Another country has banned bitcoin mining due to an energy crisis

Another country has banned bitcoin mining due to an energy crisis

Many ranchers were forced to sell their bitcoin mining equipment after Kosovo announced restrictions on cryptocurrency mining.

From Facebook to Telegram, Kosovan crypto groups are being inundated with posts selling Bitcoin mining gear at low prices.

“They are selling their devices or trying to move to neighboring countries,” CryptoKapo, an investor and manager of some of the largest crypto communities in the region, told the Guardian.

The move comes after the Kosovo government’s year-end emergency announcement of a ban on all cryptocurrency mining. The ban is intended to defuse the energy crisis in the country.

Miners are targeting Kosovo because it has the cheapest electricity in Europe, in part because more than 90% of the country’s electricity comes from burning lignite reserves and government subsidies.

The number of crypto miners in Kosovo is said to have skyrocketed in recent years. Groups like Albanian Crypto Amateurs on Facebook and Crypto Eagles on Telegram have exploded with thousands of new members, although it remains unclear how many are mining or to what extent.

Latest calculations from the University of Cambridge show that global bitcoin mining consumes 125.96 terawatt hours of electricity per year, taking Norway (122.2 TWh), Argentina (121 TWh), the Netherlands (108.8 TWh) and the United Arab Emirates (113.20 TWh).

Meanwhile, in the final days of 2021 in Kosovo, power outages continued across the country. At the height of the crisis, the country had to import around 40% of its energy from the international market.

“We have provided 20 million euros for energy subsidies, i.e. tax money to subsidize electricity consumption. Cryptocurrency mining, on the other hand, consumes a lot of energy and is unregulated,” said Minister of Economy of Kosovo, Dr. Artane Rizvanolli.

In September 2021, China announced it would ban the cryptocurrency mining industry. In Iceland, the country’s national electricity company, Landsvirkjun, said it would turn down cryptocurrency miners.

On January 14, a US Congressional committee announced it would hold a hearing on the matter. US cryptocurrency miners are considered the top energy consumers, followed by Kazakhstan and Russia.

“It is time to understand and address the major environmental and energy impacts it is having on our communities and our planet,” said committee chairs Frank Pallone and Diana DeGette, who chaired the panel.

Alex de Vries, a Paris-based economist, estimates that only a quarter of the energy used in cryptocurrency mining is renewable.

Since the Kosovan authorities made the decision, police and customs officials have been conducting regular raids and seizing hundreds of bitcoin miners.

“There are many people who have invested in crypto mining equipment and the money they are spending is not small. People have even taken out loans to invest and the impact is very bad on their lives now,” CryptoKapo said.

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