A provincial powerhouse chief in Kyrgyzstan, abusing his position as an officer, was arrested after being accused of illegally connecting a cryptocurrency mining farm to the national grid. This was revealed by the security services on 8 December.
The former Soviet Union countries of Central Asia have become destinations for cryptocurrency miners, especially following China’s ban on Bitcoin. But the mining operations have weighed on the electricity grids, already obsolete, and it seems that the event took place in a period of particular energy crisis that the state of Kyrgyzstan is going through at the moment.
As early as 2019, the Kyrgyz State Committee for National Security (SCNS), began to revoke the authorization of cryptocurrency miners, as mining activities caused severe energy shortages affecting the population, ignoring an energy deficit in course in the Central Asian nation. However, it appears that mining farms continue to operate illegally.
The geopolitics of cryptocurrency mining has been undergoing numerous changes in the last period, on the one hand due to the restrictions put in place by China which led to a flight of miners from the country, and on the other by the changes in the energy market, which favors the regions where the cost of extraction is lower.
There are geologically strategic countries for mining. First of all Iceland for example, where, thanks to his geothermal energy the German entrepreneur Marco Streng founded Genesis Mining, a data center with more than 30,000 computers. Iceland is an optimal country for the crypto-industry, a country with a cold climate, excellent for avoiding overheating of mechanical components.
Closer to Kyrgyzstan than Iceland, however, Russia has an advantage that the other countries in the area don’t have. It’s called “Sibir”: Siberia.
Siberia has a huge level of attraction for those who want to mine bitcoin because it is a region where electricity is cheap thanks to its large rivers (about 4 cents per kilowatt hour), where the Arctic climate with peaks of even -40 in winter, allows processors and graphics cards to work well, and where the absence of precise rules favors the proliferation of this activity. This is an aspect that in Russia have wisely understood, becoming a crypto-friendly country, not hindering companies that move there from the surrounding regions to be able to work, Russia attracts investments and at the same time attracts hash power. By attracting miners, Russia also – and above all – attracts hash power and, in an increasingly digitalized world, hash power can easily be transformed into political power.
