After a series of blackouts, Kosovo has banned bitcoin mining
Image credit: Blockchain News
Kosovo has outlawed cryptocurrency mining in order to reduce electricity use as the country grapples with an energy crisis brought on by rising worldwide costs.
The government claims that security services will track down and shut down bitcoin mining operations.
Mining is an energy-intensive process that requires authenticating digital transactions in exchange for bitcoins.
Last month, the largest coal-fired power plant in the Balkan state was shut down due to a technical fault, requiring the administration to import electricity at exorbitant prices. The government was given authority to allocate more money for energy imports and enforce harsher controls on electricity usage after declaring a 60-day state of emergency in December.
Protests and requests for Economy Minister Artane Rizvanolli’s resignation have erupted in response to the blackouts.
Energy prices are soaring across Europe due to a variety of factors, including low Russian supplies and increased natural gas consumption as economies recover from the COVID-19 outbreak.
Kosovo has been struck harder than others by the energy crisis. According to government figures released last month, Kosovo imports 40% of its energy. Ms Rizvanolli announced on Tuesday that the administration has decided to prohibit so-called crypto mining in order to alleviate the effects of the global energy crisis.
Mining machine owners are compensated with newly created currency for contributing computer power to authenticating transactions on that network, making it a potentially lucrative exercise. However, it necessitates a massive amount of computer power, which in turn necessitates a massive quantity of electricity.
Kosovo had one of Europe’s cheapest electricity tariffs until recently. Crypto mining grew popular among Kosovo’s youth in this context.
The practice is most common in Kosovo’s northern regions, where ethnic Serbs refuse to pay their electricity bills because they do not recognise the country’s independence. Other countries, such as China and Iran, have tightened down on crypto mining due to concerns about the practice’s environmental impact. Iran announced a four-month moratorium last year after draining more than 2 GW per day from the grid.