September 24, 2022

Finance & Economy

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Kazakhstan made $1.5M From Bitcoin Mining

According to a government study, crypto mining businesses paid the Kazakhstani government $1.5 million in fees.

Crypto mining is proven to be a vital lifeline for Kazakhstan.

Bitcoin mining income came from 12 different areas of Kazakhstan, according to a document provided by the State Revenue Committee of Kazakhstan’s Ministry of Finance on Tuesday.

This has brought in a significant amount of money for the government is only the first quarter of this year.

Kazakhstan in support of crypto mining

The Kazakh crypto market opened late in 2019, as the value of Bitcoin dropped. Despite the fact that cryptocurrency is not recognized as legal cash, miners’ companies were pushed.

Kazakhstan’s President Kassym-Jomart Tokayev urged the country to create $1.2 billion in crypto investment over the next five years in his state-of-the-nation speech in 2020.

The crypto industry began to grow in Kazakhstan, owing to low power costs and a lack of regulation.

The price collected in the first three months of this year is based on the actual quantity of electrical energy utilized to carry out mining activities, according to a report by the state revenue panel that breaks down the rates by area.

Kazakhstan’s Earnings

Despite public opposition to a new crypto mining tax policy that went into effect in April, an internet outage, and carbon-intensive energy infrastructure, Kazakhstan’s government continues to benefit from the crypto mining industry.

The government’s revenue fell well short of prior forecasts as a result of the closure of different mining firms around the country.

In March 2017, Aset Nauryzbayev, an economist and former head of KEGOC’s board of directors, told the Rest of the World:

“It was a mistake on the part of the Energy Ministry, which failed to anticipate issues in the power engineering industry and build additional capacity.”

Miners have to pay

Miners are rewarded with new coins for aiding the network’s security, which is a computationally complex and energy-intensive activity.

Miners are required to pay a share of their energy expenditures to the government under the country’s adopted law. 

Miners must pay $0.0024 per kilowatt on the 20th day of the final month of each quarter.

As the SRC pointed out, Parliament is presently debating this cost.

Despite the fact that mining consumes a small percentage of total global energy, Kazakhstan has a disproportionately big part of the mining sector.

Despite having a population of only 19 million people, the nation accounts for 13.3 percent of the worldwide hash rate, making it the world’s third-largest Bitcoin mining hotspot.

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Nancy J. Allen
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Kazakhstan made $1.5M From Bitcoin Mining