Paper abstract:

This article focuses on the geopolitical issues of cryptocurrencies and the development of their mining industries in Central Asia. Cryptocurrency mining is a lucrative industry with a particular and shifting geography. The location of the activity is determined by the availability of resources (electricity) and technical or climatic characteristics, enabling the operation of computer processors that secure alternative financial networks, such as Bitcoin. In Central Asia, mining has been particularly developed in Kazakhstan, which has an important Soviet industrial legacy that has facilitated its development on a large scale. It increased from September 2021, with the relocation of a significant amount of computing power previously installed in China and banned by the Beijing authorities. In January 2022, Kazakhstan, Kyrgyzstan and Uzbekistan, which share an interconnected power grid dating back to the Soviet era, experienced a simultaneous power outage. Following this incident, Kazakhstani authorities pointed to energy-intensive cryptocurrency mining as the cause of the blackout, failing to mention the huge limits of regional power grid.

This presentation is based on field of research and interviews conducted in Kazakhstan and Kyrgyzstan between March and June 2022, with cryptocurrencies miners and regulators. The objective is to study the geography and location factors of cryptocurrency mining in the region, through the support of cartography. In addition, this study sheds light on the actors and power networks that have emerged around its development. Indeed, although Central Asian governments are now trying to regulate mining, it is developing in an opaque way with the help of some circles of power and security forces. This is because the local authorities have officially tried to strongly regulate mining, which in official discourse is the cause of the high tension on the regional electricity network. While mining does indeed consume a lot of electricity, its study highlights the significant limitations of an ageing and poorly maintained electricity production and distribution network that is no longer adapted to supplying an increasingly large population. Finally, cryptocurrency mining, which initially appeared as a threat to the power grid in the region, could emerge as a potential solution. Indeed, local initiatives are emerging to develop electricity production infrastructures, made profitable through mining. In Kyrgyzstan, private entrepreneurs mine bitcoins using hydroelectric stations that they build on mountain rivers and sell part of the electricity produced to the state. In May 2022, the government of Uzbekistan authorized solar-powered cryptocurrency mining.