The second country with the highest Bitcoin mining hash rate in the world is Kazakhstan. The Eurasian country is putting limits on electricity consumption by mining facilities.

Kazakhstan received Bitcoin miners fleeing from neighboring China but will restrict the rate of energy consumption by their business.

The draft regulation of the Ministry of Energy of Kazakhstan is dated October 1st. However, the authorities closed the period of discussion around the proposed law on October 18th.

They decided that each licensed mining farm could receive up to 1 megawatt of electrical power for two years. In addition, they established that that activity should not receive more than 100 MW of electrical energy in Kazakhstan.

No one knows whether the authorities would lift the restriction after those two years, but it will be in force around December 16th.

A translation of the announcement indicates that the Kazakhstan Electricity Grid Operating Company received instructions to initiate an audit. They seek to evaluate the technical conditions of cryptocurrency mining farms with a consumption capacity greater than 5 MW. Their purpose is to verify how they connect to the national and regional electrical grid.

Several Countries Seek to Use Their Energy Resources to Balance Bitcoin Mining

The restrictions on the use of electric power come after cryptocurrency mining grew exponentially in Kazakhstan this year. According to the Cambridge Center for Financial Alternative, it is the second country that hosts the highest Bitcoin hash rate worldwide (18%).

The United States, Argentina, Canada, and Kazakhstan, among other nations, have hosted Bitcoin miners fleeing the bans by China. They have also been interested in those countries because of the prices and nature of energy production. For example, the US has reserves of residual natural gas, Kazakhstan has mines of mineral coal, and Argentina generates hydroelectric power.

Iran had restricted cryptocurrency mining due to energy stability but later lifted the bans. The authorities stated their decision responded to the impact of the activity on the electricity consumption in the country. Furthermore, they said that many unlicensed miners have illegally profited from the power grid, causing major power outages in the country.

Bitcoin miners authorized to operate in Iran reactivated their farms after the four-month hiatus. The government lifted the ban that restricted the operations of those businesses due to increased energy consumption during the summer.

Russia also plans to apply measures to cryptocurrency mining in terms of the use of electrical energy. The head of the Russian Energy Ministry, Nikolai Shulginov, said that such activity could be subject to special rates.

The same is happening in Kazakhstan, where they received and encouraged cryptocurrency mining. However, they later adjusted the regulation to decrease consumption and its impact on their energy resources.

Some countries do not have electrical services that work well and tend to depend on the seasons or the availability of energy resources. For that reason, a wave of Bitcoin miners like those coming from China could cause the capacity of the systems to collapse.

By Alexander Salazar

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