David Canellis

<div id="highlights-block_6272b7cc07d59" class="highlights">
 <ul>
 <li>Uzbekistan wants to inspire growth in its local crypto mining economy despite widespread energy outages earlier this year</li>
 <li>The government hopes charging miners a premium for energy pulled from the standard grid will hasten their switch to solar</li>
 </ul>
 
</div>



Uzbekistan hopes to shift crypto miners away from coal by legalizing the use of solar power within the heavily regulated local industry, <a href="https://www.reuters.com/business/finance/uzbekistan-legalises-solar-powered-crypto-mining-2022-05-04/" target="_blank" rel="noreferrer noopener">Reuters</a> reports, citing a presidential decree published this week.



The Central Asian nation will also waive income tax for both foreign and domestic crypto companies moving forward.&nbsp;



Under the mandate, local miners will pay double the price for electricity pulled from the standard energy grid. They also could face additional tariffs for use during periods of high demand.



Despite a lack of formal licensing, crypto mining outfits across the country are required to register with the new Uzbek National Agency for Perspective Projects. Uzbekistan legalized crypto trading in 2018, but just one exchange is currently licensed to operate — this is where local crypto miners sell the digital assets they generate.



The new regulatory framework will require crypto exchanges to perform know your customer (KYC) checks on crypto traders and keep the records for five years, <a href="https://www.coindesk.com/policy/2022/05/03/uzbekistan-publishes-crypto-regulation-framework-assigns-supervising-agency" target="_blank" rel="noreferrer noopener">CoinDesk</a> reported.



Proposed legislation from January 2020 would have developed a national mining pool, providing discounted electricity to member miners. However, it appears the new solar incentives supersede those intentions, with a mind to provide enough regulatory freedom to inspire growth in the local industry.



Indeed, the Tashkent government hopes the nation’s crypto industry will install and operate its own solar panels, taking pressure off the country’s struggling energy infrastructure.



<h3 class="wp-block-heading">Uzbekistan still reeling from bitcoin mining in neighboring Kazakhstan</h3>



The move is a response to power outages that struck the country and neighboring Kyrgyzstan earlier this year, after refugee bitcoin miners fled China for Kazakhstan en masse after Beijing’s blanket ban last June.&nbsp;



Kazakhstan’s power grid, on which Uzbekistan and Kyrgzstan’s business and residential sectors also rely, suffered extensively. Electricity, heat and gas services were widely disrupted, and government officials eventually blamed unprecedented surges in energy demands on crypto miners.&nbsp;



While no deaths were attributed to the outages, arrivals at Uzbekistan’s Tashkent International Airport were closed, hundreds were trapped in train cars, and dozens found themselves stuck in offline elevators and ski lifts, analysts at the Central Asia-Caucasus Institute &amp; Silk Road Studies Program <a href="https://www.cacianalyst.org/publications/analytical-articles/item/13709-did-cryptocurrency-miners-crash-the-central-asian-power-grid?.html" target="_blank" rel="noreferrer noopener">noted</a>. In a blog post, the researchers described crypto mining as “the straw that broke the camel’s back.”



All three countries were forced to purchase expensive power via an old Soviet energy grid to resolve the issues, despite the region’s abundant hydropower and carbon energy sources.



Kazakhstan had housed around 7% of Bitcoin’s hashrate in the leadup to China’s ban but was responsible for more than 18% just two months later, <a href="https://ccaf.io/cbeci/mining_map" target="_blank" rel="noreferrer noopener">according</a> to the Cambridge Bitcoin Electricity Consumption Index. This meant Kazakhstan was suddenly the second-biggest bitcoin mining country in the world, after the US.



Uzbekistan, by comparison, mines far less bitcoin. The country contributed just 0.05% of the total hashrate last August, although that could change now that crypto miners won’t pay income tax for the foreseeable future.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Crypto

Uzbekistan Wants Bitcoin Miners To Go Solar, Pay No Income Tax

Casey Wagner

<div id="highlights-block_62506ac4827ba" class="highlights">
 <ul>
 <li>Tesla will provide solar and storage technology to the Texas-based mine</li>
 <li>Blockstream will release a public dashboard with data on bitcoin mined and power output</li>
 </ul>
 
</div>



Jack Dorsey’s digital payments company Block, <a href="https://cms.blockworks.co/jack-dorseys-square-to-change-its-name-to-block/" target="_blank" rel="noreferrer noopener">formerly Square</a>, and bitcoin infrastructure provider Blockstream have announced a development in the partnership they first announced in June 2021. After enlisting help from Tesla, they have broken ground on a solar- and battery-powered bitcoin mine.&nbsp;



The West Texas-based bitcoin mine will use solar and storage technology from Tesla, Blockstream <a href="https://blog.blockstream.com/blockstream-and-block-inc-s-solar-mining-facility-now-powered-by-tesla-solar-pv-and-megapack/" target="_blank" rel="noreferrer noopener">announced</a> Friday. The facility will be powered by Tesla’s 3.8 megawatt solar PV array and 12 megawatt-hour <a href="https://www.tesla.com/megapack" target="_blank" rel="noreferrer noopener">Megapack</a>.



West Texas, known for its high number of <a href="https://www.currentresults.com/Weather/Texas/annual-days-of-sunshine.php" target="_blank" rel="noreferrer noopener">annual sunny days</a> and sufficient wind speed, has become a hub for renewable energy in the US.&nbsp;



The mine is expected to be completed later this year, according to Blockstream, which will provide the mining infrastructure for the facility.&nbsp;



The combination of Tesla photovoltaics and Megapack battery equipment will drive the 30 petahashes per second of mining hardware at the facility with 100% solar energy, Blockstream wrote in a blog post Friday.



Additionally, Blockstream said it would provide regular reports on the economics of the project through a publicly-accessible dashboard. The dashboard will display real-time metrics of the facility’s performance, including power output and bitcoin mined. The team plans for the dashboard eventually to include solar, storage performance data points and uptime metrics, according to Blockstream.&nbsp;



The project, first <a href="https://cms.blockworks.co/blockstream-and-square-partner-on-solar-powered-bitcoin-mine/" target="_blank" rel="noreferrer noopener">introduced</a> at the Bitcoin 2021 conference in Miami in June, is a $12 million initiative. Block said in June that it would be investing $5 million toward the mining facility as part of its broader goal to reach carbon neutrality by 2030.“



The project will serve as an ongoing, transparent case study that will allow us to all learn together the specific unit economics of clean energy bitcoin mining,” Neil Jorgensen, global ESG lead at Block, said in the June 2021 <a href="https://www.prweb.com/releases/blockstream_and_square_inc_join_forces_to_build_solar_powered_bitcoin_mine_in_the_us/prweb17985526.htm" target="_blank" rel="noreferrer noopener">release</a>. “We can’t wait to start sharing our results with the community.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Bitcoin mining

Blockstream and Block Enlist Tesla, Break Ground on Bitcoin Mine

<div id="highlights-block_60bbcb10f3f20" class="highlights">
 <ul>
 <li>Square will invest $5M in the facility and Blockstream will provide infrastructure for the project</li>
 <li>The project is also designed to be scalable so that Blockstream can add additional capacity and support more participants in order to expand renewable mining operations in the future</li>
 </ul>
 
</div>



Bitcoin 2021, Miami — Bitcoin infrastructure startup Blockstream is partnering with digital payments company Square to build an open-source, solar-powered bitcoin mining facility in the US. 



The companies hope to show how bitcoin mining can use renewable energy and help advance the transition to clean energy, Blockstream said in a <a href="https://www.prweb.com/releases/blockstream_and_square_inc_join_forces_to_build_solar_powered_bitcoin_mine_in_the_us/prweb17985526.htm" target="_blank" rel="noreferrer noopener">release</a>. 



“Many mining operations throughout the world, including our own, already rely on renewable energy because it is the most cost-effective power available,” said Chris Cook, chief information officer and head of Mining at Blockstream in the release. “Together with Square, we hope that the open and transparent nature of the project will become a model that other businesses can learn from.”&nbsp;



Square will invest $5 million in the solar-powered facility and Blockstream will provide infrastructure for the project. The facility will be a proof-of-concept and use only renewable energy. The economics of the build, including operational costs and ROI, will be made open to the public.



The mining project is also designed to be scalable, the companies said, enabling Blockstream to add additional capacity and support more participants in order to expand renewable mining operations in the future.



“The project will serve as an ongoing, transparent case study that will allow us to all learn together the specific unit economics of clean energy bitcoin mining,” said Neil Jorgensen, global ESG lead at Square, Inc., in the release. “We can’t wait to start sharing our results with the community.”



The news comes shortly after the digital asset industry came under fire from Tesla CEO Elon Musk for <a href="https://cms.blockworks.co/crypto-crash-when-musk-the-environment-tax-day-and-china-collide/" target="_blank" rel="noreferrer noopener">environmental concerns</a> associated with bitcoin mining.



However, industry advocates point to the amount of renewable energy already used for mining. MicroStrategy CEO Michael Saylor references the figure that bitcoin recycles 0.25% of the world’s <a href="https://cms.blockworks.co/zero-carbon-footprint-mining-new-growth-area-for-investors/" target="_blank" rel="noreferrer noopener">wasted energy</a> for mining. 



“I think Bitcoin is the most efficient use of energy the human race has come up with,” Saylor said during a panel discussion at the Bitcoin 2021 conference in Miami. “It takes wasted energy and creates prosperity and freedom.” 



Read more of our coverage from Bitcoin 2021 <a href="https://cms.blockworks.co/?s=Bitcoin+2021" target="_blank" rel="noreferrer noopener">here</a>.