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Bitcoin: The Way Kazakhstan has become a mine to create cryptocurrencies

Bitcoin: The way Kazakhstan has become a mine to create cryptocurrencies


The business has been booming in neighboring Kazakhstan since China abruptly banned cryptocurrency mining last year.

Bitcoin, also known as cryptocurrency, is now the second largest mining business in Central Asia. America is in the first place in this business. However, despite the boom in Kazakhstan's mining business, the huge amount of energy required to run the mining business, which is in a sense a mine, is now putting tremendous pressure on the country's coal-fired power plants and raising major concerns.


How are these bitcoin coins? How is the currency mining there?

Moldy Shubayeva has started this new business. Construction engineers and construction workers are building his new bitcoin mine on dusty land.

Moldy, 35, is in charge of his own mining business, wearing fashionable clothes and large yellow sunglasses. Moldy is thought to be the first female owner of a Bitcoin mine in Kazakhstan. 


Women are also in the bitcoin mining business

Moldi Shubayeva is one of the new entrants to the fast-growing cryptocurrency business in Kazakhstan. He is overseeing the construction of his new mine in Almaty.
 
In this male dominated business world, Moldy has become quite an exceptional personality. As he became one of the foremost businessmen in the country's bitcoin mining business, the respect of the business community towards him has also increased.

"For the last four years, I've spent almost all of my life behind this business. I've even slept in the office at night," he said.

Five years ago, Moldy became interested in bitcoin mining and started mining the coin with his brother at home. He then went on to build large mines and began renting some of his mines to other customers.

He says the bitcoin business in Kazakhstan, as well as his own business, has flourished. Especially in the last year, there has never been a downturn in business growth. Every morning I start by looking at how much the price of Bitcoin has gone up. When I see that the price of a single bitcoin has reached 50 thousand dollars - I keep toggling with excitement! The level of adrenaline in my blood also keeps increasing by leaps and bounds.

Bitcoin prices fluctuate dramatically. In March 2020, the value of a bitcoin coin was about five thousand dollars. And in just one year, the price of a coin has jumped to 75 thousand dollars. However, the price of Bitcoin has fallen sharply since then. At the time of writing, the price of a coin is now 35,000. So you understand how volatile the Bitcoin market is - what kind of uncertain business this business is like. But even then, the owners of Moldy and other cryptocurrency mines in Kazakhstan made a lot of money from this business.

What is a digital gold mine?

Crypto-mining or cryptocurrency mining is a method of creating cryptocurrencies that have created a market called Bitcoin, Ethereum, Lightcoin. But what kind of mines? Why are these called mines? Because these are digital currencies. What is the role of excavation in making these?
 
Digital currency is not controlled by any central authority or bank. Because these currencies are traded in the virtual world. A huge computer network, operated on a voluntary basis at the individual level, monitors and monitors every payment and currency transaction.

The calculation of this currency is very complicated. So this complex calculation requires a lot of computer power. These computer networks perform complex calculations and retrieve individual digital currencies.

A lot of hard calculations give birth to a single cryptocurrency like Bitcoin - so it takes a lot of computer mathematical talent to dig them out.

And for those who help keep Bitcoin afloat by bringing in Bitcoin, providing money to the Bitcoin world, this system gives them a chance to fill their pockets in return for their work. However, the link to earnings is in the virtual world.

Encouraged by enterprising bitcoin traders like Moldier, Kazakhstan now ranks second only to the United States in bitcoin mining. Kazakhstan is now the source of about 16% of the world's bitcoin currency, which is being created to keep the Bitcoin currency system afloat.
 
The cryptocurrency industry has been developing in Kazakhstan since 2019. The most powerful force behind this was the country's cheap, readily available and abundant supply of electricity. As well as the government's cryptocurrency friendly policy.

But the business has been booming since the summer of 2021. The main reason for this was the sudden and unexpected ban on all kinds of cryptocurrency mines in neighboring China at that time.

After that, bitcoin mining company flourished in the country like a frog's umbrella. Thousands of computers started sitting there.

Some companies were already formed in Kazakhstan to make or mint Bitcoin coins. But with the sudden closure of mines in China, the tide of mining in Kazakhstan came.

What happens to these huge mines in Kazakhstan?

To get a glimpse of what kind of expansion of this industry has taken place in Kazakhstan, you have to go to the isolated city of Ekibastu, 800 miles from Almaty. There is always a gust of wind in the city.

But here it is until now what was known as the world's largest cryptocurrency mine, a bitcoin mine built by the Annex Company.
The first thing that comes to your mind when you enter this huge mine is the loud noise there.

Inside, thousands of powerful computers are running together. The wings have been shown solely to give a sense of proportion.

The huge blades of a huge fan are used to reduce the temperature at the other end of this mine which is spread over a huge area. From there a low level sound is being made - which is constantly making noise - all the time.

"The constant sound of these machines running all the time inside the mine keeps me energized, excited - because to me this word is the sound of money flow - the sound-signal of making digital money," said Yerbolsin, a 34-year-old owner of the center with a smile.

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

Yerbolsin first set up his mine in a small garage. Then he put only a few computers there. Starting from there, today the size of its mine has increased enormously. He has installed equipment worth 300 million inside eight huge one-story mine houses made of metal. The mine he owns operates seven days a week, 24 hours a day - creating non-stop cryptocurrencies.

'This work is very proud of the country'
One and a half hundred workers work in this mine, whose job is to keep these machines running and working 24 hours a day. Dozens of engineers live in this desert region of Kazakhstan and work in the mine on a continuous 15-day shift.

Digital currency is being created by managing these very powerful computers.

Almaz Magay is 19 years old. He works twelve-hour shifts. His main job is to keep the factory houses completely dust free. Dust can interfere with computer performance. If there is a computer noise, Almaz has to fix it. It is his responsibility to get the computer up and running as soon as possible.

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

"Before I came here, I didn't know anything about Bitcoin. I have never heard of Bitcoin in my life," he said.

Yerbolsen oversees the work of Almaz and his colleagues. Sitting in Almaty, he monitors their work through a huge bank of CCTV footage.

"We are very proud that Kazakhstan is now so important in the world of cryptocurrency," Yerbolsen said.

"We are patriots. We want our country's flag to be raised higher!"

Environmental risk-

However, not everyone is proud of Kazakhstan's recent success. Environmentalists are often vocal in their criticism of the huge amount of fuel being used for mining these currencies.

The Cambridge University Bitcoin Power Use Index shows that countries like Ukraine or Norway need more power than the rest of the country needs for bitcoin mining.

It is unknown at this time what he will do after leaving the post. The fuel here is largely coal-dependent - especially for heat and electricity, the source of which is coal.

Dana lives in a town called Karaganda, which has the largest coal mine in Kazakhstan. He suspects that the country is paying more for the environment than the resources it is earning from cryptocurrency mining.

"Every day when I go out of the house, I see the level of pollution. When there is no air in winter, the house next door is not visible due to pollution. They will earn money and why should I have to breathe in this polluted air?"


Concerns about fuel

The rise of cryptocurrency mining has also raised concerns about fuel shortages.

The government says the amount of currency mined in one year has increased the demand for fuel across the country by 6-7% in one year.

The amount of electricity being used for cryptocurrency mining in the country is equivalent to the fuel needed to meet the lighting demand of a large city in Kazakhstan.

Last November, Russia had to import additional electricity to meet the growing demand for electricity. Bitcoin or digital currency mining has been banned in areas where there is insufficient power supply. As a result, some minors have had to close their businesses or relocate.

The country's deputy minister for digital development, Askhat Orazbek, said the sudden rise in cryptocurrency business in Kazakhstan was "very rapid" and should have been controlled.

His government has imposed additional taxes on the mining industry for electricity use since January 2022. They hope to use the extra revenue to build pollution-free fuels.

Orazbek acknowledges that the energy used by Kazakhstan's bitcoin mining industry is creating a polluted environment and that they are going to introduce specific quotas for the cryptocurrency business.

However, there is no indication that Kazakhstan will follow in the footsteps of China, Kosovo and Russia, which have rushed or seized the currency..

A dilemma for the government?

"It's a kind of technological revolution. We don't want to lose this moment, we want to be part of the revolution that is taking place in the world of cryptocurrency," Orazbek said.

Violent protests erupted in Kazakhstan earlier this month in protest of the sudden rise in fuel prices. The country is still coping with the wave of protests.

Although the protest had no direct connection with cryptocurrency mining, two important issues emerged from the protest.

One is what could happen if the fuel supply was threatened. And secondly, how important Kazakhstan is now in the world of cryptocurrency mining like Bitcoin.

When the Kazakh government shut down the Internet for five days during the protests, it had a significant impact on the global bitcoin network. The market for these digital currencies slowed down, leading to a sharp fall in bitcoin prices around the world.

Therefore, how the Kazakh government will handle this new and fast-growing industrial world could be a huge challenge for the country's government in the future.

Source: BBC


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