Bitcoin Miners Start Turning From Kazakhstan To El Salvador

Penambang Bitcoin mulali angkat kaki dari Kazakhstan. (Kanchanara - Unsplash)

JAKARTA – Kazakhstan has become a new paradise for Bitcoin miners because it offers the lowest electricity costs and taxes in the world. How not, miners are only taxed at 20 cents per KWh in one month. The country offers an attraction for Bitcoin miners.

Especially after the Chinese government expelled Bitcoin miners. The miners finally decided to switch to Kazakhstan. However, it didn't last long. The reason is that the country suddenly experienced an energy crisis as a result of crypto mining.

Kazakhstan has recorded several blackouts, this condition forced the government to increase mining taxes and electricity tariffs. The mining tax increase is considered to have a negative impact on the mining industry.

Citing CryptoPotato, on April 14 the Minister of National Economy, Alibek Kuantyrov, said in a government briefing that his team was working on a tax plan that would link tax payments to the value of mined cryptocurrencies.

According to Kuantyrov's statement, first reported by ForkLog, this will help the state financially in tax collection, as it is interpreted as an increase in the state budget. However, this decision could lead many miners to look to other countries such as El Salvador, where the mining tax will be a fixed 10 percent to finance Bitcoin City construction and services.

“We are considering increasing the tax burden for miners, currently we are also considering linking the tax rate for miners to the value of cryptocurrencies. If the [value of] cryptocurrencies grows, it will be good for the budget.”

At first, Kazakhstan welcomed the miners with open arms. But that friendliness changed in the months that followed. In addition to raising electricity rates and taxes, the government is also reportedly closing various Bitcoin mining locations. They are also actively hunting down illegal miners who enter the country.

Denis Russinovich, a co-founder of Cryptocurrency Mining Group (CMG), a company operating since 2017 in Kazakhstan, said that from one moment to the next, the country “went from being a hero to nothing,” thus condemning the regulatory action. implemented by the government.

Alan Dorjiyev, Director of the National Association of Blockchain Industry and Data Center of Kazakhstan, told local news outlets that the government is considering an energy tax levy that correlates with the price of bitcoin.

“A gradation is being considered: for example, up to US$40,000 [bitcoin price] one tax, over US$40,000 another tax and so on. But this is still in the discussion stage.”

Currently carrying out mining activities domestically can be somewhat counterproductive, considering that at any time, electricity tariff increases can be announced, especially the repeated blackouts experienced by miners since January in many locations. This situation is claimed to have not been fully recovered.