by the government of the country could make Kazakhstan more unattractive to the entire crypto industry which might not be a very ideal situation.
On the 4th of February, the First Vice Minister of Finance in Kazakhstan, Marat Sultangaziyev, made the proposal of the increase from $0.0023 per Kwh to $0.01 which is about 335% increase. This was especially the case for the miners who were interested in cryptocurrency mining.
Apart from that, he also made a proposal of including taxes on certain aspects such as the GPU or the Individual Graphics Card as well as certain equipment that the people who definitely require in order to make sure that they are able to properly complete the task of crypto mining in the best way.
He also likened all the tax-per-video cards to the different ways in which casinos are properly taxed on the tables that they are running whether or not that particular table is active.
For the third part of the proposal made by him, he mentioned that mining hardware should be removed from an exemption on the VAT or Value Added Tax. This can be seen as targeting by the people who are in the community of cryptocurrency.
Mining for Bitcoin calls for the usage of certain hardware for completing the mathematical calculations that are required to form new blocks on the blockchain. Different mining operations that are pretty large will contain more than 10,000 mining rigs that also include ASICs (application-specific integrated circuits), cooling units, GPU, racks, as well as associated facilities.
Until the political unrest which caused the Kazakh government to impose restrictions on access to the internet for the last month, the country has definitely become a very popular name for crypto miners following the ban on cryptocurrency that was imposed in China that took place around last summer. Around the 5th of January, the Bitcoin network’s hash rate plummeted by 13.4% in a day from about 205 exahashes per second (EH/s) to 177 EH/s due to the brief shutdown that took place in Kazakhstan.
BIT Mining, a very huge operation for Bitcoin mining that moved from China to Kazakhstan last July, made a statement in January that all the political unrest would not force it to move the operations anywhere else. However, that was before the increase in tax and power were proposed.
It should also be noted that Kazakhstan has struggled with power supply issues since late last year, around the same time when crypto miners rushed in from China.
The country saw an 8% increase in domestic electricity consumption through 2021, leading the government to consider building a nuclear power plant to ease the stress on the power grid and keep energy costs low. However, targeting crypto miners due to the state of Kazakhstan is definitely not going to be welcomed by the community.