How to earn on cryptocurrency in Kazakhstan

Arrived miners increased the load on the electric grid of the Republic of Kazakhstan. In the republic there was a shortage of energy to supply the population. To avoid a catastrophe, the authorities limited the total amount of electricity consumed by miners to 100 megawatts (MW). At the same time, the national operator KEGOC began to interrupt the supply of cryptocurrency mining farms during peak hours.

From January 1, 2022, the company raised the price of 1 kWh by ₸1 (approximately ₽0.17) for miners. Therefore, many players decided to move from Kazakhstan to Russia and the United States. This was reported by Denis Rusinovich, co-founder of Cryptocurrency Mining Group (CMG) and Maverick Group.

However, it is possible to earn on mining digital coins in Kazakhstan. The only problem is the decrease in overall profitability.

Equipment for the farm

For mining virtual currencies using the Proof-of-Work consensus algorithm, you can use different computer equipment, such as:

• Processors (CPUs). These devices are the main cores of personal computers. Processors perform the bulk of a PC’s work. In the early days of virtual assets in 2009-2010, only CPUs were used for mining. However, over time, processors have become inefficient.
• Graphics cards (GPUs). These devices are the graphics processors of a PC. In a computer they are used for rendering – rendering (processing) an image and displaying it on the monitor. Miners have been using GPUs to mine digital money since the end of 2010, because within the scope of the task, video cards were about 5 times more efficient than CPUs.
• Asics (ASIC). This computer hardware is based on special chips programmed to perform only one task – to mine cryptocurrency according to a set hashing algorithm, such as SHA-256 (the encryption mechanism of Bitcoin and some other coins). ASIC – expensive equipment, but the price is justified by high efficiency. Asicam found application in virtual money mining only in 2012.

Choose equipment for mining should be selected according to several parameters:

• The total amount of electricity consumed per hour (kWh).
• The power of the equipment (MH/s or TH/s).
• The benefit of mining a particular coin.

Calculation of electricity costs

To calculate the profit from mining virtual coins, you first need to determine the total kWh consumption of the equipment. This indicator is considered fundamental, because on its basis it is calculated not only the profitability of mining, but also the payback period of the crypto farm.

To calculate the total electricity consumption, you need to understand how many kWh each component of the system requires. These indicators are worth considering on the example of a small mining farm. The equipment used, its cost and the amount of energy consumed are presented in the table.

The equipment used in this example consumes a total of 1.54 kilowatts per hour.

Calculating the payback of a crypto farm

Based on electricity costs, you can calculate the monthly profitability of the mining equipment and the period for which the total profit will exceed the initial cost of buying components. The step-by-step algorithm of actions is presented on the example of Ethereum:

1. Gather information about the hash rate (number of calculations per second) of the equipment. These figures are 90 MH/s for GeForce RTX 3080 and 55 MH/s for GeForce RTX 3070. The total hash rate of the crypto farm components from the example is 345 MH/s.
2. Find information about electricity taxes in the region of Kazakhstan, where the equipment is located. For the example, the average tariff in Kazakhstan is ₸19.13 ($0.044 at the current exchange rate).
3. Use the ETH mining profitability calculator. In the program, you need to enter the received data (hash rate, tariff and total energy consumption) and click the “Calculate” button. As a result, the profitability of the mining farm is calculated. The components from the example together bring $19.33 (₽1424 at the exchange rate as of February 2022) of net profit per day.
4. Calculate the payback period of the crypto farm. To do this, divide the amount of equipment costs by the profitability of mining.

At the beginning of 2022, the purchase of components from the example will cost ₽716,300. Then the payback period of the crypto farm will be 716,300 (sum of costs) / 1,425 (daily profit) = 503 days.

Useful tips

To ensure stable earnings on cryptocurrency in Kazakhstan, you need to mine and store digital assets without violating the laws of the country. It is recommended to register as a legal entity under the regulations of the MFCA. Then the citizen will be able to obtain an official authorization for mining and use of coins.

Some participants of the cryptocurrency community believe that Kazakhstan plans to legalize digital assets in the future.

According to market players, Law No. 347-VI is a preparation for new legislative acts. However, there are no obvious prerequisites for the legalization of digital assets in Kazakhstan in early 2022.

It is also recommended to choose computer equipment and coins for mining more carefully. For example, at the beginning of 2022, GPU is advantageous to use for mining Ethereum, not Bitcoin. Video cards do not have enough power to bring the farm owner a profit from BTC mining. This cryptocurrency should be mined using ASIC equipment. It is much more powerful than video cards and consumes less electricity.

Conclusions

The cryptocurrency market provides great opportunities for earning. However, the laws of states often restrict investors. This is what happened in Kazakhstan. In the summer of 2020, the government approved Law No. 347-VI. It prohibited the use of virtual money in the country. Nevertheless, mining remained an authorized activity.

There is also a second jurisdiction on the territory of the Republic of Kazakhstan – the Astana International Financial Center (AIFC or AIFC). In its legal field, the use of digital money is officially authorized. AIFC even provides legal entities with cryptocurrency exchange services to exchange and trade coins.

In November 2021, Kazakhstan entered the 2nd place in the world in Bitcoin mining. This happened after a ban on mining in China. However, later, due to the shortage of electricity, the RK authorities limited the scope of virtual money mining.

The cryptocurrency community believes that the government of Kazakhstan plans to legalize digital assets in the future and is already preparing the infrastructure for this from 2022. However, the assumptions have not been officially confirmed in early 2022.

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