Bitcoin miner mining interrupted
Riot police prepare to block protesters in the centre of Almaty, Kazakhstan, on Wednesday. Russia sent paratroopers into Kazakhstan on Thursday Friday AEDT to help put down the countrywide uprising after violence spread across the tightly controlled former Soviet state. Authorities said at least 18 members of the security forces had died, including two found decapitated. More than people were arrested. Russian troops exit a military plane in an airport in Kazakhstan on Thursday. The hashrate at major crypto mining pools — groups of miners in different locations that team up to produce bitcoin — including AntPool and F2Pool was down around 14 per cent on Thursday from its level late on Tuesday, according to data from mining firm BTC.
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- Bitcoin mining is now easier and more profitable as algorithm adjusts after China crackdown
- Kazakhstan unrest takes down a fifth of global bitcoin mining network
- NiceHash Marketplace Hacked, Loses $64 Million in Bitcoins
- Bitcoin tumbles by 8% as Kazakhstan internet shutdown hits cryptocurrency mining operation
- Even Bitcoin is getting hit by the supply chain crisis
- It's better than Tinder!
Bitcoin mining is now easier and more profitable as algorithm adjusts after China crackdown
When Denis Rusinovich set up cryptocurrency mining company Maveric Group in Kazakhstan in , he thought he had hit the jackpot. Next door to China and Russia, the country had everything a Bitcoin miner could ask for: a cold climate, legions of old warehouses and factories where the mining rigs could be installed, and—especially—dirt cheap energy to power the electricity-guzzling process through which cryptocurrency is minted. Less than a year later, the initial buzz is history: Miners are now being confronted with frozen machines, popular unrest, and Russian troops roaming across the country.
And leaving is not an option. Last week, chaos engulfed Kazakhstan as protests in the south of the country over a spike in fuel prices resulted in police repression, the removal of former president Nursultan Nazarbayev from his role as head of the security council, and an internet shutdown.
Russian-led troops acting under the orders of the CSTO, a military alliance of post-Soviet states, were deployed to the country. For many miners, that was just the latest in a series of unfortunate circumstances that had dogged their operations for months. Those tempted to relocate to the country for its low energy prices had found that its aging power grid was not prepared to handle the sudden influx of miners, which caused a spike in the consumption of energy.
Grappling with blackouts and power cuts, in October the government announced it would start rationing power supply to registered miners and unplug them if the grid came under any stress. This means that, at best, cryptocurrency mining farms stop working during peak hours, when the general population turns on the heating due to the inclement winter. Hopefully when the winter season ends in March, we will be alright. To guard that frozen stock during the protests, many miners decided to spend money on extra security, says Alan Dorjiyev, president of Kazakhstan's National Association of Blockchain and Data Centers Industry.
That, he says, was despite the fact that most mining farms are located in the energy-rich north of the country, far from the turmoil. So why are they still there? The answer is, brutally, that they are stuck.
All the other major countries that have cryptocurrency mining infrastructure—including Russia, Canada, and the US— are grappling with an acute shortage of adequate facilities. Sam Doctor, head of research at digital asset brokerage and research company BitOoda, says the average waiting times to set up a new mining facility from scratch have skyrocketed to 24 months amid increasing demand and a cryptocurrency price rally.
Even if that were taken care of, Kazakh miners—especially those previously based in China—will need to buy different types of energy transformers in order to be able to operate in the US, and waiting times for transformers are now around six to 12 months, Doctor says. Even if they do manage to move, miners worry that it might not be worth it. Bekbauov says that shipping mining rigs to the US from Kazakhstan, for example, would take over two weeks, and the journey might actually end up damaging the devices.
Russia is a more affordable option, but Bekbauov says it suffers from the same shortage of mining infrastructure as the US. Rusinovich, similarly, has no plans to move his machines just yet, worried that, due to the current political tensions, traveling across and out of the country would become much more challenging. Extra checks can cause even more costly delays to those determined to leave. That is not to say that nothing will change. Mining company Bitfufu packed up in December , and Dorjiyev claims that another three companies followed suit but did not name them.
But an exodus this is not. That would be quite a dramatic reversal of fortune for a country that just a couple of months ago was in the top three of global crypto mining powers. And some people, in fact, remain optimistic that this has just been a rough patch for Kazakhstan. The real impact is going to be felt in the long run.
But there is also a possibility that those machines will just remain there, quietly humming till the end of their life cycle, never to be replaced once they have stopped functioning. Gian M. Volpicelli is a senior writer at WIRED, where he covers cryptocurrency, decentralization, politics, and technology regulation.
He lives in London. Senior Writer Twitter. Topics cryptocurrency bitcoin politics.
Kazakhstan unrest takes down a fifth of global bitcoin mining network
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NiceHash Marketplace Hacked, Loses $64 Million in Bitcoins
As of Friday morning, Bitcoin prices have dropped to their lowest in months. This comes after the public was made aware of comments from the US Federal Reserve regarding the possibility of raising interest rates. The recent swings in cryptocurrencies are happening during a volatile period for financial markets. Spiking inflation has resulted in central banks tightening monetary policy, threatening to reduce the liquidity tailwind that lifted a wide range of assets. Due to crypto-currency's global and decentralized nature, pinpointing a rise or decline in the price of Bitcoin to one event is difficult. On that note, experts say the political unrest in Kazakhstan also caused the drop in value. Many are pointing to the release of the Federal Reserve's December meeting notes.
Bitcoin tumbles by 8% as Kazakhstan internet shutdown hits cryptocurrency mining operation
Unrest in the central Asian country — the second-largest centre for mining of the cryptocurrency — led to an internet blackout. Bitcoin took a hit on Thursday after the internet in Kazakhstan was shut down amid intensifying violence. The central Asian nation in recent days has been rocked by violent clashes between protesters, police and the army. The protests began in the west of the country over the weekend, after a sharp rise in fuel prices, and quickly spread through cities across the nation.
Even Bitcoin is getting hit by the supply chain crisis
Slovenia-based cryptocurrency-mining marketplace NiceHash confirmed that its website was breached and payment system compromised, with the contents stored in its Bitcoin wallet stolen. NiceHash posted a statement on its website addressing the incident. We are currently investigating the nature of the incident and, as a result, we are stopping all operations for the next 24 hours. NiceHash allows users to buy and sell hashing power needed to mine cryptocurrency, which members can store in external or local BitGo wallets. This presents opportunities for miners, poolers, and investors alike, given cryptocurrency's increasing adoption among businesses and public organizations.
It's better than Tinder!
Since the introduction of Bitcoin in and cryptocurrencies in general, the use of digital currencies has continued to grow. Commercial deployment of specialized mining servers and introduction of mining farms followed shortly after. The insurance industry normally relies on historical actuarial data that details frequency and severity of loss. The rapidly changing nature of crypto mining technology makes actuarial data unreliable. Therefore, while Bitcoin and other cryptocurrencies have been mined for over 10 years, a large portion of the insurance industry is still not comfortable underwriting this type of risk. Old Mutual went on to say that even doing a comprehensive inventory of the insured equipment is difficult, because the value of the highly modified computer equipment is typically inflated and almost impossible to verify as it is usually imported from obscure suppliers in the Far East. However, crypto mining equipment would readily fall under the description or definition of computer hardware or datacenter server equipment, terms that insurance carriers have experience with.
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In the hype of bitcoin and cryptocurrency was high, and so were the profits to be made if you knew what you were doing. Millionaires were made. But in views changed when the market crash showed that cryptocurrency was just as fallible as real coins. Only the die-hard fans stuck with the currency and the persistent few hackers who still saw the opportunity to use the currency for ransom attacks.
Bitcoin Stack Exchange is a question and answer site for Bitcoin crypto-currency enthusiasts. It only takes a minute to sign up. Connect and share knowledge within a single location that is structured and easy to search. Would it become more difficult for the rest of miners to mine? Would transactions take longer than usual? The next time the difficulty is adjusted up to blocks later , the difficulty would be reduced such that blocks again take about 10 minutes to confirm depending on the new speed of the network as a whole. The last time the difficulty was 10x less than it is now was around October
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