RIYADH: Bitcoin, the leading cryptocurrency internationally, traded lower on Sunday, falling by 0.18 percent to $41,620 at 5:12 p.m. Riyadh time.
Ether, the second most traded cryptocurrency, was priced at $3,098, down by 3.24 percent, according to data from Coindesk.
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Political turmoil in Kazakhstan is hitting the Bitcoin mining industry after internet and communications were cut off.
Internet and telecommunications were cut nationwide, which is having an impact on local cryptocurrency mining operations, which are among the largest in the world.
Kazakhstan emerged as a popular mining hub last year, after China cracked down on the activity to protect the country’s efforts to reduce carbon emissions.
Mining requires high-powered computers to solve complex mathematical puzzles to create a new block on the blockchain, consuming a lot of electricity in the process.
Kazakhstan, with its rich energy resources, has become an attractive alternative to China for miners.
The former accounted for more than 18 percent of the global Bitcoin network hashrate in August last year, the latest month for which data was available, according to the Cambridge Centre for Alternative Finance.
Hashrate refers to the total computational power that is being used to mine cryptocurrency, according to CoinDesk.
It remains unclear when Internet services will be restored in Kazakhstan, which makes it difficult to know how deep the impact will be felt by crypto miners.
Connectivity had been shut for 36 hours as of Friday morning, according to internet monitor Netblocks.
Just a few hours into the internet blackout, the hashrate saw a 12 percent fall, Larry Cermak, the vice president of research at crypto website The Block, tweeted.
Kazakhstan is struggling to cope with the huge demands on its energy grid due to the rise in crypto mining, the Financial Times reported.
The power shortage in November also led to the shutdown of a large crypto-mining farm.
Scam
Pakistan’s Federal Investigation Agency (FIA) has uncovered a cryptocurrency investment scam that allegedly cost Pakistani citizens about 17.7 billion rupees (about $100 million).
The country’s main law enforcement agency has also issued a notice to crypto exchange Binance regarding the scam, media reports revealed, Bitcoin.com reported.
Providing details on the case, Imran Riaz, director of the FIA cybercrime wing, said on Friday that the organizers used cryptocurrency.
“We launched a probe after receiving complaints regarding a fraud involving billions of rupees being committed using nine online applications,” Riaz said.