Bitcoin mining has had plenty of news coverage over the past year with the china mining ban and now with Western Europe's calls to ban bitcoin minig. While certain eastern european countries like Kosovo have imposed an outright ban while the Georgian government also forcing citizens to vow not to mine cryptos.
Russia has recently turned the corner on bitcoin in its latest flip flop while Eastern Europe specifically Kazakhstan has been quite the benefactor of the China ban.
It seemed to be bitcoin friendly country but with Europe in an energy crisis we're seeing increased regulatory scrutiny. It has not been an easy time for Kazakh miners as in early January, a countrywide internet blackout hit them hard while unrest has spilled into the streets.
These are major issues for the bitcoin network as Kazakhstan is the 2nd largest Bitcoin mining nation after the U.S.
After those issues, miners thought they could get back to it but this week, the Kazakhstan government has floated the idea of a 500% tax on Bitcoin miners.
The idea comes in response to chatter from members of the Kazakhstan government on hitting unregistered miners knowns as “Gray miners”. The reason is, some electricity consumption in the country is not accounted for and could be moving to these gray operations.
As you can imagine a massive tax like this could make many mining operations unsustainable and force these miners to relocate and find new energy sources. Miners will naturally want to look for the cheapest electricity but they also need to factor in political stability in the regions they choose.
If these tax regulations are pushed through it could have a similar impact to the bitcoin network as a load of hash rate is taken offline freaking out paper hand investors. We could see prices take a hit and that's great for long-term hodling.
It may push the US even further as a leader in the mining game which I am not too keen on, I'd like to see more decentralization and competition in mining. The more countries that have mining operations the less chance of governments affecting the network
Open arms can be a trap
Kazakhstan welcomed miners from China offering mining operations discounts and subsidies and they thought it was a strategic move to bring in operations that could bring in capital and jobs. Giving these miners a sweet deal and getting them to invest may seem them reluctant to move due to sunk cost issues and leaving them in the mercy of the government.
Like any business you have to evaluate the risk you take and perhaps this was a risk that will put certain miners out of business.
Source:
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500% tax on the mining could be damaging for the crypto industry as whole
Damage of the crypto industry, yes, as for bitcoin I don't see it as a problem
500% tax is way too crazy and I doubt any miners would want to stay there after that. While we wouldn't want it to be more centralized in the US, I do think that BTC won't really be hit that hard with taxes and the states will probably fight for the mining companies.
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I hope other individuals take up the chance to secure bitcoin and provide hash rate while countries trip over themselves to miss out on the benefits of bitcoin
If they do end up rolling out those taxes, I'll be 500% sure miners will be looking for a new home. Hopefully they don't all move to US and some go to countries that are looking to adopt BTC as legal tender this year. If it drops the price and hash rate, long term HODLers and current miners will be licking their orange tinted lips at the thought of cheaper sats!
I'm hoping that industrial miners don't eat everyone's lunch and that more people start home and garage mining operations and keep the hash rate distributed and distribute new coins all over the world. Let them keep attacking large mining operations all it does is drive decentralisation of mining
More mining facilities are allowing retail to get involved as well like buying fractions of miners that you can do with CM and Compass so that's another option if people aren't able to have their own home mining set ups
True and it's probably more efficient, I am just a sucker for the DIY life
oh really.. its great news
and why would you consider it great news?