A European nation has said it will lower the crypto miners law after the large amounts of energy needed for the task led to a crisis.
A European country has banned bitcoin mining because the large amounts of energy the process requires cripples the power grid and contributes to blackouts.
The government of the Balkan state of Kosovo said the security services would find those who continued to mine cryptocurrency and pursue them.
The action comes amid a state of emergency in the country – sandwiched between Serbia, Montenegro, Albania and North Macedonia – after the closure of its largest power plant due to a technical fault which has exhausted supplies.
“All law enforcement agencies will stop production of this activity in cooperation with other relevant institutions that will identify locations where there is cryptocurrency production,” said the Minister of Economy and of Energy, Artane Rizvanolli. Reuters in a report.
As Kosovo tackles cryptocurrency mining, other countries have embraced it, with one boldly claiming that it will build an entire city dedicated to the task.
Energy squeeze leads to bitcoin ban
Mining of cryptocurrencies, such as bitcoin, is the process by which the digital currency network is secure and transactions are validated.
Since there is no central bank for cryptocurrencies, this job is left to individual users – miners – who mine their own hardware to help keep the crypto above the edge.
If their efforts are successful, these miners may receive free currency as a reward.
The fact that all of these computers are mining bitcoin is incredibly power hungry – and not so good for the environment.
Electricity prices in Kosovo have been cheap in recent years, making it an attractive place to mine for cryptocurrencies.
Reuters said it spoke to a Kosovo miner who paid 170 euros per month in energy bills, but was making 2,400 euros per month in profit from mining.
But energy costs recently skyrocketed in Kosovo after a power plant closed forcing the import of more energy sources, like gas.
In Europe, gas prices have climbed more than 30 percent as supplies from Russia, a major supplier, were cut.
The state of emergency in Kosovo allows the government to apply strict measures to equalize demand for electricity, including blackouts.
He decided that cryptocurrency mining was taking up too much of a now scarce resource.
“These actions aim to remedy the potential unexpected or long-term lack of electricity production capacities, transmission capacities or energy distribution in order to overcome the energy crisis without further weighing down the citizens of the Republic of Kosovo”, Mr. Rizvanolli said.
Nation to build the whole bitcoin city
Kosovo’s actions contrast sharply with those of other countries that have embraced cryptocurrency mining.
In November, the Central American nation of El Salvador announced it would create a city devoted solely to mining bitcoin.
President Nayib Bukele made bitcoin legal tender in El Salvador in 2021.
He said the city will be circular in shape in homage to the shape of a coin, and will also feature a central plaza that looks like a bitcoin symbol from the sky.
“Invest here and earn all the money you want,” the president said at the Latin Bitcoin conference in November while sporting a back-facing baseball cap.
“Residential areas, shopping areas, services, museums, entertainment, bars, restaurants, airport, port, railroad – anything that is devoted to bitcoin.”
China, meanwhile, has banned bitcoin outright because it wants to create its own digital currency.
The Communist regime is also believed to be uncomfortable with its lack of insight or authority over other cryptocurrencies.
“In theory, after the digital yuan is launched, there won’t be a transaction that regulators can’t see – cash flows will be fully traceable,” said Xu Yuan, analyst at the Financial Research Center. Peking University Digital, to the South China Morning Post. said last year.