Kazakhstan’s Hashrate Drops as Internet Blackout Persists

Kazakhstan’s bitcoin mining industry, the world’s second largest, has been severely disrupted for a second day by a nationwide internet blackout amid widespread protests.

• Didar Bekbau, a co-founder of Kazakh mining firm Xive, tweeted yesterday: “no internet, no mining,” and Norway-based researcher Jaran Mellerud confirmed to CoinDesk that it is next to impossible to mine without the internet.
• Top mining pools had lost an average of 10% of their hashrate in 24 hours as of 6 a.m. UTC, according to data from pool BTC.com. The hashrate measures computing power on the bitcoin mining network.
• Kazakhstan is second only to the U.S. in bitcoin mining hashrate, with about one-fifth of the global total according to August data from the Cambridge Bitcoin Electricity Consumption Index.
• “It looks like the internet connection is down in all of Kazakhstan,” Alan Dordjiev, head of the Kazakh National Association of Blockchain and Data Center Industry, told CoinDesk on Thursday. “Therefore none of the farms are able to connect to the mining pools.”
• Bitmain’s platform BitFuFu said at around 3 a.m. UTC today that mines in Kazakhstan were facing disruptions with network connectivity and electricity and that it was trying to connect to local staff.
• Internet watchdog NetBlocks reported that internet connectivity in Kazakhstan is still almost nonexistent. Connectivity was initially lost at around noon UTC Wednesday. “Metrics indicate a simultaneous loss of connectivity affecting multiple providers, which could indicate the use of a centralized kill-switch,” NetBlocks told CoinDesk in a Twitter message.
• The internet was briefly and partially restored during Kazakh President Kassym-Jomart Tokayev’s speech a few hours later, according to NetBlocks, when he asked Russia and its allies to help Kazakhstan tackle what he called a “terrorist threat.”
• Protests erupted in the southern city of Zhanaozhen over a hike in the price of liquefied petroleum gas, commonly used to power cars, which took effect over the weekend.
• Kazakhstan’s electricity grid has been under strain in the last few months. That’s in part because of increased demand from crypto miners, but also because of failures of coal plants and other infrastructure-related issues.
• The protests spread to Almaty, the former capital and largest city by population, and devolved into the worst riots the country has seen since it gained independence from the Soviet Union in 1991, according to international media. Yesterday, protesters reportedly broke into the mayor’s building amid widespread looting.
• Dozens of protesters and 12 police officers have been killed, the Associated Press reported.
• A Russia-led peacekeeping force is set to intervene to quell the unrest.

CORRECTION (Jan. 11, 6:20 UTC): Corrects spelling of Alan Dordjiev’s name in fourth bullet.