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In Kazakhstan, cryptocurrency mining is leading to power shortages.

• Cryptocurrency miners have been causing power outages and blackouts in Kazakhstan.
• The unexpected rise in crypto mining is reported due to mining firms from China flocking to the country following the ban earlier this year.
• To fulfil demand, Kazakhstan plans to charge registered miners in the country and ration electricity.

Kazakhstan is reportedly causing an electricity crisis due to cryptocurrency mining. There were power shortages and even shutdowns at three power plants in October due to a surge in demand for electricity by cryptocurrency miners, , according to a report by the Financial Times.

The country's electrical demand has climbed by 8% so far this year, compared to the average one or two percent. In Kazakhstan, there will be electrical disruptions in six districts next month. KEGOC, the country's electric grid operator, aims to begin limiting electricity to 50 registered miners to assist combat this. This is also to deal with unregistered crypto miners who mine the digital currency illegally from their factories and homes.

The unexpected surge in cryptocurrency mining in Kazakhstan is thought to be owing to China's crypto prohibition early this year. Crypto mining companies were already flocking to Kazakhstan due to low electricity costs, but demand skyrocketed when the ban was enacted. The Financial Times estimates around 87,859 mining rigs have relocated from China to Kazakhstan.

Because the act of producing a new digital coin necessitates the use of large and powerful computers to solve complicated cryptographic riddles, cryptocurrency mining consumes a lot of energy. Each transaction is confirmed through mining since cryptocurrency operates on a decentralised network with no central authority.

Bitcoin, the most popular cryptocurrency, consumes around 80 terawatt-hours of electricity yearly, according to data from the University of Cambridge Bitcoin Electricity Consumption Index.

From 2022 onwards, the Kazakhstan government will charge registered miners a compensation cost of 1 tenge (about $0.0023) per kWh in an attempt to make this work. It is also requesting that Inter RAO, a Russian energy company, contribute to the country's national power grid.

Electricity will be rationed to 50 registered miners by the country's electric grid operator. This is believed to assist catch illicit miners in the country, in addition to charging crypto miners.