In a notable turn of events, crypto miners in Kazakhstan are calling on their President, Kassym-Jomart Tokayev, to intervene on energy prices, stating that high costs are pushing them towards extinction. As it now stands, miners claim their operations may cease by the end of this year. Ironically, this outcry arises in the third-largest market globally for Bitcoin mining hash rate.
Eight prominent cryptocurrency mining operators, including BCD Company, TT TECH Limited, and KZ Systems, have joined the chorus pleading for the leader’s intervention. Through an open letter, these operators expressed the distress that the high energy prices inflicts on the industry.
Kazakhstan raised taxes on energy for crypto miners, thus increasing the financial strain these businesses already experience due to the volatile nature of cryptocurrencies. These growing costs, the miners contend, are counterproductive to government’s proactive regulatory approach to crypto mining.
Indeed, because of these newly imposed taxes, Kazakhstan has fallen behind crypto mining leaders such as United States, Russia, and China. With the cost of taxed electricity now at about $0.067 per kWh, these miners are even considering shutting down their operations. To provide a comparison, before any taxation, the cost per kWh in the United States stands at an average of $0.12.
Interesting point to consider – the inception of the tax came from mounting national frustration over crypto miners exploiting the national power grid. Despite the outcry from the miners, government data reveals that miners contributed a figure of roughly $7 million (3.07 billion tenges) in tax payments in 2022.
While crypto enthusiasts might view the situation as stifling, there’s another perspective to consider: the miners’ fair contribution to the national grid that they significantly strain. The resulting question then is – should promoting an industry come at the expense of national resources?
This situation draws attention to a larger issue in the crypto industry: the balance of promoting growth and ensuring that the industry does its part in contributing to national development. While Kazakhstan’s situation is a unique case, it rings a bell on similar issues that might arise in other nations.
In conclusion, the scenario in Kazakhstan provides a fascinating insight into the complex dynamics between government regulation, national resources, and the emerging technology sector. Can a resolution be reached that promotes growth and ensures necessary contributions? Time will tell. Should such a balance be struck, it could serve as a blueprint for other nations facing similar predicaments.
Source: Cointelegraph
