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It seems noteworthy that Kazakhstan represents ~22% of Bitcoins hashrate (~45 TWh/year of electricity), at the same time as people are out in the streets riotin

It seems noteworthy that Kazakhstan represents ~22% of Bitcoins hashrate (~45 TWh/year of electricity), at the same time as people are out in the streets rioting over the price of heating their homes.

adolph 5y ago
I’ve read this note about Kazakhstan and BTC a couple of times now but I havnt seen any documentation for the claim. For a crypto novice, what would be a method for validating this claim? BTC and other crypto seem to gravitate toward less expensive energy sources, yet require a substantial capital investment. Is crypto an emerging method for dictators to expropriate wealth? Are there going to be “blood bits” similar to “blood diamonds” or other commodities tainted by their provenance?
- MagnumOpus 5y ago
  > Is crypto an emerging method for dictators to expropriate wealth Yes, same for local mafiosi/siloviki who can force the electricity company guy to look the other way (at gunpoint). > Are there going to be “blood bits” similar to “blood diamonds” Given the recirculation and tumbling, probably a majority of BTC/Ether went through shady people's hands (just like most $100 bills have coke residue on them...). Bitcoin advocates usually tout this as a feature not a bug.
  - adolph 5y ago
    Isn't there a difference between using a medium of exchange versus creating it? To stretch the analogy, instead of using $100 bills, printing them a la NK superbills? If dictators/mafiosi contribute a significant amount to the overall hash rate, are they not decreasing transaction costs for whichever blockchain they use?
    - pjc50 5y ago
      Part of the stupidity of bitcoin's proof-of-waste algorithm is that increasing the hashrate increases transaction costs. The difficulty level adjusts automatically to maintain N blocks per hour, while the number of transactions in a block is fixed. So adding hashrate just increases the energy cost of blocks. (The actual transaction cost to the user is driven by congestion and is set unilaterally by the user based on their tolerance for queueing, so it can be zero.)
      - mrguyorama 5y ago
        It can theoretically be zero. When's the last time a zero cost transaction made it? Or more realistically, what's the mean transaction time for a zero cost transaction?
- sushibowl 5y ago
  https://ccaf.io/cbeci/mining_map https://ccaf.io/cbeci/mining_map This data is from geolocation of the IP's of miners connecting to the servers of mining pools. Note the obvious flaws in the methodology: 1. IP geolocation data may not accurately represent the location of the mining hardware (e.g. VPNs could be used) 2. The participating mining pools may not be a representative sample of the total hashrate distribution. So take the data with a grain of salt. Especially since China banned all crypto mining in the past year, going from a reported 35% share to nothing in an instant, it seems plausible some miners are operating underground using a VPN. Some people are saying that up to 20% of total capacity is actually still operating in China.
- Maxious 5y ago
  The newest documentation is when the internet got turned off for Kazakhstan, the hash rates of mining pools went down. Alot. https://twitter.com/lawmaster/status/1478764142957846531 https://twitter.com/lawmaster/status/1478764142957846531
  - adolph 5y ago
    If Chinese crypto is being IP-washed through Kazakhstan as a sibling comment speculates, would that cause external pressure for Kazakhstan to re-enable Internet?
- codebolt 5y ago
  I took the 22% figure from an article that referenced an overview produced by the University of Cambridge, available here: https://ccaf.io/cbeci/mining_map https://ccaf.io/cbeci/mining_map I see now that their most recent figure has changed to 18.1%. The electrical power figure was then calculated based on the total global power consumption published in the Bitcoin Energy Consumption Index: https://digiconomist.net/bitcoin-energy-consumption/ https://digiconomist.net/bitcoin-energy-consumption/
  - adolph 5y ago
    > ~22% of Bitcoins hashrate (~45 TWh/year of electricity) It looks like Kazakh total energy consumption is 861 Kwh [0] and total elecricity is 104 TWh. Is it realistic for 43% of a country's electricity to be going to Bitcoin? If that were true, what sort of infrastructure would be developed? Datacenters colocated with coal plants? Over less than a year, Kazakh average monthly hashrate share went from 5% to 18%, increase of >260%. Given 2020 utilization of 104 Kwh with 12.5 Kwh going to Btc ((5/18)45=12.5), then current (no pun intended) utilization with 18% hashrate share would be 136 Kwh (104+45-((5/18)45)). Is it reasonable for a country to increase electric generating capacity by 30% to support bitcoin? Oct'20: 4.77% Nov'20: 5.35% Dec'20: 6.17% Jan'21: 6.71% Feb'21: 7.65% Mar'21: 8.19% Apr'21: 7.37% May'21: 8.80% Jun'21: 13.79% Jul'21: 18.10% 0. https://ourworldindata.org/energy/country/kazakhstan https://ourworldindata.org/energy/country/kazakhstan
    - codebolt 5y ago
      You make a valid criticism. The estimates I've used are likely upper range. But even if we're off by a factor of 1/2 (which I don't believe) I feel the point being made still stands. It also seems the increase in hashrate coincides with China banning Bitcoin mining? That likely puts a skew on the numbers, although I'm not immediately sure which way.
gnull 5y ago
We could distribute the mining farms to people's homes to warm them up, this way everyone wins.
- codebolt 5y ago
  Yes, outfitting all poor villagers in Kazakhstan with highly expensive computers seems like a realistic solution.
  - gnull 5y ago
    (It was a joke.)
    - codebolt 5y ago
      Was actually a bit unsure. With all the blind crypto idealism going around, it's getting hard to tell what's sarcasm anymore.
anticodon 5y ago
> rioting over the price of heating their homes. Even though the price of LPG had doubled and that supposedly caused riots, even the new doubled price is way lower than price of LPG in Europe and other parts of the world.
- codebolt 5y ago
  And their average annual household income is little over 3000 USD. And they're currently experiencing temperatures around -15 C. I can only imagine the situation in the countryside. Not difficult to see why they're upset.
anonair 5y ago
The issue is with liquid gas prices used for car ICEs, not for home heating
- codebolt 5y ago
  Not according to this: https://iea.blob.core.windows.net/assets/a064b82a-4e4c-41ce-a8ac-047e410f0582/Clean_Household_Energy_Consumption_in_Kazakhstan_-_A_Roadmap.pdf https://iea.blob.core.windows.net/assets/a064b82a-4e4c-41ce-... > Use of natural gas by households is dependent on the availability of natural gas network and price (Figure 5, Figure 6). Out of 21 000 surveyed households, 41% were using natural gas (for all purposes, including for heating, water heating and cooking purposes). The share of natural users by house type was as follows: 45% of urban apartments, 50% of urban detached houses, 31% of rural apartments and 31% of rural detached houses. Majority of the households in the western regions of Kazakhstan rely on natural gas due to the developed gas pipeline infrastructure and low gas prices.

adolph 5y ago

I’ve read this note about Kazakhstan and BTC a couple of times now but I havnt seen any documentation for the claim. For a crypto novice, what would be a method for validating this claim? BTC and other crypto seem to gravitate toward less expensive energy sources, yet require a substantial capital investment. Is crypto an emerging method for dictators to expropriate wealth? Are there going to be “blood bits” similar to “blood diamonds” or other commodities tainted by their provenance?

MagnumOpus 5y ago
> Is crypto an emerging method for dictators to expropriate wealth Yes, same for local mafiosi/siloviki who can force the electricity company guy to look the other way (at gunpoint). > Are there going to be “blood bits” similar to “blood diamonds” Given the recirculation and tumbling, probably a majority of BTC/Ether went through shady people's hands (just like most $100 bills have coke residue on them...). Bitcoin advocates usually tout this as a feature not a bug.
- adolph 5y ago
  Isn't there a difference between using a medium of exchange versus creating it? To stretch the analogy, instead of using $100 bills, printing them a la NK superbills? If dictators/mafiosi contribute a significant amount to the overall hash rate, are they not decreasing transaction costs for whichever blockchain they use?
  - pjc50 5y ago
    Part of the stupidity of bitcoin's proof-of-waste algorithm is that increasing the hashrate increases transaction costs. The difficulty level adjusts automatically to maintain N blocks per hour, while the number of transactions in a block is fixed. So adding hashrate just increases the energy cost of blocks. (The actual transaction cost to the user is driven by congestion and is set unilaterally by the user based on their tolerance for queueing, so it can be zero.)
    - mrguyorama 5y ago
      It can theoretically be zero. When's the last time a zero cost transaction made it? Or more realistically, what's the mean transaction time for a zero cost transaction?
sushibowl 5y ago
https://ccaf.io/cbeci/mining_map https://ccaf.io/cbeci/mining_map This data is from geolocation of the IP's of miners connecting to the servers of mining pools. Note the obvious flaws in the methodology: 1. IP geolocation data may not accurately represent the location of the mining hardware (e.g. VPNs could be used) 2. The participating mining pools may not be a representative sample of the total hashrate distribution. So take the data with a grain of salt. Especially since China banned all crypto mining in the past year, going from a reported 35% share to nothing in an instant, it seems plausible some miners are operating underground using a VPN. Some people are saying that up to 20% of total capacity is actually still operating in China.
Maxious 5y ago
The newest documentation is when the internet got turned off for Kazakhstan, the hash rates of mining pools went down. Alot. https://twitter.com/lawmaster/status/1478764142957846531 https://twitter.com/lawmaster/status/1478764142957846531
- adolph 5y ago
  If Chinese crypto is being IP-washed through Kazakhstan as a sibling comment speculates, would that cause external pressure for Kazakhstan to re-enable Internet?
codebolt 5y ago
I took the 22% figure from an article that referenced an overview produced by the University of Cambridge, available here: https://ccaf.io/cbeci/mining_map https://ccaf.io/cbeci/mining_map I see now that their most recent figure has changed to 18.1%. The electrical power figure was then calculated based on the total global power consumption published in the Bitcoin Energy Consumption Index: https://digiconomist.net/bitcoin-energy-consumption/ https://digiconomist.net/bitcoin-energy-consumption/
- adolph 5y ago
  > ~22% of Bitcoins hashrate (~45 TWh/year of electricity) It looks like Kazakh total energy consumption is 861 Kwh [0] and total elecricity is 104 TWh. Is it realistic for 43% of a country's electricity to be going to Bitcoin? If that were true, what sort of infrastructure would be developed? Datacenters colocated with coal plants? Over less than a year, Kazakh average monthly hashrate share went from 5% to 18%, increase of >260%. Given 2020 utilization of 104 Kwh with 12.5 Kwh going to Btc ((5/18)45=12.5), then current (no pun intended) utilization with 18% hashrate share would be 136 Kwh (104+45-((5/18)45)). Is it reasonable for a country to increase electric generating capacity by 30% to support bitcoin? Oct'20: 4.77% Nov'20: 5.35% Dec'20: 6.17% Jan'21: 6.71% Feb'21: 7.65% Mar'21: 8.19% Apr'21: 7.37% May'21: 8.80% Jun'21: 13.79% Jul'21: 18.10% 0. https://ourworldindata.org/energy/country/kazakhstan https://ourworldindata.org/energy/country/kazakhstan
  - codebolt 5y ago
    You make a valid criticism. The estimates I've used are likely upper range. But even if we're off by a factor of 1/2 (which I don't believe) I feel the point being made still stands. It also seems the increase in hashrate coincides with China banning Bitcoin mining? That likely puts a skew on the numbers, although I'm not immediately sure which way.

gnull 5y ago

We could distribute the mining farms to people's homes to warm them up, this way everyone wins.

codebolt 5y ago
Yes, outfitting all poor villagers in Kazakhstan with highly expensive computers seems like a realistic solution.
- gnull 5y ago
  (It was a joke.)
  - codebolt 5y ago
    Was actually a bit unsure. With all the blind crypto idealism going around, it's getting hard to tell what's sarcasm anymore.

anticodon 5y ago

> rioting over the price of heating their homes. Even though the price of LPG had doubled and that supposedly caused riots, even the new doubled price is way lower than price of LPG in Europe and other parts of the world.

codebolt 5y ago
And their average annual household income is little over 3000 USD. And they're currently experiencing temperatures around -15 C. I can only imagine the situation in the countryside. Not difficult to see why they're upset.

anonair 5y ago

The issue is with liquid gas prices used for car ICEs, not for home heating

codebolt 5y ago
Not according to this: https://iea.blob.core.windows.net/assets/a064b82a-4e4c-41ce-a8ac-047e410f0582/Clean_Household_Energy_Consumption_in_Kazakhstan_-_A_Roadmap.pdf https://iea.blob.core.windows.net/assets/a064b82a-4e4c-41ce-... > Use of natural gas by households is dependent on the availability of natural gas network and price (Figure 5, Figure 6). Out of 21 000 surveyed households, 41% were using natural gas (for all purposes, including for heating, water heating and cooking purposes). The share of natural users by house type was as follows: 45% of urban apartments, 50% of urban detached houses, 31% of rural apartments and 31% of rural detached houses. Majority of the households in the western regions of Kazakhstan rely on natural gas due to the developed gas pipeline infrastructure and low gas prices.