As a result of unrest among cryptocurrency miners, Kazakhstan’s internet has been cut.
BITCOIN has plummeted after Kazakhstan cut internet access to quell violent anti-government protests, causing crypto miners to lose money.
On Thursday, the coveted cryptocurrency fell below (dollar)42,000, down from a high of (dollar)69,000 in early November last year, wiping out investors.
Experts believe the drop is linked to Kazakhstan’s decision to cut off its internet supply in order to quell recent violent protests against the government and President Kassym-Jomart Tokayev.
After protests over a recent increase in gas prices turned deadly, Russian “peacekeeping” troops poured into Almaty, the financial capital of Kazakhstan.
Thirteen police officers were killed in total, with three officers suffering from severed heads, according to the Kazakh government.
According to Reuters, a fifth of the cryptocurrency’s network went dark during a recent blackout in Kazakhstan, which is the second-largest Bitcoin mining hub behind the United States, accounting for 18% of total global Bitcoin output power in August last year.
The number of computers required to maintain the network has decreased dramatically as internet access has been disabled.
According to Larry Cermak of The Block, the ban has resulted in a 12% drop in “hashrate,” which is a term used to describe the amount of computing power required to run the Bitcoin network.
According to Infosurhoy, the recent drop is also attributed to the looming news of a rate hike by the US Federal Reserve.
Minutes from a Federal Reserve meeting this week hinted at a possible interest rate hike in the US soon, sending a wide range of assets, including crypto and stocks, plummeting in value.
Complex mathematical calculations are required to put a new Bitcoin into circulation online, which necessitates the use of computers.
Mining is another name for this process, which requires a lot of energy.
Bitcoin mining is fraught with controversy due to the massive amount of fossil fuels required to mine the cryptocurrency and the resulting environmental impact.
Miners fled to Kazakhstan, where fossil fuel energy is abundant and cheap, following a state crackdown on Bitcoin mining.
Kazakstan is currently experiencing civil unrest, which is unfortunate for the miners.
Since January 2, protesters have been involved in violent clashes with security forces across the country.
On January 6, Kazakstan’s President Tokayev reportedly imposed an internet ban.
On Friday morning, the crypto market was a sea of red, with many other popular coins collapsing.
Ethereum, the second most popular cryptocurrency, was down 12%.