Bitcoin miners in Kyrgyzstan have reportedly been cut off by the government for using too much electricity.
Local officials said that just a few dozen miners were consuming more electricity than entire regions of the country. Pointing out that crypto mining enjoys no protection under the law, officials completely cut off power to mining facilities.
Illegal Miners Get No Love
Cryptocurrency has been illegal in Kyrgyzstan since 2014. It is relatively unsafe and illegal to deal in any sort of cryptocurrency in the small country, let alone to mine at such a scale that you consume more power than several cities combined.
The process of mining bitcoins, or any other cryptocurrency for that matter, consumes a great deal of electricity. So much so, in fact, that people have speculated the cost of mining Bitcoin could be the climate itself – although others have refuted such claims.
Alarmist outlooks around Bitcoin energy consumption aside, some regions have encouraged cryptocurrency mining, while others have waffled on the subject. Notably, Canadian miners in Quebec have seen things go back and forth. Erstwhile, in Norway, and other places, utilities have decided that a premium on the cost of electricity, specific to places where miners seem to be clustering, is an appropriate approach.
Other areas, like upstate New York, go back and forth between welcoming and discouraging miners.
Volatility Is The Rule — Even in Crypto Mining
But the feelings of locals and government forces aren’t the only cumulatively chaotic force that crypto miners have to deal with. If all that nonsense weren’t enough, they also depend on the madness of crypto markets to earn a living. If markets go poorly, they have to be prepared to suffer a loss, and carry on.
There are certainly times where it’s more expensive to mine cryptocurrency than you can possibly earn, as a result of the market, difficulty, and competition. With adequate trading strategies as well as strategic mining patterns, miners can outsmart even the worst tides.
When Bitcoin is trading over $10,000 and things are going relatively steadily in the markets, miners can adjust their expectations and their business in accordance.
Of course, the question right now is how long it will take for things to get shifty again. This is crypto, after all, and anything can happen.