Kazakhstan wants crypto miners to use power generated by excess oil field gas

Although acquiring cryptocurrencies is called mining, the process has little in common with extracting natural resources. Crypto mining requires large amounts of electricity to run specialised computers that solve complex mathematical equations in exchange for digital coins.

Kazakhstan's government is bringing the two together with a new project, where crypto miners will be able to use excess associated gas from oil fields to generate electricity at their own power plants.

Kazakhstan experienced a major crypto mining boom in 2021, exposing weaknesses in its ageing power infrastructure, much of which was built during the Soviet era.

The influx of crypto miners added pressure to the system, contributing to power shortages and blackouts in some areas.

In response, the government began restricting miners' access to electricity and later introduced an auction system, under which mining companies could purchase only surplus electricity through a dedicated platform. In practice, there was often little or no surplus available.

Combined with tax, licensing and other restrictions, the measures pushed many miners either out of Kazakhstan or into the grey market.

Last year, the government's approach began to shift, with authorities introducing incentives and programmes aimed at bringing legal crypto mining back to the country.