Immense energy consumption in the Central Asian nation of Kazakhstan has been attributed to cryptocurrency mining operations, especially in massive computer farms. Kazakhstan is now experiencing power shortages with cryptocurrency winning partly to blame.

According to reports the local Kazak electrical grid operator Kazakhstan Electricity Grid Operating Company (KEGOC) said that they will start rationing electricity for the country’s 50 registered miners after their usage reportedly involved an emergency shutdown mode at three power plants back in October. To deal with the shortages, Kazakhstan had to import electricity from neighboring Russia at a higher tariff.

According to the local government estimates demand for electricity has jumped by 8% in 2021 so far, versus the 1-2% typically seen before. It is uncontrolled electricity consumption by illegal mining farms that are the main reason for the current situation.

According to a recent statement by Dyusenbay Turganov, member of the Mazhilis, the lower house of Kazakhstan’s parliament, “New regulatory requirements and criteria for the crypto mining industry must be adopted to streamline its operations while developing a comprehensive ecosystem for digital assets.”

Starting in 2022, Kazakhstan will start making legitimate miners pay up, both to help distinguish registered miners from illegal ones, as well as to help ease power shortages. The country plans on charging legitimate miners 1 Kazakhstan tenge (approx. Rs. 0.17) per kWh.

In May this year, Chinese Vice Premier, Liu He, said that China’s authorities should impose more regulation on the mining market in order to protect the financial system. He said that Beijing should crackdown on bitcoin mining and trading behaviour, and resolutely prevent the transmission of “individual risks to the social field.

According to officials, it has been suggested that the jump in demand for energy could be due to China’s crackdown on cryptocurrency, which forced mining firms to move their operations to other countries such as Kazakhstan where electricity is relatively inexpensive.

Just this week, we reported that Google released a new report stating that malicious cryptocurrency miners were using hacked Google Cloud accounts for mining purposes. In the past, we have also brought you news of illegal massive mining rigs. It seems that crypto mining is here to stay no matter the consequences.