Miners

Abkhazia Extends Internet Restrictions for Cryptocurrency Miners

09/10/2021 by Idelto Editor

The government in Abkhazia has extended an order prohibiting access to internet sites used by cryptocurrency miners. The measure is part of a wider ban on activities related to the extraction of digital coins that also limits the use of electricity and imports of mining equipment in the breakaway Georgian republic.

Authorities in Abkhazia Confirm Ban on Websites Needed by Local Miners

Abkhazia’s telecom and media watchdog has extended internet restrictions affecting crypto mining operations in the country. According to an order issued by the State Committee for Communications, Mass Media and Digital Development, access to certain websites used by miners remains prohibited until March 31, 2022. The initial ban adopted in late December expired on June 1 this year.

As per the document issued on Oct. 6, internet providers are required to implement the technical measures needed to block the websites that allow miners to conduct their coin minting activities, Forklog reported quoting the order. However, the government agency did not list the domain names of the sites that should be restricted.

Speaking to Sputnik Radio, the chairman of the committee, Beslan Khalvash, noted that the new order he signed applies to VPN services as well. He explained that the regulator used to take action against domains and IP addresses but as some users switched to VPNs. These platforms will also be targeted in the future. The official declined to comment in detail on how the ban had been circumvented but insisted:

In the fight against mining, we are reaching a completely different level.

Khalvash emphasized that internet providers in Abkhazia are now technically prepared to restrict access to both internet sites and VPNs. The companies have already acquired the necessary equipment and software to do this. The head of the watchdog assured: “I think that tomorrow or the day after tomorrow we will start closing these VPNs.”

Abkhazia, a partially recognized de facto state in the Southern Caucasus, introduced a temporary ban on mining activities in 2018 and extended it this spring until March 31, 2022. But officials in Sukhumi have recently recognized their efforts to impose the restrictions throughout the region have largely proved unsuccessful.

Despite seizing 6,000 mining devices, authorities have failed to disrupt crypto mining, which has proved to be an alternative source of income for many in the country. In September, the government in Sukhumi acknowledged that 30,000 mining rigs remain in the hands of miners, blamed for the region’s exacerbating power shortages.

Nevertheless, Beslan Khalvash insisted that the internet restrictions imposed last year have allowed Abkhazia to save a lot of electrical energy. “The decision was justified. I am sure that the extension of that order and the closure of VPNs will also have some effect… I think that this order will also provide an opportunity to save electricity,” he stated.

That, of course, is not so sure at all. Khalvash himself admitted that there are large cryptocurrency farms in Abkhazia which can afford to avoid using the services of local internet providers. “They can take internet from the satellite,” he conceded.

Earlier this year, reports revealed that Abkhazia is holding talks with its main backer, Russia, to solve the problem with its electricity deficit. The Minister of Economy Christina Ozgan said that authorities plan to organize additional supplies from the Russian Federation. What’s more, she added that they even want to set up facilities where miners can install their equipment and legally connect to the grid.

Do you think authorities in Abkhazia will be able to curb crypto mining? Tell us in the comments section below.

Lawmakers in Kazakhstan Propose Registration for Crypto Farms, Higher Electricity Rate for Miners

07/10/2021 by Idelto Editor

Members of the parliament in Kazakhstan have proposed the establishment of a state register for cryptocurrency farms operating in the country. Alarmed by the growing consumption of energy in the sector, the lawmakers also want to charge miners a higher price for the electricity they use.

Mazhilis Members Want Miners in Kazakhstan to Register With Government, Pay More for Power

A group of deputies from the Mazhilis, the lower house of Kazakhstan’s bicameral legislature, have voiced concerns over the growing electricity demand. The parliamentarians believe the surge is due to the influx of crypto mining companies into the country, attracted by its low energy prices.

Members of the People’s Party of Kazakhstan have put forward proposals to deal with the escalating situation. According to a report by Tengrinews, the lawmakers have urged Deputy Prime Minister Roman Sklyar to create a special register for crypto farms that mint digital currencies in the country.

Zhambyl Ahmetbekov, one of the deputies, noted that the increasing number of mining entities moving to the Central Asian nation significantly affects the volume of available energy. Foreign miners consume enormous amounts of electricity but they receive their revenues abroad, bringing no benefit to Kazakhstan, he pointed out, further stating:

In this regard, it is proposed to create a legislative register to account for the so-called mining farms and introduce a special increased electricity tariff for them.

Besides the higher electricity rate, the Mazhilis members have also called for the reintroduction of differentiated tariffs for the respective time zones of the day. Thus, prices will take into account peak hours of consumption and grid loads.

The proposals come after Kazakhstan’s energy minister Magzum Mirzagaliev revealed that power consumption this year jumped by 7% in comparison with 2020. “This is a very big increase,” the official said at a press conference last week, making it clear that the government is considering restrictions on mining facilities.

The spike in demand is largely due to the growing number of data centers devoted to cryptocurrency mining, Mirzagaliev told reporters. At the same time, he stressed that Kazakhstan needs to develop its crypto mining sector and announced the country intends to build new power plants with a combined 3,000-megawatt capacity in the next five years.

Amid an ongoing crackdown on bitcoin mining and other crypto-related activities in China, the region of Central Asia has attracted many businesses from the industry with its cheap energy. However, in Kazakhstan miners compete for electricity with other industries and households, which is worrying authorities in Nur-Sultan.

In June of this year, President Kassym-Jomart Tokayev signed a law amending the country’s legislation “on taxes and other obligatory payments to the budget.” The bill, adopted in parliament earlier that month, introduced a surcharge of 1 Kazakhstani tenge (approx. $0.0023) per kilowatt-hour used by cryptocurrency miners. The new fee will be imposed on Jan. 1, 2022.

Do you think Kazakhstan will introduce restrictions for cryptocurrency miners due to its power shortages? Tell us in the comments section below.

Crypto Miners Blamed for Power Supply Deficit in Kazakhstan, Government Mulls Restrictions

03/10/2021 by Idelto Editor

Kazakhstan is facing electricity shortages and cryptocurrency mining has been singled out as the main culprit. Amid an ongoing crackdown in China, the Central Asian nation has become a magnet for crypto miners who are taking advantage of its low electricity rates.

Republic of Kazakhstan Sees 7% Increase in Electricity Demand Due to Crypto Miners

Kazakhstan plans to boost its power generating capacities in the coming years but right now the country is experiencing electricity shortages. In 2021, consumption has surged by 7% in comparison with last year, a government official revealed at a press conference.

The spike in demand is largely due to a growing number of data centers devoted to cryptocurrency mining, Energy Minister Magzum Mirzagaliev told local media this week, referring to numbers released by the grid operator, KEGOC. Stressing that “this is a very big increase,” he stated:

We need to make a number of decisions. First, we must be able to ensure that system operators have the right to limit or reduce the consumption primarily of mining data centers at a time when there may be a shortage of electricity.

Mirzagaliev’s statement was quoted by Kazakhstan Today which remarked in its report that the activities of crypto miners now do not have a significant positive impact on the socio-economic indicators. Mining consumes the cheap electricity generated in Kazakhstan, competing with the growing needs of the rest of the economy and the population. The minted cryptocurrency is usually sold elsewhere and profits are accumulated abroad.

Nevertheless, the head of the Ministry of Energy insisted that Kazakhstan needs to develop its crypto mining sector and expressed confidence that the industry will evolve. Mirzagaliev pointed out there are “very good opportunities” for that, highlighting the country’s potential to expand the use of renewable energy.

In light of the current deficit, however, the department has prepared a number of proposals on how to deal with power shortages caused by miners. These include measures to limit the electricity consumption of existing mining data centers and suspend the connecting of new crypto farms to the grid.

At the same time, the government in Nur-Sultan will focus on increasing electricity production. Minister Mirzagaliev revealed that the country intends to build power plants with a combined 3,000-megawatt capacity in the next five years. While these electric stations will operate on natural gas, Kazakhstan will also launch new facilities relying on renewable energy sources. Their share in the country’s energy mix is expected to reach 6% by 2025 and at least 15% in 2030.

A study released by the University of Cambridge this year showed that the country has seen its share in the global extraction of bitcoin increase six times in less than two years. Kazakhstan now ranks third in the world by crypto mining volume. In July, the government decided to introduce a surcharge for the electricity used by miners, but that hasn’t stopped the influx of mining companies.

Do you expect Kazakhstan to successfully deal with its power supply deficit and continue to attract cryptocurrency miners? Tell us in the comments section below.

23,250 ‘Sleeping Bitcoins’ Spent in 2021: This Year Old School Miners Moved $1 Billion in BTC From 2010-2013

28/09/2021 by Idelto Editor

On Bitcoin’s 12th anniversary, a mystery miner from the early days spent 1,000 decade-old bitcoins that were mined in 2010. The strange miner was not the only entity that spent 2010 BTC block rewards during the last nine months, but this miner returned on a few occasions to spend strings of ten-year-old block rewards. As the end of 2021 nears, 152 blocks with 7,600 bitcoin worth $319 million today and minted in 2010 have been spent this year after sitting idle for over a decade.

**Editor’s note: This article was updated at 12:40 p.m. (EST) on Sept. 28, 2021, to include commentary from the creator of the blockchain parser, in order to explain the parser’s definition so-called ‘sleeping bitcoins.’

Old School Whale Transfers From 2010 Outpace 2011 and 2012 Spends, $977 Million Worth of Sleeping Bitcoins Moved This Year

During the last 12 years bitcoins have been lost by a great number of people under different circumstances, and it’s likely these coins will never return to circulation. Then there’s another group of bitcoins the community calls ‘sleeping bitcoins’ or ‘zombie bitcoins’ because they have been sitting idle since the day they were created.

At some point, if the owner decides to spend the bitcoin, the ‘sleeping bitcoins’ wake from slumber after a number of years. Last year and this year, Bitcoin.com News has been monitoring old school block rewards that get spent years later, after discovering an extraordinary 2010 whale.

Following the spend on the 12th anniversary of Bitcoin (January 3, 2021), the mystery miner appeared a few times during the year to spend strings of 20 block rewards from 2010. Block spends from 2010 are not common, and each block reward contains 50 BTC as the first block reward halving did not happen until November 28, 2012.

The last time this specific miner from 2010 appeared was on June 9, 2021. This year they spent 20 block reward strings on January 3, 2021 (Bitcoin’s 12th anniversary), January 10, 2021, January 25, 2021, February 28, 2021, March 23, 2021, and June 9, 2021.

That’s a total of 120 blocks, or 6,000 bitcoin, worth $252 million spent by what we assume is a single mining entity from 2010. In fact, we can say that the entity spent 78.94% of all the 2010 blocks spent this year (152 total). Because of this whale’s spends, the 2010 block reward spends in 2021 outpaced 2011 and 2012 block reward spends.

In 2021, there were approximately 85 block rewards from 2011 transferred from the original address. That’s 4,250 bitcoins total worth $178 million using today’s exchange rates. January and February 2021 saw the most 2011 blocks transferred this year.

Statistics from btcparser.com show that there were more 2011 blocks spent this year than the quantity of 2012 blocks. The aggregate total of 2012 block rewards moved in 2021 is currently 63 block rewards. Of the block rewards in the list of 2012 blocks, all of them were pre-halving minted which means they were issued before November 28, 2012.

63 block rewards with 50 BTC each is approximately 3,150 BTC or $132 million dollars’ worth at the time of writing. The number of 2013 blocks transferred in 2021 exceeded all of the 2010, 2011, and 2012 block reward spends this year.

2013 Block Spends Surpass Previous Three Years but the Transfers Moved Fewer Bitcoin

So far there have been 330 block rewards from 2013 spent during the course of 2021. That’s 30 more blocks than the 2010, 2011, and 2012 spends combined. However, because the 2013 blocks were spent after the first halving in November 2012, the transfers only moved 8,250 BTC this year ($347M).

That’s because miners in 2013 got 25 BTC instead of the 50 BTC reward that was given prior to the halving. All of the 2010, 2011, and 2012 spends combined (300 blocks) adds up to 15,000 BTC ($630M). Between block rewards moved from 2010, 2011, 2012, and 2013, an aggregate total of 630 block rewards was spent with 23,259 BTC worth $977 million today.

Crypto proponents have no idea who these miners are but they certainly mined a great quantity of bitcoin in the early days. It’s worth noting that the terms “spent” or “spend” in this article, do not necessarily mean that the bitcoins were “sold” to a third party for fiat or another crypto asset.

For this article, using Btcparser.com we parsed 21,519 addresses from 2009, 12,396 addresses from 2010, 3,598 addresses from 2011, 2,193 addresses from 2012, and 5,214 addresses from 2013. From a visual perspective, in this report we leveraged “The (Not) ‘Satoshi’s Bags’ Tracker” located on theholyroger.com. No block rewards from 2009 were spent in 2021 and the last time a 2009 block was moved was on May 20, 2020, when an entity spent a coinbase reward that was minted on February 9, 2009.

Speaking with the creator of Btcparser.com, he said that it was worth mentioning that sleeping wallets are not all alike. “For instance,” he said. “Whalealert thinks that every wallet that hasn’t made any outgoing transaction for the last few years is a sleeping one. In my opinion, those are not truly sleeping ones. Btcparser monitors only wallets that have never made any outgoing transfer. Thus we don’t know whenever someone has access to those bitcoins (knows the private key), so we call them virgins.” The blockchain parser’s creator added:

Every time the wallet loses its virginity, Btcparser removes it from the monitoring lists. So it might be that some wallets had 50 BTC, but moved only one. Our parser sends messages about that, it shows how much has been transferred, how much remained on balance and that’s it, this wallet won’t be monitored in the future.

What do you think about the $977 million in bitcoin moved from 2010-2013 block rewards in 2021? Let us know what you think about this subject in the comments section below.

Iran Shuts Down More Illegal Crypto Farms, Bringing Total to Over 5,300

11/09/2021 by Idelto Editor

Authorities in Iran are continuing their crackdown on unauthorized cryptocurrency mining as electricity demand remains high. The country’s power utility company has so far closed down more than 5,300 illegal mining facilities, seizing an enormous amount of coin-minting machines.

Power Utility Confiscates More Than 216,000 Mining Units From Unlicensed Miners in Iran

Preventing blackouts remains a priority in Iran where electricity consumption is still higher than usual. Cryptocurrency miners, the majority of which are operating without authorization, have been blamed for electricity shortages throughout the summer. The hot weather this year led to increased use of air conditioning while limited rainfall negatively affected hydropower generation.

The Iran Power Generation, Distribution and Transmission Company, Tavanir, is constantly tracking down illegal mining operations across the country. According to a recent report by the utility, the number of crypto farms the state-run entity has closed down has reached 5,380.

Tavanir also revealed it had seized 216,758 pieces of mining hardware, the English-language business daily Financial Tribune reported, quoting ISNA news agency. Its estimates show that the unlicensed facilities have a combined electricity consumption equal to that of 800,000 households, or two million people.

The power distribution company has previously claimed that illegal miners consume 2,000 megawatts of electrical energy daily. However, this figure was recently rejected by the Ministry of Industries, Mining and Trade which described it as “highly exaggerated” as such an amount would equal the power usage of 3 million mining devices.

Iranian government recognized cryptocurrency mining as a legal industrial activity in July, 2019. Authorities in Tehran introduced licensing for mining companies and the permits are issued by the Ministry of Industries. According to Tavanir, 56 authorized crypto mining farms need a total of 400 megawatts of electricity.

In May of this year, Iran imposed a temporary ban on all cryptocurrency mining to reduce its power deficit. Then, in August, Tavanir announced the restrictions will be removed for licensed miners on Sept. 22 in view of an expected decline in power demand towards the end of summer.

While the licensing regime has allowed dozens of mining entities to operate legally in the Islamic Republic, the government has raised their electricity rates to match export prices. Since April, authorized miners are charged 16,574 rials ($0.39) per kilowatt-hour, four times the initial tariff. At the same time, illegal crypto farms use subsidized energy intended for households and other industrial sectors.

Iranian power generating facilities produce approximately 60,000 megawatts of electrical energy from a total installed capacity of over 85,000 megawatts. According to Tavanir, the country’s power deficit amounts to at least 5,000 megawatts a day.

Do you think cryptocurrency miners are responsible for power shortages in Iran? Share your thoughts on the subject in the comments section below.