Why Did Kosovo Ban Cryptocurrency Mining?
By Space Coast Daily // January 17, 2022
You already know that cryptocurrencies are digital currencies that can be mined by the crypto miners but if you want to know exactly what happens in the process then we say that Cryptocurrency mining creates new currencies with the use of computers. The computers work on various programmed mathematical calculations to create these currencies.
Cryptocurrencies have to be mined to function well since they are not on a centralised computer network. It does not take more than 10 minutes for most mining softwares to solve complex mathematical equations and process blocks over a decentralized network. This is the basic mechanism behind Crypto mining.
Dependency on fossil fuels
The world of cryptocurrency is heavily reliant on fossil fuels. Cryptocurrency mining frequently uses fossil-fuel-derived energy. As we just discussed earlier that there are softwares that are used to mine cryptocurrency, and it is very obvious that you will need the energy to run the device in which the mining is happening.
But mining cryptocurrency is no joke because it takes large and advanced computer set-ups to mine cryptocurrencies which takes a huge amount of energy. Let’s say if the price of a cryptocurrency increases today, so the amount of energy used by miners to generate coins will although increase at the same time.
A study by the University of Cambridge has come up with a conclusion after several studies that every year Bitcoin mining consumes more than 120 Terawatt Hours of power.
Crypto mining banned indefinitely in Kosovo
As the island of Kosovo grapples with a severe energy shortage, the government has banned crypto mining. This was done to avoid unnecessary energy expenditure and facilitate essential activities that depend on electricity.The youngsters in Kosovo have developed a taste for crypto mining as it is profitable and the energy prices in Kosovo have been low in recent decades.
The officials in Kosovo had to support authorities in the favour of power cutbacks owing to the power shortage caused by the failure of power plants. The high importing costs of power have further worsened this issue.
The government was intimidated due to the low power supplies from Russia. This facilitated a severe hike in the price of gases in Europe. The extent of these price hikes went as high as 30%.
Deficiency of energy causing state of emergency
Even in a statement, the Economy and Energy Minister of Kosovo Artane Rizvanolli said, “All law enforcement authorities will prohibit the production of this activity in coordination with other relevant organizations that will identify the areas where cryptocurrency is produced.”
Due to the high usage of energy, governments are facing problems to supply energy. The energy shortage keeps worsening, as more people are resorting to crypto mining. In such an emergency condition, it was the last option for Kosovo to ban crypto mining.
A miner from Kosovo stated that crypto mining has been very profitable, as he has spent only 170 Euros at most while earning at least 2400 Euros per month. Crypto mining is becoming increasingly popular in the northern parts of Kosovo. Most of the people living in northern Kosovo are Serbs.
These people deny paying electricity bills, as they are yet to recognize Kosovo as an independent state. There are almost 1.8 million people living in Kosovo, and they require additional energy during the winter to help heat up their homes. This has compelled the government of Kosovo to import more than 40% of its energy expenditure.
Owing to these energy shortages in Kosovo facilitated by failed power production plants and hiked gas prices, the government of Kosovo was compelled to ban crypto mining during the https://stocksprofit.org. Moreover, there are a lot of other factors that have bolstered the stern stance of the Government of Kosovo against Crypto mining.
Even in a statement, the Economy and Energy Minister of Kosovo Artane Rizvanolli said, “All law enforcement authorities will prohibit the production of this activity in coordination with other relevant organizations that will identify the areas where cryptocurrency is produced.” Due to the high usage of energy, governments are facing problems to supply energy. Crypto mining lies with ambiguity over its legality in the future as well. Things can get better for crypto miners in Kosovo once the energy shortage in the country is over, or if cryptocurrencies are regulated and cryptocurrency is taxed.