Bitcoin Mining: Kazakhstan Considers A 500% Tax Increase For Crypto Miners 

Considering its abundant natural gas and economic power, Kazakhstan experienced miners leaving in droves. Nonetheless, the miners in Kazakhstan have been encountering problems in the preceding few months due to internet blackouts as well as electricity scarcities. 

Kazakhstan Increasing Fuel Prices 

Kazakhstan witnessed extensive civil disturbances after increasing fuel prices, which brought the administration to disconnect internet and security limitations. 

Gradually, things have slowly retreated to normal, although the Kazakhstani government has drafted rigid regulatory constraints for bitcoin miners in current days, this being a state of affairs that could spark some undertakings to evacuate the nation for civil shores. Because of this, miners are contemplating going for Russia or the US. 

Regional news platform, Kazinform, as at February 4, noted that the Kazakh government is looking into increasing the tax on electricity usage for cryptocurrency miners from about one tenge to nearly five tenges (USD$0.0023 to $0.012). 

Monthly Tax Collection On Equipment 

Awfully, Kazakhstan’s first vice-minister of finance, Marat Sultangaziev, is demanding for crypto miners to pay up a monthly tax on equipment, under conditions of them being able to earn block rewards or even turn the ASICs on. 

The Vice Minister described in relation the idea to a related tax that casino operators engage on their pieces of equipment. 

Kazakhstan’s Minister of Digital Development, Bagdat Musin, had earlier accused the unlicensed gray miners of being responsible for the consumption of about 1 gigawatt of the nation’s electricity. Musin has requested the public to disclose information on unlicensed mining operations. 

The recent rules in Kazakhstan separate the so-called “gray miners” from the so-called “white miners.” White miners are known to have been signed on to a new registry at the Ministry of Digital Development. 

Musin extensively requested that unlisted gray cryptocurrency miners come to terms with the department’s new administration. 

Initially, the government had cut off the cryptocurrency miners from the electricity supply for the major parts of January. Kazakhstan encountered extensive energy scarcities and vast protests over rising fuel costs. 

The government had cut off electricity throughout the nation as the protests lingered, accelerating hash price dwindling for major pools with exposure. 

While access to the Internet has been restored, power stays scarce. However, initial reports show that Kazakh power authorities were only with the intent of barring electricity to miners until the latter part of January, numerous miners in the region notified The Block that they were still waiting: 

Makhat Serikuly, a specialist on mining for BlockchainKZ, notified The Block, “We have restored the internet, but electricity is however restricted. We had an excess, but presently a shortage, so they are shutting off power to miners.” 

Kanat Amren, a Kazakh miner, concurred that the crisis was horrible. “They can’t function without power, and for this period, white miners have gotten their electricity cut off,” explained Amren. 

As China had knocked out the idea of cryptocurrency mining early in 2021, neighboring Kazakhstan, with its inexpensive electricity, welcomed a wave of miners. 

It rapidly came to be the second-biggest origin of Bitcoin’s hash rate, just after the US and before Russia. 

Nonetheless, with the circumstance in Kazakhstan growing less specific, miners are quickly seeking to move to Russia or the US as regional miners according to The Block. 

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