Kazakhstan’s Government Invests $700 Million In Bitcoin Mining

On the 2nd of September, the newly appointed Kazakh minister of digital development, Bagdat Mussin, confirmed that his government was going to invest a high amount of money in Bitcoin mining. His predecessor Askar Zhumagaliyev had already addressed his country’s ambitious $700 Million project. On the day he was sworn in, Mussin told Reuters:

“More than 80 billion tenge ($190 million) has been invested in the sector, today we have preliminary agreements on attracting investments worth 300 billion tenge.”

He also added that his country already has 13 active mining farms, with another 4 farms being under construction. Thanks to large coal and oil reserves, Kazakhstan has relatively chap energy costs, giving it a competitive edge in the global hashrate market.

Countries eating at China’s hashrate dominance

According to a study by the Cambridge Center of Alternative Finance from April 2020, China dominates around 2/3 of the global hash rate. With a bit over 6%, Kazakhstan lands on the fourth place behind China, the US, and Russia. After the announced investments, Kazakhstan stands to overtake the US and Russia.

Global hashrate by country in April 2020
Global hashrate in April 2020 / Source: Cambridge Centre of Alternative Finance

Another country recently making the news when it comes to mining Bitcoin is Iran. It was announced in May that around $7.3 Million were invested in mining farms in the country. Iran has an interest in mining Bitcoin to circumvent US sanctions, while also profiting from its large oil reserves. Instead of directly selling the oil, Iran now sells its “bitcoinized” oil reserves. It’s doubtful that Greta Thunberg will ever become a Bitcoin hodler looking at the current situation.

A Princeton University study from Oktober 2018 estimated China’s hashrate dominance to be at 74%. In the 2 years that followed, the Middle Kingdom had to cede 10% of its dominance to competitors.

What about the full nodes leader Germany?

Green energy policies aren’t necessarily cheap. In many European countries, among which Germany, energy costs are so high that mining Bitcoin barely turns a profit anymore. Germans wanting to participate in the consensus mechanism end up at a net loss. The situation doesn’t seem to be changing any time soon. The fact that Germany still appears in the top rankings of the diagram shown above, is mainly due to hobby miners, or miners with access to their own cheap energy sources. But when it comes to the number of full nodes, Germany remains the world’s number 1!

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