Bitcoin network power slumps as Kazakhstan crackdown hits crypto miners | Hacker News Reader

Bitcoin network power slumps as Kazakhstan crackdown hits crypto miners

reuters.com

> Kazakhstan's crypto mining farms are mostly powered by ageing coal plants which themselves - along with coal mines and whole towns built around them - are a headache for authorities as they seek to decarbonise the economy.

Let's hope they stay shut off then.

Do you know that internet is down due to civil unrest and many people are reported dead? While I understand your excitement towards Bitcoin's problems, please read up on context why it is happening.

https://www.cnn.com/2022/01/06/asia/kazakhstan-fuel-protests...

https://www.nytimes.com/live/2022/01/06/world/kazakhstan-pro...

The civil unrest was triggered in part by soaring energy prices, in a country where bitcoin mining consumes 8% of total generation capacity.

Soaring prices of fuel and gas, not electricity.

And Kazahk authorities are far from democratic, they block internet in whole country to stop the protests, they did strange things with internet access last year also.

And they invited Russian troops to stop the unrest. And their (or the invited) military shoots to kill its own citizens.

Oil and gas contribute 50% of Kazakhstan's electricity generation

> Soaring prices of fuel and gas, not electricity.

Nat gas accounts for about 20% of Kazahktan's electricity generation mix.

> And Kazahk authorities are far from democratic, they block internet in whole country to stop the protests, they did strange things with internet access last year also. And they invited Russian troops to stop the unrest. And their (or the invited) military shoots to kill its own citizens.

This is all true, but also a bit beside the point given the above exchange.

But, whatever. Suppose I concede this point that coal consumption doesn't really have much of anything at all to do Kazahktan's current unrest. Doesn't that make nalrey's comment here totally moot?

Riots are over LPG prices, used in cars, and villagers' kitchens. It is composed of heavier weight alkanes, propane, butane and heavier.

It's not the same as the natgas used for power generation, which is almost entirely methane.

Not every energy crisis in the wolrd is caused by Bitcoin, which literally uses less energy than gamers or heated pools.

> Riots are over LPG prices... not the same as the natgas used for power generation

...think very carefully and very slowly about the following question: so what?

(The answer to that question will betray a wild misunderstanding of the political economy of Kazakhstan.)

> Not every energy crisis in the wolrd is caused by Bitcoin

Hm. I don't remember saying otherwise. I must have stuttered?

> which literally uses less energy than gamers or heated pools.

Globally. In Kazakhstan it consumes 8% of production, which is insane. 8% is a fucking huge number in a country experiencing an energy crisis.

Hell, it's a huge number period. By percentage comparison, that's all refrigeration and freezing in the US. Can you imagine? Insane.

Anyways, this is all beside the point. I'll avoid stuttering this time and repeat myself clearly and slowly this time:

>> But, whatever. Suppose I concede this point that coal consumption doesn't really have much of anything at all to do Kazahktan's current unrest. Doesn't that make nalrey's comment here totally moot?

They won't stay off until it's not profitable anymore. Unfortunately bitcoin community has ossified & it seems unlikely that they will solve the problem (i.e. reduce block subsidy, move to PoS). The price needs to go down or some regulation needs to be applied to either increase cost of electrity from dirty sources (i.e. carbon tax) or make cryptocurrency less attractive (e.g. China has been moving in this direction)

Eh, no. The Bitcoin mines are actually threatening the government, because they are contributing to a local rise in the price of gas and electricity which is driving revolts. So the government is definitely going to kick them out.

It also depends where the profits are going. Governments don't want their energy subsidies draining their country of funds.

Looking at the Bitcoin hash rate, it doesn’t look that extreme: https://www.blockchain.com/charts/hash-rate

What am I missing? Even of the whole of Kazakhstan stopped mining, and I hope they do, it wouldn’t kill Bitcoin. The difficulty will adjust but more miners will jump in as the difficulty goes down making it more affordable for others, fueled by greed unfortunately…

On another note, I’ve always wondered how so many people are running full nodes, knowing that they’re essentially hosting CP images and why this isn’t being cracked down on: https://internetofbusiness.com/bitcoin-blockchain-contains-i...

Nothing - it just won't have reached the front page if the headline was "Bitcoin hash rate is reduced by 1%" or whatever

I don't see Jan 5 data on that site yet. What am I missing?

You're not missing anything.

But now that the data from the 5th is there, I’m not seeing a drop. Perhaps it will show up on the 6th? Or the article was wrong? Or this website’s estimates off hash power are wrong?

> ...knowing that they’re essentially hosting CP images and why this isn’t being cracked down on

See "What Colour are your bits?" https://ansuz.sooke.bc.ca/entry/23

Essentially this is the "nonsense conclusions" described there, but in inverse. If you're not interested in those images and don't even know specifically how to decode them, then legally you're probably not in possession of them just as I'm not worried about accidentally generating something illegal in some encoding or other by running my random number generator. And nor is any prosecutor going to care.

A lot of "Kazakhstani pools" are not in Kazakhstan physically, but are just people who buy their shipping container miner farms.

If more countries ban crypto mining we can successfully perform a 51% attack and destroy the value of Bitcoin, which should eradicate this useless and wasteful technology forever. Hopefully more countries follow suit and the attack can begin.

Found Mojo Jojo

Is there a less interesting place to discuss crypto than HN?

In my country they closed a bank account of a dude that was critical to a politician. And the bank acc of his wife. Central EU, "developed world". They can't do this wit your private crypto wallet.

Which country?

Probably Bulgaria, Romania, or Poland.

Used to be Slovenia. Now more Slovenian democratic repulic. Democratic in the name so you know democracy works...

What's to stop miners, or exchanges, agreeing to blacklist certain wallet addresses?

That it won't work even for fiat? Of course there are some blacklists against certain prominent persons but the vast majority of dirty money goes around unfettered.

The problem in this case is the government not the banking technology. Do you really think if there are armed police at your house to intimidate you you are safe because there's a crypto wallet on your phone?

https://xkcd.com/538/

In Europe they both go by the hand. It just doesn’t cringe loud as they usually cooperate peacefully.

I saw another comment of your, about what case you are talking about. I thought hackernews was not overly sensational :(

I can't imagine disliking a technology so much I put it as my username and spend my free time writing about how much I hate it on tech forums

There is a concerted effort going on here.

No. A lot of people just passionately hate bitcoin, for rational reasons. It's not concerted. The government isn't sending people to HN to dissuade you from buying Bitcoin. If the powers that be wanted to shut down bitcoin, all they'd have to do is come together, agree to seize all mining equipment, and do a 51% attack together to fill the Blockchain with trash. Maybe also run some stings on BTC exchanges. They don't need to convince you not to use it.

"All they'd have to do is come together, agree to seize all mining equipment, and do a 51% attack together"

Think this through for a bit. Governments have holdings in bitcoin. Financial institutions have holdings in bitcoin. Citizens have significant percentages of their savings in bitcoin. Bitcoin is available in various financial instruments now, so this would have knock-on effects in the wider market. A large percentage of crypto hash rate is from unknown parties or distributed on regular computers/phones/botnets, so the governments would have to invest money into mining equipment to run this 51% attack that would end up being totally dead money after the attack. You'd have lobbying from huge money sources to stop this happening. You'd have governments looking to take advantage of this. You'd be trying to destroy the legal tender of some countries which I believe is illegal under international law. By increasing the hash rate you'd be increasing the price of the coin and incentivizing people to defend against it. And, if it all happened, people could do what happened to Ethereum and simply fork Bitcoin from the point of the attack. No more mining equipment? Run PoS.

Bitcoin is not the sovereign currency of any country, so there is no issues as far as international law.

Sure, lobbying is an issue, but if the government is lobbied to support crypto, they support crypto. I'm starting from the assumption that they see it as an existential threat and want to eradicate it.

When I say "governments", I mean the likes if China, the US, and some key states of the EU. Really not that many.

Did you miss the part where El Salvador made it one of its official currencies?

Official currency != Sovereign currency.

El Salvador also had the US dollar as an official currency, does that mean they get to sue you if you destroy US dollars or devalue the currency (as the US can do)? Of course not, because while it's a currency the Salvadoran government agrees to accept, it's not actually their sovereign currency.

It doesn't really look like a roaring success as of now.

> Governments have holdings in bitcoin

What governments have holdings in bitcoin? If you refer to El Salvador I don't think that this is a shining example. If you're referring to failed states, like Venezuela, I'd like to see a source for your assessment. Having as much funds as possible in hard currency is much more important for such countries. That's why I don't buy it.

> Financial institutions have holdings in bitcoin

I'm working in finance and argue that they don't hold funds in bitcoin. At least not their own funds. Sure, they're looking into crypto and blockchain. They could miss on the next big thing (yet to materialize). But I've yet to see a marketable offering, or a useful solution based on the technology by any reputable financial institution. If you know of an established bank (I rule out crypto exchanges in any form), which invests in crypto I'm interested in who this may be.

When that technology becomes a non-trivial part of the global CO2 emission without bringing any value for anyone except select few "investors", it becomes an issue.

Completely shutting down all cryptos would have the following effects:

- Immediately reducing electricity consumption worldwide

- Making money transfer for illegal activities (drug, human trafficking, prostitution, gambling, ...) harder

- Making money laundering of said activities harder

- Reducing the electronic chip shortage

- Forcing a bunch of young, adventurous, often quite clever people to find another source of revenues. Hopefully by providing some tangible value to society

It sound like a good plan. The only real I see are for people using cryptos in authoritative regimes, so overall a net benefit for the world.

> Also, single-purpose accounts are not allowed here generally, because they aren't compatible with the value of curiosity that's supposed to animate this place (see https://news.ycombinator.com/newsguidelines.html). [1]

[1]: https://news.ycombinator.com/item?id=29692666

I'm not sure that "discussing crypto" should count as single-purpose. Otherwise many of the more interesting people who post on hn are almost certainly single-purpose posters (on whatever their pet topic/project/area of expertise happens to be).

In any case, I found the above post compelling. What if critics of crypto pooled resources and waited for a major crisis, and then launched a 51% attack at just the right moment? It's an interesting thing to think about.

if ever the threat of a sustained and deeply-buried 51% attack actually appeared, the core devs, effectively meaning Adam Back, would just find an excuse to fork away by declaring the exploited fork uncanonical (in so many words).

The mob of laser-eye HODLbugs will fall right in line and go on full social media attack against anyone supporting the old chain. All will all vehemently deny any ensuing comparison to ETH vs ETH classic.

Go lick a boot.

So this [1] has been going on and is pretty serious. It makes clear the importance of setting up mesh networks. If you're cut off from communication in the midst of something like this, you're helpless.

[1] https://thehill.com/policy/international/588318-kazakhstan-g...

We need more Starlink-like services which aren't dependent on local physical infra... local mesh networks are not viable without a physical backbone, which can be turned off.

You sure know that places like China or Russia strictly forbid Starlink use? How'd you plan to use a service like this if it's considered a major offense by the autocracy?

Local mesh networks are way easier to hide than Starlink transmitters.

All Russia would have to do is fly one of their AWACS over a city and they could make a list of all the active Starlink transmitters, and get them arrested.

Mesh networks do sound like a real solution, but we need a substrate that can do long-distance hops. Otherwise, it'd just a bunch of population-center islands of communication. Perhaps this is better than nothing, but with that being the best case, it seems to be the hurdle preventing progress.

Otherwise, seems all we've really got is Ham Radio.

Suggestions as to what I'm missing here?

That's right. The natural way to do this is to do long-haul point to point wireless using commodity hardware. Such backhaul links will be limited to a few Gbps each but that's better than nothing.

Building this out further, you could create a network like this:

https://arxiv.org/abs/1809.10897

I think the problem isn't technical. Point to point links or satellite fit the requirements. The problem is that it's very dangerous to operate one in a state where the government has turned the internet off to suppress protests.

I think what's important primarily is the inter-island communication first -- the power of the people in communication well exceeds any governmental force.

But I agree, to be connected to the world at large, we need to make sure there are satellites, long haul ptp microwave wifi, and other methods connecting the islands.

My heart weeps for Kazakhstan, I pray that no more will be harmed.

I admire nerds' ability to imagine that every political problem has a purely technical solution. It's a wonderful dream world where the answer to climate change is a hackathon.

Sounds like demonstrating a working solution to a problem doesn't convince some people :( .

Who's saying "purely?" Tools help. They don't solve things on their own, but they do help.

Oppressive governments also use tools, like surveillance equipment and weapons. Nobody makes snide remarks about their dependence on technical solutions.

This is not a new trend. I no longer even remember who started it ( was it India ?), but these days whenever government in power is seriously challenged, internet communication is the first to go. This just happened to also hit a crypto network.

>Internet Traffic in Kazakhstan (Last 7 Days)

https://radar.cloudflare.com/kz?date_filter=last_7_days

Most miners in Almaty are fleeing to Kyrgyzstan now.

They have by far more valuables on hand than any bank. One shipping container farm == few megabucks depending on generation of ASIC miner chips.

What a weird term 'power' they picked for the value that went down. It is either 'difficulty' or 'total hashrate'.

Things are not looking good for Bitcoin

https://www.youtube.com/watch?v=c_tcg9kOfkg

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