Kazakhstan has been in the crypto news a lot lately. On the surface, we know that it’s a Central-Asian nation with cheap electricity that became the world’s second-largest center for cryptocurrency mining after China’s crackdown on crypto.
Kazakhstan experienced violent clashes between protesters, police, and soldiers, which resulted in an internet blackout that caused difficulties to normal crypto mining operations. The crypto community feared it would have a drastic impact on global crypto markets.
But what’s going on behind the scenes? What exactly is the cause of this crisis? What are its likely outcomes? And what are the prospects for crypto in that country? Find out here.
Kazakhstan is an ex-Soviet country the size of Western Europe with considerable mineral resources and economic potential.
Its varied terrain ranges from the mountainous, densely populated regions of the east to the thinly populated, natural resource-rich plains of the west, and from the industrialized north, with its Siberian climate and landscape, to the dry steppes of the center, to the fertile south.
Kazakhstan comprises an area of 2.7 million sq km and has one of the lowest population densities in the world with 19.1 million people.
Kazakhs dominate the country in terms of ethnicity, with Russians making up just over a quarter of the population and smaller minorities making up the rest.
Islam is experiencing a revival in Kazakhstan after being suppressed under Soviet rule when about 2 million Russians immigrated there during the campaign to develop virgin territories.
Since the collapse of the Soviet Union in 1991, oil sector investment has been the driving force behind the country’s rapid economic growth.
Kasachstan war eng héich fortgeschratt Autokratie ënner hirem fréiere President Nursultan Nazarbayev fir dräi Joerzéngte nodeems hien Onofhängegkeet vun der Sowjetunioun gewonnen huet.
Den Nazarbayev huet de Kassym-Jomart Tokayev als säin Nofolger am Joer 2019 ernannt. Hien huet e kontrolléierten Transfert vun der Muecht ëmgesat an huet d'Kontroll iwwer de Sécherheetsrot behalen, bis Protester iwwer Brennstoffpräisser, déi den 2. Zesummebroch vun der Sowjetunioun.
Den Tokayev huet de Premier Minister an aner Regierungsbeamten entlooss als Äntwert op d'Opschwong an huet d'Gassubventiounen erëm agefouert.
An enger schockéierter Beweegung huet de President och säi Virgänger Nursultan Nazarbayev vu senger Positioun als President vum nationale Sécherheetsrot entlooss, deen him Autoritéit iwwer d'strategesch Politik vum Land ginn huet, souwéi d'Recht fir déi meescht vun den Tokayev Entscheedungen ze veto.
The protests, however, continued unabated. Therefore, Tokayev appealed for help from the Collective Security Treaty Organization (CSTO), a Russia-led security alliance.
A contingent of 2,500 peacekeeping soldiers arrived in the country within hours. It was the organization’s first mission since its creation in 2002.
D'Kasachstan Autoritéiten hunn auslännesch Journalisten verbueden an d'Land anzegoen wärend den Onrouen an hunn eng landswäit Internet-Blackout ëmgesat, déi den Informatiounsfloss no baussecht behënnert huet.
During the clashes, more than 160 people were reported dead, including law enforcement officers. A crackdown on the riots led to the arrest of almost 10,000 people, the Financial Times confirméiert, citing official sources.
Tokayev’s narrative on January 7 appeared to be that terrorist gangs exploited the unrest with an apparent intent to seize power with the help of foreign support, and that CSTO troops only defended critical infrastructure, without intervening to supress the uprising.
Since the unrest was quelled, all CSTO troops have left Kazakhstan, Russian ambassador to Kazakhstan Aleksei Borodavkin gesot Januar 19.
An engem Versuch, Onzefriddenheet ze erliichteren, huet de President Tokayev d'Erhéijung vum Gaspräis ëmgedréit an d'ganz Regierung entlooss. Firwat huet dat dann net gehollef den Onrou ze stoppen? Ee vun de Grënn ass, datt Leit am Kasachstan sinn héich onzefridden mat wéi Räichtum an hirem Ressource-räich Land verdeelt ass.
What can appease an angry mob? Probably nothing. As soon as dissent morphs into something like that, you are generally powerless. So there wasn’t much Tokayev could do to make people feel happy and go home. They wanted a total change to the regime.
Kasachstan huet e puer vun de weltgréissten Uelegreserven an ass de weltgréissten Uraniumproduzent. Wéi och ëmmer, de Räichtum vun der Natioun ass limitéiert op eng Elitegrupp, déi mat der Famill vum President assoziéiert ass, an déi meescht Kasachen profitéieren net vun der Ausbeutung vun der natierlecher Ressource.
D'Schreiwen war wahrscheinlech op der Mauer fir Tokayev. Zréck am Joer 2019 hunn Masseprotester den Nazarbayev erof bruecht, sou datt dës Protester deeselwechten Effekt hätten. Fir dëst ze vermeiden huet hien déi grouss Hënn (CSTO) erabruecht. Fir de Moment schéngt et datt de President Tokayev de gréisste Gewënner vun der aktueller Kris ass.
Moreover, insiders say tensions were growing between the two leaders’ offices. Over time, Tokayev’s power and control over the national bureaucracy grew. Since the beginning of the COVID pandemic, Nazarbayev has rarely appeared in public, and was visibly fatigued. The current protests have given Tokayev a chance to undermine the basis of the dual power system.
Als Wee fir sech vum Nazarbayev ze distanzéieren, huet den Tokayev gesot datt d'Onzefriddenheet mat der Akommesongläichheet tëscht de Leit gerechtfäerdegt wier an datt d'Mataarbechter vum Nazarbayev hire Räichtum sollten deelen. De President huet iwwer Initiativen geschwat fir de Räichtum ze reduzéieren an Onregelméissegkeeten an de staatleche Beschaffungen a Geschäftsbezéiungen mat Nazarbayev Associatiounen ze eliminéieren.
Laut enger anerer Vue war et Nazarbaev, deen d'Onrouen orchestréiert huet fir den Tokayev ëmzebréngen an d'Présidence senger Duechter ze iwwerginn.
Akezhan Kazhegeldin, an exiled opposition leader, revealed to Euronews that Nazarbayev’s allies paid radicals to turn peaceful protests violent. “(Their) aim was very simple. They tried to regain power, to get back into office, dismiss Tokayev and call a new election, and probably they believed that some of them were going to be elected,” Kazhegeldin said.
Zënter der Kris ugefaang huet, ass den Nazarbayev aus der Luucht gewiescht, mat Gerüchtermühle gekrasch a Spekulatiounen, datt den enorm räiche Ex-President mat engem groussen Deel vu senger Famill aus dem Land geflücht ass.
Kazakhstan is a major Bitcoin player. After China clamped down on cryptocurrency mining last year, the nation became the second-largest Bitcoin mining hub, according to a Rapport from the Cambridge Centre for Alternative Finance. Kazakhstan contributed 18.1% to the global hash rate as of August 2021.
BTC.com data cited in The Guardian Manifestatioun shows that hashrates for major Bitcoin mining pools declined 14 percent during the protests, emphasizing how important Kazakhstan is to the Bitcoin ecosystem. Bitcoin price plunged too, hitting below $43,000 in one of those days.
Meanwhile, the negative environmental impacts of Bitcoin mining have been a continuous concern in many countries, and Kazakhstan is no exception. More than 70 percent of Kazakhstan’s electricity is produced by burning coal, making it the gréisste emitter of carbon dioxide in Central Asia.
Kazakhstan’s government ugekënnegt last year that it would crack down on unregistered miners whose consumption is estimated to be twice that of registered ones.
For as long as Tokayev remains president, he will likely stick with his previous course of favoring Bitcoin miners and seeking alternative energy sources for them. Thus, the president ugekënnegt plans for a nuclear power plant, a logical decision given that it is the world’s biggest uranium producer.
However, the country has a history of nuclear disasters, so many people are wary of this idea. As a result, the president must strike a balance between satisfying his country’s people so they don’t rebel again, and allowing the booming crypto sector to flourish in Kazakhstan.
De Plang vun der Regierung fir onregistréiert Miningaktivitéit z'erhiewen an d'Reguléierung vum Krypto-Mining-Sektor vum Land ze verbesseren gëtt als e Wee gesi fir méi Stabilitéit a Kloerheet an d'Industrie am Land ze bréngen. Wéi och ëmmer, Bitcoin Miner fäerten datt d'politesch Kris d'Regierung vun der Handlung behalen kann.
Trotz dem Opstand an de gemeinsame Stroumausfall, déi Miner erlieft hunn zënter datt se a Kasachstan ukomm sinn, fäerten d'Miner datt et net wäert wäert sinn d'Land ze verloossen. Fir d'Apparater an d'USA ze bréngen, zum Beispill, wäerte Wochen daueren, a si kënnen tatsächlech während dem Versandprozess beschiedegt ginn.
Also wäerte Krypto-Miningfirmen kucken fir am Kasachstan ze bleiwen, méiglecherweis dozou bäidroen datt d'Land déi erfuerderlech Niveaue vun der Energieproduktioun erreecht. Eng Zuel vun dëse Firmen hunn schonn en Interessi ausgedréckt fir an zukünfteg Energieprojete wéi Wandkraaft a Waasserkraaftstatiounen ze investéieren. Schlussendlech ass et op d'Regierung komm, déi zimmlech interesséiert schéngt fir eng Kryptoindustrie am Kasachstan ze wuessen wann se hir intern politesch Kris regelt.
P.S. This article first appeared at Dailyhodl.
Bildquell: pexels.com
Source: https://blockchain.news/analysis/behind-the-scenes-of-kazakhstans-political-crisis-can-crypto-mining-survive-there