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Kosovo bans Bitcoin mining as energy crisis sweeps Europe

Kosovo joins Kazakhstan, Iran, and Iceland in imposing restrictions on Bitcoin mining due to overloaded energy grids.

The post Kosovo bans Bitcoin mining as energy crisis sweeps Europe appeared first on Protos.

Kosovo has banned Bitcoin and cryptocurrency mining in a bid to taper energy costs and power outages, reports Reuters.

The move, announced Tuesday, came with a promise from the government’s energy minister that authorities will be watching for rule-breakers.

Kosovo joins Kazakhstan, Iran, and Iceland in imposing restrictions on Bitcoin mining due to overloaded energy grids.

Disruption at Kosovo’s largest power plant (one of only two) and the rising costs of imported energy means the small Balkan country is struggling to meet demand ahead of a long winter.

Kosovo’s two fossil-fuel power plants would normally provide 90% of the country’s energy needs. However, the recent crisis means up to 40% of its current supply is imported from other markets.

Although, rising energy costs across Europe mean emergency funds slated to support imports don’t stretch very far.

Indeed, Kosovo’s government enacted other emergency measures last month, but the country still contends with its worst energy crisis in a decade.

  • On December 24, the government announced a 60-day state of emergency.
  • The Technical Committee on Emergency Measures for Energy Supply was established on the same day.
  • A week later, the Committee recommended a ban on crypto mining to relieve pressure on the power grid.

At the time, Kosovo’s minister for economy and energy Artane Rizvanolli said (via Gazeta Express):

“These actions are aimed at addressing potential unexpected or long term lack of electricity production capacities, capacities of transmission or distribution of energy in order to overcome the energy crisis without further burdening the citizens of the Republic of Kosovo.”

According to Kosovo Prime Minister Albin Kurti, 1 MWh is over 600% more expensive than last year, rising from €70 ($79) to more than €515 ($584).

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Kosovo boasts burgeoning Bitcoin scene

The rise in Bitcoin mining has been largely attributed to Kosovo’s younger population.

Prior to Tuesday’s announcement, Kosovars powered Bitcoin mining rigs legally with some of the cheapest energy in Europe — around €0.06 ($0.068) per kWh.

One anonymous miner told Reuters they’d generated around €2,400 ($2721) worth of crypto for an energy bill of just €170 ($193).

While some crypto miners enjoyed a period of profit, non-crypto mining Kosovars and business owners have suffered.

Kosovo’s energy grid is powered by burning a form of coal called lignite; the world’s fifth-largest supply can be found in the tiny country. The only problem is, Kosovo isn’t able to burn it all.

On December 15, a shutdown at Kosovo’s largest power plant cut central heating in parts of the capital city Pristina.

Kosovo relies heavily on its two coal-powered power plants.

Read more: [Coal and taxes: Bitcoin miners have a new home in Kazakhstan]

The following week, Kosovo Energy Distribution Systems (KEDS) introduced two-hour power cuts until further notice.

As a result, Kosovars have been forced into alternative methods of heating homes and powering businesses.

But associated costs have risen exponentially as citizens rely on portable generators to backfill the lack of federally-produced energy.

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Kosovo bans Bitcoin mining as energy crisis sweeps Europe Blockchain CoinGenius Hosts Virtual Crypto Event The Road To Mass Adoption

“I usually pay around €300 ($340) for my electricity bill but now I am spending €100-110 ($113-125) per day to buy diesel for the generator,” said one bakery owner (via Reuters).

China caused Bitcoin migration across Europe

A similar story came out of Iceland last month. The country’s largest energy distributor refused power to Bitcoin miners and other industries after power station malfunctions and a reduced renewable energy supply.

And in November, Kazakhstan lent on Russia to keep up with newly-arrived Bitcoin miners displaced by Beijing’s anti-crypto policies.

China once dominated the Bitcoin hashrate with miners making use of easy access to ample (and cheap) renewable energy.

A country-wide crackdown last year saw communities of China-based miners migrate to other parts of the world.

Still, some reports suggest that illicit Bitcoin miners in China could still control around 20% of the cryptocurrency’s hashrate despite the blanket ban.

Follow us on Twitter for more informed crypto news.

The post Kosovo bans Bitcoin mining as energy crisis sweeps Europe appeared first on Protos.

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Source: https://protos.com/kosovo-bitcoin-mining-ban-energy-crisis-sweeps-europe/

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Kosovo bans Bitcoin mining as energy crisis sweeps Europe Blockchain CoinGenius Hosts Virtual Crypto Event The Road To Mass Adoption
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