Kosovo Bans Crypto Mining Amid Energy Crisis

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Koso­vo has banned cryp­tocur­ren­cy min­ing in order to curb elec­tric­i­ty con­sump­tion amidst the country’s worst ener­gy cri­sis in a decade.

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

Energy crisis

Last month, the Koso­vo gov­ern­ment declared a 60-day state of emer­gency, intro­duc­ing pow­er cuts in the face of high import costs and pow­er plant out­ages. The coun­try of 1.8 mil­lion peo­ple imports over 40% of its con­sumed ener­gy, with elec­tric­i­ty demand for heat­ing hav­ing risen with the onset of the cold win­ter weather. 

How­ev­er, Euro­pean gas prices spiked by 30% this week due to con­cerns over a dimin­ished sup­ply from Rus­sia. Regard­ing domes­tic ener­gy pro­duc­tion, rough­ly 90% is derived from burn­ing the soft coal lig­nite, of which Koso­vo has the world’s fifth-largest reserve of 12–14 mil­lion tonnes.

Crypto mining hubs

Young peo­ple in Koso­vo have flocked to cryp­to min­ing in recent years, due to the country’s rel­a­tive­ly cheap cost of ener­gy. One local min­er with 40 GPUs told Reuters that the €2,400 per month he earned prof­it from min­ing only cost him €170 per month in elec­tric­i­ty. Min­ing had become par­tic­u­lar­ly pop­u­lar in north­ern Koso­vo, which is most­ly pop­u­lat­ed by Serbs who do not rec­og­nize the coun­try as being inde­pen­dent, and refuse to pay for electricity.

Fol­low­ing the vac­u­um left by the cryp­tocur­ren­cy ban intro­duced in Chi­na last year, the glob­al hash rate approached an all-time high last month, as Bit­coin min­ing had reset­tled in new coun­tries. Accord­ing to data from the Cam­bridge Cen­tre for Alter­na­tive Finance, a major­i­ty of min­ing activ­i­ty relo­cat­ed to the Unit­ed States, while the ban had also been a boon for new facil­i­ties in oth­er coun­tries offer­ing cheap sources of ener­gy, such as Ice­land, Nor­way and Canada. 

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