{"id":210508,"date":"2022-01-06T20:00:07","date_gmt":"2022-01-06T20:00:07","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=210508"},"modified":"2022-01-06T15:56:45","modified_gmt":"2022-01-06T15:56:45","slug":"how-could-the-instability-in-developing-countries-alter-the-bitcoin-mining-landscape","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/how-could-the-instability-in-developing-countries-alter-the-bitcoin-mining-landscape\/","title":{"rendered":"How could the instability in developing countries alter the Bitcoin mining landscape?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Following the news about nationwide protests in Kazakhstan <\/span><a href=\"https:\/\/cryptoslate.com\/fuel-price-protests-escalate-in-kazakhstan-causing-internet-blackout-for-its-bitcoin-miners\/\"><span style=\"font-weight: 400;\">causing<\/span><\/a><span style=\"font-weight: 400;\"> an internet blackout in the <\/span><a href=\"https:\/\/cryptoslate.com\/\"><span style=\"font-weight: 400;\">Bitcoin<\/span><\/a><span style=\"font-weight: 400;\"> mining country that resulted in a significant hash rate drop, <\/span><i><span style=\"font-weight: 400;\">CryptoSlate<\/span><\/i><span style=\"font-weight: 400;\"> talked to Alan Konevsky, Chief Legal Officer at <\/span><a href=\"https:\/\/primeblock.com\/\"><span style=\"font-weight: 400;\">PrimeBlock<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">PrimeBlock is a digital asset mining and infrastructure provider, currently operating roughly 1,000 PH\/s in hashing capacity, equivalent to around 0.6% of the total global Bitcoin hash rate\u2013with mining facilities spread across the United States and Canada.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Konevsky commented on recent developments in Kazakhstan and Kosovo, and shed some light on their impact on the industry, from an insider perspective.<\/span><\/p>\n<h2><strong>Developing countries struggling to keep up<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">Crypto mining aside, developing countries like Kazakhstan and Kosovo have limited electrical grids\u2013not able to handle high demand.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cPower generation and distribution infrastructure is often a weak point,\u201d Konevsky said, pointing to the bottleneck for developing countries struggling to keep up with technological advances.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cPolitical instability feeds into\u2013and flows from\u2013such struggles and exacerbated their impact and duration,\u201d he explained.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At the end of last year, Central Asia\u2013from western Kazakhstan to southern Tajikistan\u2013<\/span><a href=\"https:\/\/www.rferl.org\/a\/central-asia-severe-electricity-shortages\/31564293.html\"><span style=\"font-weight: 400;\">suffered<\/span><\/a><span style=\"font-weight: 400;\"> from power and energy shortages after being hit by a severe drought, limiting the hydroelectricity production and, as a result\u2013Bitcoin mining.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In November, the Kazakhstan Electricity Grid Operating Company (KEGOC) explained that the problems were caused by malfunctions, but also from the system overuse\u2013which the government <\/span><a href=\"https:\/\/rus.azattyq.org\/a\/electricity-deficit-in-kazakhstan\/31555928.html\"><span style=\"font-weight: 400;\">attributed<\/span><\/a><span style=\"font-weight: 400;\"> to crypto miners who <\/span><a href=\"https:\/\/cryptoslate.com\/how-the-u-s-became-the-worlds-biggest-bitcoin-mining-hub\/\"><span style=\"font-weight: 400;\">flocked<\/span><\/a><span style=\"font-weight: 400;\"> to Kazakhstan from China.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cSomewhat similarly, Kosovo's biggest coal-fired power plant was recently shut down over a technical issue, so they were forced to import electricity, which is already on an upward price trend,\u201d commented Konevsky.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Facing the worst energy crisis in a decade due to production outages, the Kosovo government recently <\/span><a href=\"https:\/\/www.bbc.com\/news\/world-europe-59879760\"><span style=\"font-weight: 400;\">issued<\/span><\/a><span style=\"font-weight: 400;\"> a blanket ban on crypto mining\u2013in a bid to curb electricity consumption.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cIn the grand scheme of things, these countries' decisions to limit mining aren't so much a reflection of their feelings on blockchain and cryptocurrencies as on their status as developing countries with developing infrastructure,\u201d noted Konevsky, adding that \u201cit\u2019s challenging enough for them to provide fundamental needs and support economic growth.\u201d<\/span><\/p>\n<h2><strong>What does this mean for the North American miners?<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">According to Konevsky, Bitcoin miners in North America are indirectly impacted by these decisions in several ways\u2013some being quite positive.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cFirst, less hash power in the network means more room for miners in North America to increase their share of the network,\u201d he started explaining.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cSecond, mining companies, including those that relocated after the China regulatory changes, set up in countries like Kazakhstan and Kosovo because the cost of electricity is much cheaper than in North America. If mining becomes a complete non-starter in these countries, we could see miners re-locate instead of shutting operations, negating the loss of hash power,\u201d he added.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThird, the decisions made by these countries could set a precedent for other countries to follow. If other developing countries decide to limit or ban bitcoin mining, it could alter the bitcoin mining landscape as a whole,\u201d Konevsky concluded.\u00a0<\/span><\/p>\n<h2><strong>The future of competition\u00a0<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">\u201cThis industry is mobile, to a point\u201d\u2013noted Konevsky, commenting that, as the Bitcoin mining industry matures, a stable political climate and stable inputs will play a decisive role.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Similar to other developing industries, \u201cas companies seek scale in face of equipment and energy sourcing hurdles and deal with asset price moves and other market challenges\u201d\u2013horizontal and vertical consolidation is to be expected.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As he explained, \u201cgoing public is a great way for crypto firms to raise money, gain more legitimacy, and even get access to new markets through increased financial firepower.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cLarge mining companies have the resources and scale to weather the ups and downs of the market,\u201d explained Konevsky, due to their ability to afford new equipment when prices are high and to rent or purchase space in data centers.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cSmaller miners, on the other hand, may not be able to survive if the price of Bitcoin falls too low or if they can't compete with the large mining companies,\u201d he noted, adding that, in the long run\u2013\u201d there will always be competition among miners.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although he couldn\u2019t disclose specific details about the company\u2019s plans for 2022, Konevsky assured that PrimeBlock is well-positioned to face the challenges of the market.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The company\u2019s strategy is to focus on locations that have a surplus of electricity and favorable space, cost, and regulatory parameters, he explained.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cWe have the latest mining equipment, the best partnerships, a scalable and nimble strategy not premised on long-dated development projects, and a team of experienced professionals,\u201d he concluded, adding that PrimeBlock is well-equipped to face the challenges of a developing country landscape.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Following the news about nationwide protests in Kazakhstan causing an internet blackout in the Bitcoin mining country that resulted in a significant hash rate drop, CryptoSlate talked to Alan Konevsky, Chief Legal Officer at PrimeBlock. PrimeBlock is a digital asset mining and infrastructure provider, currently operating roughly 1,000 PH\/s in hashing capacity, equivalent to around [&hellip;]<\/p>\n","protected":false},"author":699,"featured_media":210538,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2376],"tags":[76769],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How could the instability in developing countries alter the Bitcoin mining landscape?<\/title>\n<meta name=\"description\" content=\"Following the news about nationwide protests in Kazakhstan that led to a significant Bitcoin hash rate drop, CryptoSlate talked to PrimeBlock.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/how-could-the-instability-in-developing-countries-alter-the-bitcoin-mining-landscape\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How could the instability in developing countries alter the Bitcoin mining landscape?\" \/>\n<meta property=\"og:description\" content=\"Following the news about nationwide protests in Kazakhstan that led to a significant Bitcoin hash rate drop, CryptoSlate talked to PrimeBlock.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/how-could-the-instability-in-developing-countries-alter-the-bitcoin-mining-landscape\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2022-01-06T20:00:07+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-01-06T15:56:45+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/01\/bitcoin-mining-instability.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Ana Grabundzija\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Ana Grabundzija\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/how-could-the-instability-in-developing-countries-alter-the-bitcoin-mining-landscape\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/how-could-the-instability-in-developing-countries-alter-the-bitcoin-mining-landscape\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/ana-grabundzija\/#person\",\"name\":\"Ana Grabundzija\",\"url\":\"https:\/\/cryptoslate.com\/author\/ana-grabundzija\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/ana-grabundzija\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/ana-grabundzija\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2021\/05\/cs-author-ana-300x300.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2021\/05\/cs-author-ana-300x300.jpg\",\"caption\":\"Ana Grabundzija\"},\"jobTitle\":\"Journalist\",\"description\":\"Dr. Ana Grabundzija is a Zagreb-bred writer with an academic background in anthropology. 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