Kazakhstan shutdown deals blow to global

kazakhstan shutdown deals blow to global

The Guardian noted: “Within the hours of the outage, Bitcoin’s computational power sank,” while Forbes commented “a full 12% of Bitcoin’s worldwide computational power had vanished [with] sharp declines for a number of producers with operations in Kazakhstan.”[3]

I continue to scan the headlines, thinking about the promise and perils of writing history that informs the present moment. My aim with Leonardo to the Internet is a long history with a tight focus on technologies that led to changes in society, politics, and culture. A new chapter in the third edition examines the global battle for democratic and authoritarian internets, including the internet shutdown in Egypt during the “Arab Spring” protests.

Kazakhstan internet shutdown deals blow to global bitcoin mining operation

The government briefly switched on the internet during speeches by Nazarbayev’s successor as president, Kassym-Jomart Tokayev, embroiled in a fight to retain his power, including an unusual request for Russian military assistance.

You might think this week-long internet shutdown could not have measurable global repercussions. But it roiled the global markets for cryptocurrency such as Bitcoin.

Kazakhstan recently became the world’s second largest “miner” of cryptocurrency, involving huge computers and massive electricity supplies. During the middle of 2021, China effectively banned all forms of cryptocurrency and so many of its crypto-miners moved shop to Kazakhstan.

Its national share of global cryptocurrency mining muscle, or hash rate, fully doubled to 18 percent. When this impressive share was taken down during the January internet blackout, it caused quite a stir.

Kazakhstan shutdown deals blow to global

When preparing to attack Ukraine, Putin obviously did not take into account that people on both sides of the war would soon find it hard to buy bananas. However, as the United States and European Union have implemented a series of economic sanctions against Russia due to its actions in Ukraine, Ecuador, one of the world’s top banana producers, has also suffered.

Historically, both Russia and Ukraine have relied on Ecuador as their main source of bananas.
Data show that Ecuador exported 6.8 million tons of bananas in 2021, of which 1.51 million tons (22%) were sold to Russia. In 2019, the total value of Ecuador’s banana exports was $3.43 billion, of which Russia accounted for $649 million (18.9%).

In contrast, the United States accounted for only $484 million (14.1%) of these exports.

In addition, according to a report by the Ukrainian Horticultural Association, the import volume of bananas into Ukraine reached a record high of 270,000–275,000 tons in 2019, an increase of 8–9% over 2018, corresponding to a per capita banana consumption exceeding 6 kilograms. At the same time, the total import value of bananas entering Ukraine has exceeded that of apples in recent years.
The horticultural business news platform EastFruit previously quoted Kateryna Zvereva, development director of the Ukrainian Horticultural Association, as attributing this to several factors, including bananas now being considered a staple product rather than an exotic fruit among Ukrainian consumers.

However, only three years later, banana exports to Ukraine and Russia are struggling.

mining (countable and uncountable, pluralminings)

  1. The activity of removing solid valuables from the earth. gold mining

  2. (figuratively) Any activity that extracts or undermines. His extensive mining for apparently statistically significant results made any of his results questionable.
    • 1740, John Hawkesworth, The Works of Jonathan Swift, D.D, Dean of St.

      Patrick’s, Dublin, Life of the Reverend Jonathan Swift [Introduction][…] the fabrick, however weak by the delicacy of its composition, would not have fallen so soon, if the foundation had not been injured by the slow minings of regret and vexation.

  3. (military) The activity of placing mines (the explosive devices).
  4. (cryptocurrencies) Creation of new units of cryptocurrency by validating transactions and demonstrating proof of work.

At present, although there is still demand for bananas in the Russian and Ukrainian fruit markets, this market demand is proving difficult to meet owing to the reluctance of transportation companies to service war-torn areas. It is reported that it has not even been possible to unload many goods already shipped to Russia and Ukraine as a result of the conflict.

These problems in Russia and Ukraine have had a knock-on effect on Ecuador’s banana industry, which is heavily reliant on exports.
According to Ecuadorian media reports, banana farmers in the provinces of Guayas, Los Rios and El Oro recently put a large quantity of bananas on the streets and asked the government to allocate special funds to buy the backlog. Local banana farmers complained that not only has the export volume of bananas decreased sharply, but also the price has plummeted.

How did that happen?

In 1949, the Soviets exploded their first atomic bomb in northeast Kazakhstan, and across the next 40 years hundreds of tests at Semipalatinsk exposed an estimated 1.5 million people to both acute and chronic doses of radiation.[1] Variable winds over the Semipalatinsk Test Site, nearly the size of New Jersey, sent radioactive fallout from some open-air tests over to Russia but most fallout stayed in Kazakhstan. The Soviets began uranium mining in other parts of the country in the 1950s and expanded operations in the 1970s.

Today Kazakhstan is the world’s largest source of uranium, according to the World Nuclear Association, shipping 43 percent of the global supply in 2019.[2] The January unrest consequently shook the global price of uranium, leading to a one-week price increase of 24 percent.

Kazakhstan is home to many coal mines and plants and was the world’s ninth-largest coal producer in 2019, according to the International Energy Agency.

Bitcoin and other cryptocurrencies are created or ‘mined’ by high-powered computers, which require large amounts of energy to make a new coin.

But the recent internet shutdown amid national protests in Kazakhstan, spurred by surging fuel prices, has provided a blow to crypto miners and caused a sudden drop in the computing power of the bitcoin network.

An estimated 18pc of all bitcoin mining was taking place in Kazakhstan in August 2021, according to the Cambridge Centre for Alternative Finance’s Bitcoin Electricity Consumption Index.

Bitcoin’s environmental impact has been a cause for concern due to the amount of power cryptocurrency mining uses around the world.

“25 years of Independence” reads the blue banner in Republic Square, Almaty, Kazakhstan, New Year’s Eve 2017. Photo by author.

By Thomas J. Misa

New Year’s 2017 in Almaty, Kazakhstan, it was the greatest display of fireworks imaginable.
Everyone in the city seemed to be on the immense Republic Square filled with government buildings and ringed by broad terraces. The Town Hall was radiant. The crowd strolled and mingled, watching the show and listening to blaring music. Near to midnight Nursultan Nazarbayev, the country’s Soviet-era leader and president since independence in 1991, delivered a short patriotic address over the loudspeakers. It was a scene designed to inspire optimism in the future and trust in the state.

It turns out that week’s cryptocurrency slump also had an essential link to Kazakhstan. We need additional history. Internet restrictions, including filtering, censorship, and shutdowns have become an item in the playbook of authoritarian states, such as China and Russia.

Kazakhstan throttled or shut down social media during national political protests in 2018, 2019, and 2021. The country has just five connections to the global internet and so it was easy on 4-5 January 2022 to direct these providers to shut down the country’s internet.

External news about politics ended, but so too did the functioning of cell phones, credit cards, ATMs, and even many TVs. Since three-quarters of citizens have internet access, by far the highest in central Asia, the pinch was widely felt.

According to Ecuadorian officials responsible for coordinating banana exports, prior to the Russia–Ukraine conflict, Ecuador was exporting approximately 1.8 million boxes of bananas to Russia and 180,000 boxes to Ukraine every week. Within a week after the outbreak of the conflict, 400,000 boxes of bananas were stranded.

At the beginning of March, approximately 765,000 boxes of bananas were at risk of not being transported, not because of sanctions, but because the devaluation of the Russian ruble meant that buyers could no longer pay the price of these bananas. Furthermore, the conflict has seriously interfered with cold chain logistics in the region, and Russia, as a major import and export market, will be greatly affected.

The extent of BitCoin mining in Kazakhstan has been revealed by the country’s crisis. Pictured is a crypto mining rig.

The Guardian/Reuters: Kazakhstan internet shutdown deals blow to global bitcoin mining operation

Unrest in the central Asian country – the second-largest centre for mining of the cryptocurrency – led to an internet blackout.

The global computing power of the bitcoin network has dropped sharply as the shutdown this week of Kazakhstan’s internet during a deadly uprising hit the country’s fast-growing cryptocurrency mining industry.

Kazakhstan became last year the world’s second-largest centre for bitcoin mining after the United States, according to the Cambridge Centre for Alternative Finance, after China clamped down on crypto mining activity.


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