Bitcoin: Kosovo bans crypto currency mining after energy squeeze

A European country has said it will scrap the law on crypto miners after the massive amounts of power needed for the task led to a crisis.

A European country has banned bitcoin mining because the large amounts of energy the process requires disrupts the power grid and contributes to blackouts.

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

The measure comes amid a state of emergency in the country – sandwiched between Serbia and Montenegro, Albania and North Macedonia – after the shutdown of the largest power plant due to a technical failure that drained supplies.

“All law enforcement agencies will stop the production of this activity in cooperation with other relevant institutions that will identify sites where cryptocurrency is being produced,” Economy and Energy Minister Artan Rizvanuli told Reuters in a statement.

While Kosovo cracks down on cryptocurrency mining, other countries have embraced it and boldly claim that they will build an entire city dedicated to the task.

Energy Stress Bans Bitcoin

Mining 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 cryptocurrency, this functionality is given to individual users – miners – who use their own devices to help with the task of maintaining the crypto on top of the board.

If their efforts pay off, these miners can get free coin as a reward.

Having all these bitcoin mining computers is incredibly energy intensive – and not great for the environment.

Electricity prices in Kosovo have been cheap in recent years which makes it an attractive place for cryptocurrency mining.

Reuters said it spoke to a miner in Kosovo who paid 170 euros a month for energy bills but earned 2,400 euros a month from mining.

But energy prices have recently risen in Kosovo after the shutdown of a power plant forced the import of more energy sources, such as gas.

In Europe, gas prices rose more than 30 percent as supplies from Russia, a major supplier, declined.

The state of emergency in Kosovo allows the government to impose strict measures to balance electricity demand, including blackouts.

You have decided that cryptocurrency mining consumes a lot of scarce resources now.

“These actions are aimed at addressing the potential unexpected or long-term shortage of electricity production, energy transmission or distribution capabilities in order to overcome the energy crisis without increasing the burden on the citizens of the Republic of Kosovo,” said Mr. Rizvanolli.

Nation to build an entire bitcoin city

Kosovo’s actions contrast sharply with some other countries that have embraced cryptocurrency mining.

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

President Najib Bukele submitted a legal tender for Bitcoin in El Salvador in 2021.

The city will be circular in shape in honor of the shape of the coin, he said, and will also feature a central plaza that looks like a bitcoin symbol from the air.

“Invest here and make all the money you want,” the president said at the Latin Bitcoin Conference in November, while wearing a backwards-facing baseball cap.

“Residential areas, commercial areas, services, museums, entertainment, bars, restaurants, airports, ports, railways – everything is for bitcoin.”

On the other hand, China has banned Bitcoin completely because it wants to make its own digital currency.

The communist regime is also believed to be uncomfortable about its lack of foresight or power over other cryptocurrencies.

“Theoretically, after the launch of the digital yuan, there will be no transaction that the regulatory authorities will not be able to see — the cash flows are fully traceable,” Xu Yuan, an analyst at Peking University’s Digital Finance Research Center told the South China Morning Post. He said last year.

Read related topics:Cryptocurrency