Landlocked Kosovo has officially banned cryptocurrency mining as it grapples with soaring energy prices and electricity blackouts
The heavy energy consumption associated with cryptocurrency mining has been thrust into the news headlines again this week.
The BBC reported that the balkan country of Kosovo, just to the south of Serbia, has officially banned cryptocurrency mining.
The country reportedly took the decision to ban the mining of cryptocurrencies as it battles energy crisis caused by soaring global prices.
The government of Kosovo has reportedly said that its security services will identify and clamp down on sources of cryptocurrency mining.
The BBC noted that all of Europe is currently facing sharp energy price rises, due in part to high demand, low supplies and military tensions with Russia – all of which is taking place amid economic aftershocks caused by the ongoing Coronavirus pandemic.
It seems that Kosovo is having to enforce rolling blackouts amid an electricity shortage in the country. This happened when its largest coal-fired power plant was shut down last month over a technical issue, forcing the government to import electricity at high prices.
Indeed, the country reportedly declared a 60-day state of emergency in December, which has given the government there the necessary powers to allocate more money for energy imports and impose stricter restrictions on power usage.
The blackouts have reportedly sparked protests and calls for the resignation of Economy Minister Artane Rizvanolli.
On Tuesday, Ms Rizvanolli reportedly said the government had decided to ban so-called crypto mining to mitigate the effects of the global energy crisis.
Until recently, Kosovo boasted one of Europe’s cheapest electricity rates. In this environment, crypto mining became popular among young people in Kosovo.
According to the BBC, the practice is particularly popular in northern areas of Kosovo, where ethnic Serbs do not recognise the state’s independence and refuse to pay electricity bills.
Kosovo is not the only country banning cryptocurrency mining.
Crypto mining has been cracked down in countries such as China and Iran for example.
It should be remembered that cryptocurrency mining uses large amounts of energy, much of it derived from the burning of fossil fuel.
Essentially this is because cryptocurrencies are created when high-powered computers compete against other machines to solve complex mathematical puzzles, a process known as mining.
At current rates, crypto mining uses about the same amount of energy annually as the Netherlands did in 2019, data from the University of Cambridge and the International Energy Agency has previously shown.
Then in October Cambridge University research found more data about the environmental costs of crypto mining, which currently consumes 0.45 percent of global electricity production, the research estimated.
It found that the US, Kazakhstan and Russia are now the top three producers of the Bitcoin cryptocurrency.
In June China began a crackdown on Bitcoin and other cryptocurrencies, which – like many other governments – it considers dangerous to financial stability and a means of laundering money.
As a result, the country’s share of Bitcoin mining has quickly fallen from a peak of more than three-quarters in September 2019.