Internet suspension in Kazakhstan, the world’s second largest bitcoin mining center, sends crypto down by almost 6%.
The global computing power of the bitcoin network dropped drastically due to the suspension of the Internet in Kazakhstan during the deadly revolt that the country is experiencing, affecting the cryptocurrency mining industry, and essentially the digital asset, which is currently registering a 6% drop.
Kazakhstan last year became the world’s second largest bitcoin mining center after the United States, according to the Cambridge Centre for Alternative Finance, after the main center, China, cracked down on cryptocurrency mining activity.
Russia sent paratroopers to Kazakhstan in these hours to help quell the nationwide revolt affecting the former Soviet state. Police said they killed dozens of protesters in the main city of Almaty, while state television said 13 members of the security forces perished.
The day before, the Internet was cut off across the country as a result of the revolt, in what monitoring site Netblocks called “a nationwide Internet blackout.” The move is likely to have prevented Kazakh miners from accessing the bitcoin network.
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Bitcoin and other cryptocurrencies are created or “mined” by high-powered computers, usually in data centers in different parts of the world, competing to solve complex mathematical puzzles in an energy-intensive process.
As of August last year, the most recent data available, Kazakhstan accounted for 18% of the global “hashrate,” the term used in cryptocurrency jargon to refer to the amount of computing power used by computers connected to the bitcoin network.
In April, before China’s latest crackdown on bitcoin mining, the figure was just 8%.
Bitcoin was falling below $43,000 this afternoon, touching multi-month lows, posting a nearly 6% drop according to Investing.com at a time when investor appetite for riskier assets declined after Federal Reserve minutes indicated its policymakers are leaning toward more aggressive policy action.