Could Kazakhstan Turmoil Ever Give USA 51% Bitcoin Control?

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Last Updated on 9 January 2022 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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Last year, China decided to ban Bitcoin mining, and a lot of Bitcoin’s hashrate got redistributed, with the USA and Kazakhstan as the major recipients. Both countries combined now make up more than 50% of Bitcoin’s mining power.

As the beginning of the year saw protests over a spike in fuel prices which soon turned violent, the ruling regime in Kazakhstan decided (as autocratic governments now do) to shut off the internet so protesters couldn’t communicate with each other and the outside world anymore.

It also meant that the great number of Bitcoin mining companies operating on the Kazakh territory couldn’t communicate with the Bitcoin network anymore. In response to the internet blackout, the Bitcoin hashrate saw an immediate 12% fall.

By now, the price of a single Bitcoin has, also because of dropping stock markets and the Federal Reserve’s indication that they would cut interest rates earlier than foreseen, fallen to around $42,000, its lowest level since last September.

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Stability and cheap electricity

A possible result of the uprising and the Kazakh government’s handling could be that miners once again need to look elsewhere for their operations. Anirudh Rastogi, an Indian lawyer specialized in crypto, declared to CNN that:

It will eventually come down to miners finding the right hub for their activities. They need a place with political stability and cheap electricity.

The place where a lot of Chinese miners relocated to last year was Texas, USA, which has huge open spaces and still relatively cheap electricity. As a result, the USA (according to Cambridge University research) now controls almost 35% of Bitcoin’s hashrate while Kazakhstan miners control 18%. Hence, if 16% of Kazakh miners were to relocate to the USA, the unthinkable, a 51% control of Bitcoin’s hashrate in a single country could once again be on the table.

Only problem is that whereas Bitcoin bashers before claimed that China controlled too much of Bitcoin for it to be a safe investment, this time it would be the US that holds the reins. If this would ever become reality, the global move of Bitcoin from East to West has really taken place.

Syda_Productions / Depositphotos.com