Kazakh government resigns, shuts down internet amid protests, causing Bitcoin network hash rate to tumble 13.4%

On
Wednesday,
Kazakhstan,
the
second-largest
country
in
the
world
when
it
comes
to
Bitcoin
(BTC)
mining
hash
rate,
experienced
unprecedented
political
unrest
due
to
a
sharp
rise
in
fuel
prices.
As
a
result,
the
country’s
presiding
cabinet
resigned,
but
not
before
the
state-owned
Kazakhtelecom
shut
down
the
nation’s
internet,
causing
network
activity
to

plunge
to
2%
of
daily
heights
.

The
move
dealt
a
severe
blow
to
Bitcoin
mining
activity
in
the
country.
As
per
data

compiled

by
YCharts.com,
the
Bitcoin
network’s
overall
hash
rate
declined
13.4%
in
the
hours
after
the
shutdown
from
about
205,000
petahash
per
second
(PH/s)
to
177,330
PH/s.
The
country
accounts
for
18%
of
the
Bitcoin
network’s
hash
activity. 

Just
days
prior,
the
Kazakh
government
removed
price
caps
on
liquefied
petroleum
gas
used
for
car
fuel
to
align
with
market
conditions,
which
doubled
its
price
overnight,
sparking
violent
protests.
At
the
time
of
publication,
the
internet
remains
inaccessible
in
Kazakhstan.
If
extended,
the
consequences
could
be
severe
as
internet
services
aside,
the
Data
Center
Industry
&
Blockchain
Association
of
Kazakhstan
expects
the
country
to
generate

$1.5
billion
from
legal
cryptocurrency
mining

(and
another
$1.5
billion
in
illicit)
activities
over
the
next
five
years.

The
country’s
low
energy
prices
have
attracted
both
domestic
and
foreign
entities

to
set
up
shop
for
Bitcoin
mining
.

According

to
Global
Petrol
Prices,
electricity
in
Kazakhstan

costs

on
average
just
$0.055
per
kWh
for
businesses,
a
fraction
of
the
$0.12
per
kWh
paid
by
U.S.
businesses.

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