Bitcoin: Kosovo bans crypto currency mining after energy squeeze

A European nation has said it will lower the law on crypto miners after the large amount of power required for the task led to a crisis.

A European country has banned bitcoin mining because the large amounts of energy required by the process paralyze the power grid and contribute to blackouts.

The government of the Balkan state of Kosovo has said that security services will find those who continue to mine cryptocurrencies and prosecute them.

The action comes amid a state of emergency in the country, sandwiched between Serbia, Montenegro, Albania and North Macedonia, after its largest power plant was shut down due to a technical failure that has depleted supplies.

“All law enforcement agencies will stop the production of this activity in cooperation with other relevant institutions that will identify the places where there is production of cryptocurrencies,” Economy and Energy Minister Artane Rizvanolli told Reuters in a statement.

While Kosovo is cracking down on cryptocurrency mining, other countries have embraced it with one boldly claiming it will build an entire city dedicated to the task.

Energy restriction leads to bitcoin ban

The mining of cryptocurrencies, such as bitcoin, is the process by which the digital currency network is kept secure and transactions are validated.

Since there is no central bank for cryptocurrencies, this work is assigned to individual users, miners, who leverage their own hardware to help in the work of keeping cryptocurrencies on the table.

If their efforts pay off, these miners can receive free money as a reward.

Having all these computers mining bitcoin is incredibly energy intensive, and it’s not that good for the environment.

Electricity prices in Kosovo had been cheap in recent years, making it an attractive place to mine for cryptocurrencies.

Reuters said it spoke to a miner in Kosovo who had paid 170 euros a month in energy bills, but was making 2,400 euros a month in profits from mining.

But energy costs have recently skyrocketed in Kosovo after a power plant shut down that forced more energy sources, such as gas, to be imported.

In Europe, gas prices have soared by more than 30 percent as supplies from Russia, one of the main suppliers, fell.

The state of emergency in Kosovo allows the government to apply strict measures to level the demand for electricity, including power outages.

You have decided that cryptocurrency mining takes up too much of a now scarcer resource.

“These actions are intended to address the potential long-term or unexpected lack of electricity production capacities, power transmission or distribution capacities to overcome the energy crisis without further burdening the citizens of the Republic of Kosovo,” said Mr. Rizvanolli.

Nation to build the whole city of bitcoin

Kosovo’s actions contrast with those of other countries that have embraced crypto mining.

In November, the Central American nation of El Salvador announced that it would create a city dedicated exclusively to mining bitcoins.

President Nayib Bukele made bitcoin legal tender in El Salvador in 2021.

He said the city would be circular in shape as a tribute to the shape of a coin, and it will also feature a central plaza that would look like a bitcoin symbol from the air.

“Invest here and earn all the money you want,” the president said at the Latin Bitcoin conference in November while sporting an upside-down baseball cap.

“Residential areas, commercial areas, services, museums, entertainment, bars, restaurants, airport, port, railway, all dedicated to bitcoin.”

China, on the other hand, has banned bitcoin entirely as it wants to create its own digital currency.

The communist regime is also believed to be uneasy about its lack of knowledge or authority over other cryptocurrencies.

“In theory, after the launch of the digital yuan, there will be no transaction that regulatory authorities cannot see; cash flows will be fully traceable,” said Peking University Digital Finance Research Center analyst Xu Yuan, to the South China Morning Post. said last year.

Read related topics:Cryptocurrency


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