Miners in Kazakhstan write to the president to ask for lower energy prices.
Miners in Kazakhstan wrote to the president to ask for lower energy prices.In an open letter to President Kassym-Jomart Tokayev, digital asset miners in Kazakhstan request lower energy costs.Eight significant mining companies signed the letter,...
Miners in Kazakhstan wrote to the president to ask for lower energy prices.
In an open letter to President Kassym-Jomart Tokayev, digital asset miners in Kazakhstan request lower energy costs.
Eight significant mining companies signed the letter, according to reports from local media sources, as more miners reportedly decided to halt their operations there.
Representatives from the following companies signed the letter: BCD Company LLP, TT TECH Limited Private Limited Company, KZ Systems LLP, AI Solutions LLP, Zhambyl branch of Kinur LLC, and Green Power Solution Ltd. Private Limited Company, VerCom LLP, and Kinur INVEST LLP, in response to more widespread requests from the nation's Association of Blockchain and Data Center Industry.
"As of today, all the major players in the sector have ceased operations and intend to do so entirely by the end of the year in the Republic of Kazakhstan.".
The government's new regulation has upset the status quo and dropped the nation to third place in terms of Bitcoin mining hashrate, which has made miners in the country sad.
The country's share of the world's mining volume decreased from 14 percent in 2022 to 4 percent in 2023, according to the letter, which also stated that the mining industry would eventually cease to exist if things continued in this direction.
The letter states, "Without understanding the specifics and economic issues, as well as the cost of digital mining, a differentiated system was introduced in 2023 with a fee rate of up to 26 tenge/kWh, the negative effect of which substantially destroys the industry and does not allow digital miners to optimize their activities to reduce costs.".
The miners urged the President to review the policy because, despite claims to be a crypto-friendly industry, the industry is stagnant because miners can't even make ends meet right now.
Hard cryptocurrency taxes in Kazakhstan
Kazakhstani miners have requested a review of the current tax code and a response from the president regarding their energy-related concerns.
They assert that currently, 80% of the cost of digital assets is spent on just producing electricity, leaving less room for survival in the wake of falling asset prices and an impending halving of Bitcoin.
The country's problems with mining started with the influx of miners after the Chinese ban, which caused the demand for miners to soar from 500 MW to 1,500 MW, placing a strain on energy supplies and leading to high taxes on the industry.
Policy observers hope that the government will meet the miners in the middle to ensure the survival of "dying companies" while the industry remains at a crossroads. ".
In light of ongoing environmental concerns and the effects on the country's electricity supply, virtual asset mining has come under heavy regulatory pressure worldwide.