For bitcoin lovers Kosovo With a light-hearted approach to risk, it’s been a good week to come to an agreement on computer equipment that can create or “mine” cryptocurrencies.
From Facebook to Telegram, new posts by online crypto groups in the region have been dominated by frustrated Kosovars trying to sell their mining equipment – often at low prices.
“There’s a lot of panic and they’re selling it or trying to move it to neighboring countries,” said crypto Kapo, a crypto investor and administrator of some of the largest online crypto communities in the region.
The frantic social media action comes after the Kosovo government announced an immediate (albeit temporary) ban on all crypto mining activities at the end of the year as part of emergency measures to ease the severe energy crisis.
Bitcoin and other cryptocurrencies are created or “mined” by high-performance computers that compete to solve complex mathematical puzzles, a highly energy-intensive process that rewards people for the computing power they provide.
The motivation to get involved in the mining game in Kosovo, one of Europe’s poorest countries, is obvious.Cryptocurrencies are currently trading at over £31,500 per bitcoin, while Kosovo has the cheapest energy in the world Europe That’s partly because more than 90 percent of domestic energy production comes from burning the country’s abundant reserves of lignite, a low-grade coal, and government-subsidized fuel costs.
The largest crypto mining is thought to take place in the north of the country, where the Serb-majority population refuses to recognize Kosovo as an independent country and therefore has not paid electricity bills for more than 20 years.
There’s plenty of money to be made — and it’s making money when energy supplies are plentiful. The number of people mining cryptocurrencies in Kosovo is thought to have skyrocketed in recent years. Groups like Albanian Crypto Amateurs on Facebook and Crypto Eagles on Telegram have surged thousands of new members, but it’s unclear how many people are mining cryptocurrency, or how large.
But the good times seem to be over — at least for now — and developments in Kosovo highlight a major question for the future of bitcoin and other such digital currencies.
The latest calculations from the University of Cambridge Bitcoin electricity usage index Indicates that global Bitcoin mining consumes 125.96 TWh of electricity per year, which is higher than Norway (122.2 TWh), Argentina (121 TWh), the Netherlands (108.8 TWh) and the United Arab Emirates (113.20 TWh).
Meanwhile, Kosovars are in the dark for the final days of 2021 as a combination of domestic and international factors cause energy shortages and rolling blackouts across the country. At the height of the recent crisis, the unexpected closure of one of Kosovo’s two aging power plants left Kosovo importing about 40 percent of its energy on the international market — prices soaring — and the government was forced to provide emergency subsidies to help meet costs.
Kosovo Economy Minister Dr Artane Rizvanolli said the ban was a “no-brainer”.
“We have set aside 20 million euros to subsidize energy, which may not be enough, this is taxpayer money that will be used to subsidize electricity consumption,” she said. “On the other hand, we have crypto mining, which is a highly energy-intensive activity that is not regulated.”
Kosovo is not alone. Last September, 10 of China’s most powerful regulators vowed to kill what was then the world’s largest cryptocurrency mining industry.
In Iceland, the country’s national electricity company, Landsvirkjun, has said it will Reject potential cryptocurrency miners As the country is experiencing power shortages.Last week, a strong US Congressional Committee It was announced that a hearing would be held on the issue. U.S. cryptocurrency miners are considered the largest energy consumers, followed by Kazakhstan and the Russian Federation.
“Now is the time to understand and address the enormous energy and environmental impact it has on our communities and the planet,” said committee chair Frank Pallone and head of its oversight group Diana Degate.
Paris-based economist Alex de Vries said his preliminary estimates in a paper published later this year suggest that only a quarter of the energy used by miners is renewable. : “The real question is: What do you get in return for this?”
Jason Deane, chief bitcoin analyst at Quantum Economics, said he believes bitcoin has many advantages, including providing instant, almost free financial transactions without the use of third parties, and immediate settlement is certain to be achieved, and the current early days need to be viewed in perspective problem.
Since the Kosovo authorities’ decision, police and customs agents have launched regular raids, seizing hundreds of pieces of hardware.
While the 60-day energy emergency remains in place, the prospect of looming regulation and rising energy bill prices leaves the future far from certain.
“There are a lot of people who have invested in crypto mining equipment, and it’s not a small investment,” cryptoKapo said. “People are even taking out loans to invest, and the impact on their lives is very bad right now.”
