CES is happening in Vegas right now, technically, and I'm not going to write about it. Half the exhibitor list pulled out over Omicron (Amazon, Meta, Twitter, Pinterest, T-Mobile all bailed on the physical show), attendance is something like a quarter of a normal year, and every single tech outlet on earth is already cranking out fourteen posts a day about robot vacuums and 8K TVs nobody needs. You don't need post fifteen from me. Go read literally anywhere else for that.
What I've actually been watching this week is a lot weirder and, I'd argue, more interesting: Kazakhstan turned off the internet for its entire country, and it's messing with Bitcoin.
Quick background if you missed it. Fuel prices spiked at the start of the year (the price cap on LPG, which a huge chunk of Kazakh drivers use, got lifted and roughly doubled overnight), protests broke out in the west of the country and spread fast, the government resigned, a state of emergency got declared, and by the evening of January 5th NetBlocks and a few other monitoring outfits were reporting a near-total nationwide internet blackout. Not "some sites are slow." Off. Mobile data, most fixed broadband, gone.
Normally that's a human rights story and a censorship story, and it is, obviously, first and foremost that. People trying to reach family, journalists trying to file, all of it happening in the dark, literally. But there's a second-order effect that's very specifically a tech story, because Kazakhstan isn't just some country, it's become one of the biggest Bitcoin mining hubs on the planet. After China banned mining outright back in mid-2021, a ton of that hash power didn't disappear, it just moved, and a big chunk of it landed in Kazakhstan because electricity there is cheap and the government was, until approximately last week, pretty welcoming about it. Cambridge's mining map had Kazakhstan at something like 18% of global hash rate as of last August, second only to the US.
So when the internet goes dark across an entire country that's hosting a fifth of the world's mining rigs, you'd expect the global hash rate to notice, and it did. It's not some catastrophic collapse, the network doesn't care about any single miner's feelings, difficulty just adjusts eventually and everyone else picks up slack. But watching the hash rate charts this week has been genuinely fascinating in a way that CES coverage just isn't. It's this very physical reminder that "the cloud" and "the blockchain" are actually just a few hundred thousand very loud fans spinning in warehouses that are plugged into a specific electrical grid, in a specific country, with a specific government that can, apparently, just flip a switch.
I'll be honest, my opinion on crypto mining in general hasn't budged an inch and this week didn't change it — it still seems like an enormous amount of electricity spent so people can watch a number go up and down, and the fact that the industry's response to China banning it was "great, let's go find another country with cheap power and not think too hard about why it's cheap" tells you basically everything about how much anyone in that space thinks ahead. But I don't think you need to like Bitcoin to find this genuinely interesting as an infrastructure story. It's a good reminder that a lot of what we casually call "decentralized" still routes through a very small number of actual buildings sitting on actual power lines in actual countries, and those countries have their own stuff going on that has nothing to do with crypto at all.
Also, completely unrelated tangent, my brother has three rigs running in his garage in Ohio right now (don't ask what that's doing to his electric bill, I did ask and he wouldn't tell me) and he texted me Wednesday night just to say "hash rate's up, less competition, nice." Which, sure. Somebody's family is in the middle of a curfew and a communications blackout and somewhere in Ohio that's registering as a minor efficiency win. I don't have a tidy conclusion about that, I just think about it a lot.
Bitcoin itself dipped under $43k at one point this week too, though with the Fed minutes also coming out and spooking growth stocks generally, I wouldn't pin that one on Kazakhstan alone. Markets rarely have one cause. Anyway. Back to your regularly scheduled CES posts, elsewhere.