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The authorities in Kazakhstan are contemplating a three-dimensional proposal developed to implement additional restrictions over the crypto miners functioning across the country, to turn Kazakhstan into a less attractive territory for the industry of cryptocurrency. On 4th February, Marat Sultangaziyev – the first Finance Vice-Minister of Kazakhstan – suggested an increase in the price of electricity to $0.01 per Kwh (nearly 335% above the previous $0.0023) particularly for those who mine cryptocurrency.

He added that the amount of tax should be implemented on each of the GPU (graphics cards) as well as the equipment required for the mining. He made a link between the tax over video cards and the tables in the casino which are taxed individually, irrespective of their inactivity.

The additional thing in the proposal was related to excluding mining hardware from being exempted out of VAT (value-added tax). There is a need for utilizing particular hardware for the mining of Bitcoin by performing mathematical calculations required or the creation of the latest blocks over the blockchain.

Bigger operations of mining take account of up to ten thousand mining rigs along with application-specific integrated circuits (ASIC), cooling units, racks, GPUs, as well as related facilities. During the previous days before the implementation of restriction or internet access in the last month, Kazachstan was considered to be among the most prominent areas for crypto miners after the prohibition over crypto mining that was imposed on the behalf of China during the previous summer.

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Near 5th January, the hash rate of Bitcoin’s network plunged by almost 13.4% just in a single day from nearly 205 EH/s (per-second exa hashes) to 177 exa hashes per second because of the temporary shut down across Kazakhstan. A huge bitcoin mining activity that exited China and entered Kazakhstan in recent July, mentioned in January that its operations cannot be forced by the political unrest to move elsewhere. Nonetheless, that was in advance of the proposal for an increase over the tax and energy prices.

Several miners have been attracted due to Kazakhstan’s economic energy charges as well as nearness to China during the crackdowns across the country. In this way, Kazakhstan turned into the second-biggest manufacturer of Bitcoin hash power after the United States, providing almost 18% of the cumulative hash rate of the network till 2021’s August, as per Cambridge University.

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Nathan Ferguson

By Nathan Ferguson

Nathan Ferguson is a talented crypto analyst and writer at Herald Sheets, dedicated to delivering comprehensive news and insights on the ever-evolving digital currency landscape. With a strong background in finance and technology, Nathan's expertise shines through in his well-researched articles and thought-provoking analysis. He holds a degree in Economics from the University of Chicago, and his passion for cryptocurrency drives him to stay up-to-date with the latest industry trends and developments.