By early 2025, Kazakhstan’s power grid was on the edge. Cities like Almaty and Nur-Sultan were rolling blackouts every other week. In rural areas, people waited hours for electricity to come back on after outages that lasted all day. The reason wasn’t just aging wires or winter storms. It was crypto mining.

Kazakhstan had become the second-largest hub for Bitcoin mining in the world after the U.S. in 2022. When China cracked down on mining in 2021, thousands of rigs moved across the border. They didn’t bring jobs or innovation. They brought massive, constant power drains - 24/7, year-round. By 2023, crypto mining was using over 4.5 billion kWh of electricity annually. That’s more than the entire annual consumption of Latvia or Croatia. And it was all happening on a grid built in the 1970s.

The Grid Was Already Failing

Kazakhstan’s power system wasn’t broken because of crypto. It was already crumbling. Over one-third of its 220 power plants were 70-90% worn out. Transmission lines in the south and west had losses as high as 18% - meaning for every five kilowatts sent, nearly one vanished before reaching homes. In Oral, a city in the north, engineers reported losing 18% of their output just from old transformers and corroded cables. The national grid operator, KEGOC, knew this. But no one had the money or political will to fix it.

Then the miners arrived. They didn’t ask permission. They didn’t pay fair rates. They just plugged in. Many connected directly to regional substations, bypassing meters. Some used illegal connections. Others paid local officials to look the other way. The Ministry of Energy estimated that by 2023, up to 30% of the electricity consumed by miners was unmeasured - essentially stolen from the grid.

The Breaking Point

In December 2023, temperatures dropped to -35°C across western Kazakhstan. Homes turned on heaters. Factories kept running. And the miners? They kept mining. The grid couldn’t handle the load. In Pavlodar, a major industrial city, transformers exploded. Power lines melted. For three days, 1.2 million people had no electricity. Schools closed. Hospitals ran on generators. The government declared a state of emergency.

That’s when the Ministry of Energy made its move. On January 15, 2024, they announced a temporary ban on new crypto mining licenses. By March, they extended it to all existing operations. Miners had to either shut down or prove they were using only renewable energy - and even then, only if they paid double the standard tariff.

It wasn’t a full ban. It was a chokehold. The goal wasn’t to kill crypto mining forever. It was to force miners off the aging grid and onto new, dedicated lines - or out of the country entirely.

Who Got Hit the Hardest?

The miners who left weren’t just big Chinese firms. Many were local entrepreneurs who’d bought second-hand ASIC rigs for $2,000 and set them up in garages. One man in Karaganda told reporters he’d spent his life savings on 120 mining rigs. He hired three people to watch them. He paid $1,200 a month in electricity - before the price hike. When the ban hit, he sold everything for scrap metal. His profit? Zero.

But the real victims were ordinary families. In 2024, electricity prices jumped 50% compared to 2023. The government said it was to fund grid repairs. But the money didn’t reach the villages. In the Atyrau region, where oil and mining overlap, people started rationing power. One grandmother said she only used her electric stove once a week - to boil water for tea. The rest of the time, she cooked on a gas stove she’d bought in 1998.

The Renewable Promise - And the Reality

Kazakhstan says it’s building three 1-gigawatt wind farms. It’s investing over $2.6 billion in solar and wind. The plan sounds bold. But here’s the catch: those projects won’t be online until 2027 at the earliest. Meanwhile, the grid still relies on coal for 65% of its power. Coal plants can’t ramp up or down quickly. They’re like giant steam engines - once they’re on, they stay on. That makes it impossible to balance intermittent solar and wind.

Even if renewables were ready, most households can’t afford rooftop solar. A 5-kilowatt system costs $5,000. The average monthly wage in Kazakhstan? $550. The government offers no subsidies. No tax breaks. No loans. So while the law says “net metering” is allowed, no one can actually use it.

What Happened to the Miners?

Most left. Some went to Russia. Others to Georgia and Azerbaijan. A few moved to Uzbekistan, which is quietly building its own crypto mining industry with cheaper, more reliable power. A handful stayed - but only if they could prove they were using wind or solar. One company in the Mangystau region now runs its entire operation off a 10-megawatt solar farm it built next to its warehouse. It’s the only one in the country doing it legally.

But even that’s a gamble. The solar farm only produces power during daylight. At night, they still draw from the grid - and now, they pay 2.5 times the normal rate. Their profit margins are razor-thin. One operator told me: “We’re not mining Bitcoin anymore. We’re mining survival.”

The Bigger Picture

Kazakhstan’s story isn’t just about crypto. It’s about what happens when a country with a broken infrastructure gets flooded with demand it can’t handle. The miners didn’t cause the grid’s collapse. But they exposed it. They forced the government to choose: keep letting miners drain the system, or risk angering thousands of small business owners and families who depended on them.

The government chose control. They didn’t fix the grid. They just turned off the biggest load. And now, they’re hoping the world forgets about Kazakhstan as a mining hub. But the underlying problems remain. The transformers are still old. The lines still leak. The coal plants still burn. And the people? They’re still paying for it.

What’s Next?

Kazakhstan plans to connect to the CASA-1000 energy project by 2028, which will let it export surplus power to Afghanistan and Pakistan. But that won’t help its own citizens unless the internal grid is fixed. The North-South HVDC Line - a 2,000 MW transmission project - is supposed to be finished by 2029. But construction has already been delayed twice. The last update from KEGOC? “Work continues under budget constraints.”

Meanwhile, crypto mining is slowly coming back. Not as a flood. But as a trickle. Miners are now using smaller, more efficient rigs. They’re running them in warehouses with their own backup generators. Some are even buying diesel generators and running them at night - when electricity is cheaper. It’s inefficient. It’s dirty. But it’s legal. For now.

Kazakhstan didn’t ban crypto mining because it’s evil. It banned it because the grid was dying. And when a country’s power system fails, it doesn’t matter what you’re powering. You’re still left with blackouts, broken lives, and a future that’s harder to build.