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America January 3, 2022 2 mins read

Kosovo Bans Cryptocurrency Mining Amid Soaring Energy Global Prices

America ı By Rochdi Rais

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Kosovo by Mrika Selimi Via Unsplash

Kosovo has officially banned the mining of cryptocurrencies to control electricity use across the country, as it struggles with an energy crisis following the soaring global prices.

The government stated that security officials will identify and crack down on sources of cryptocurrency mining. The process of mining cryptocurrencies is highly energy-intensive. It involves solving complex mathematical equations by the computer, and this results in high electricity consumption.

Although this only applies to cryptos that rely on the proof-of-work model during the mining, it would be hard for the authorities to identify which miners are mining what. Therefore, it would be safer to completely ban the mining process instead.

Kosovo isn’t the only one grappling with sharp price increases. In fact, all of Europe is having the same problem. But, Kosovo’s case is a bit more complicated, since the country is facing blackouts amid an electricity shortage.

The Balkan state’s largest coal-fired power plant was shut down last month citing technical issues. The government was consequently forced to import electricity at very high prices.

In December, the country declared a 60-day state of emergency, which gave the government the authority to allocate more money for energy imports and impose stricter laws on power usage.

As the energy crisis spread across Europe, Kosovo has been one of the most damaged. Last month, the country’s official said that Kosovo was importing 40% of its consumed energy. Ms. Rizvanolli said the government had decided to ban crypto mining to allow for better distribution of energy.

Mining cryptocurrencies could rely on hundreds if not thousands of computers and mining rigs that compete in solving math problems. Mining Bitcoin for instance involves connecting mining rigs to the currency network on the blockchain.

Concerned about the environmental impact of the practice, other countries such as China and Iran have cracked down on crypto mining. Last year, Iran announced a four-month ban because it was draining more than 2GW from the grid each day.

 

 

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Rochdi Rais

Rochdi Rais is the Head of Growth and financial and legal writer at USA Herald. He has been writing and editing financial, legal and U.S. news for years with over +4000 articles published during his career.

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