Bitcoin Photo: CFP

Some major Bitcoin mining pools in Kazakhstan have been significantly affected after internet access was cut off amid protests sparked by fuel costs in the country, which is home to as much as 18 percent of the world's Bitcoin hashrate after miners flocked to the country following a crackdown in China.

Industry insiders told the Global Times on Thursday that some Chinese miners in Kazakhstan might only be partly affected due to their use of satellite networks, which might help maintain some hashrates. 

According to a report from industry website the blockcrypto.com on Wednesday, numerous mining pools saw a decline in rates compared to half day ago - before the broader internet shutdown as reported by multiple news outlets.

The hashrate is a measure of computing power dedicated to mining and processing Bitcoin.

The most significantly affected were 1THash (82 percent decline), OKExPool (46.3 percent decline) and KuCoinPool (22.7 percent decline), said the report.

"But as far as I know, some Chinese miners are using satellite networks in Kazakhstan, so they will not be affected by the internet cut," a veteran industry insider told the Global Times on Thursday.

In June last year, several miners in China told the Global Times that they were considering moving mining machines to the US state of Texas or to Kazakhstan, given more favorable cryptocurrency policies and cheap electricity in those places.

It is estimated that 20 percent of China's mining capacity has been transferred to Kazakhstan, about 30 percent to the US, and 15 percent remains in China or went elsewhere, Shentu Qingchun, CEO of Shenzhen-based blockchain company BankLedger, told the Global Times on Thursday.

China has conducted a nationwide crackdown on Bitcoin mining activities since June last year. During the crackdown, 26 major Bitcoin mining hubs were forced to shutter in Southwest China's Sichuan Province - one of China's largest cryptocurrency mining bases - and during one week in June, more than 70 percent of the total mining capacity in China went offline, according to a Fortune report, citing industry analysts.

Following the ban, the US, Kazakhstan and Russia took China's place. The US' global hashrate share reached around 35.4 percent, up from 16.8 percent before the China crackdown. 

Kazakhstan - whose proximity and cheap coal made it an attractive destination - gained 10 percentage points in its share of the global hashrate, to reach 18.1 percent, and the Russian Federation, coming in third place, took 11 percent of the global share, according to the report, citing the Cambridge Centre for Alternative Finance.

Global Times