After the “registration crisis”, the tension between Kosovo and Serbia rises again this time caused by the energy crisis and the mining of cryptocurrencies. Kosovar Police has seized 272 equipment for cryptocurrency mining whose energy consumption is very high and has become popular among the northern Serb population who do not recognize the Kosovar state and do not pay for electricity.
The Government of Kosovo has prohibited the production of cryptocurrencies as a solution to the energy crisis that the country has been suffering since December. According to EFE reports, it is estimated that about 10,000 people or operators in Kosovo work with cryptocurrencies, although the numbers are not precise nor is there exact data on the transactions.
As a consequence of the high consumption of electricity that this financial and computer activity entails, the authorities have decided to identify those places where Bitcoins and other cryptocurrencies are being mined to reduce energy consumption until the crisis is resolved.
The country has been affected by several breakdowns in obsolete Kosovar power plants and prices for importing electricity are very high. This has resulted in very high prices for consumers and a supply that cannot keep up with the high demand. In addition to the use of electric stoves in winter, which is very popular in the country, mining has become more popular as a mechanism to earn money faster.
Among the arrests made, the police requested the equipment of a driver who carried 6 mining machines with 42 graphics cards. The Minister of the Economy, Artane Rizvanolli, stated on Twitter that “tens of thousands of euros per month from taxpayers are saved to supply energy for hundreds of Kosovar families during the crisis” with this measure.
Tens of thousands of Euros per month of taxpayers saved = energy for hundreds of Kosovar families during the crisis.
Thank you @Kosovo_Police and Kosovo Customs #KosovoCustoms. https://t.co/byb4GzOfHR
— Artane Rizvanolli (@Artane_R) January 8, 2022
Young people facing an unemployment rate of 26% are very receptive to this new form of business. Also the Serb population, majority in the north of Kosovo, is embracing digital currency mining. This means more tension between Kosovo and Serbia, as Serbs living in that area they do not recognize the authority of the Pristina government and refuse to pay for the electricity they consume.
Since the Balkan country’s independence from Serbia in 2008, these subsidies have been maintained, but at the end of 2021, the power grid operator KOSTT announced that would stop supplying free energy to the four northern municipalities of the country where the majority of Serbs live. This measure and others have been creating tension between the two countries for years and require the intervention of the European Union and NATO to reduce hostility.
The cost of mining
In order to extract cryptocurrencies, powerful computer equipment dedicated to carrying out complex processes is required, which translates into high electricity consumption. For this reason, this activity is considered as dangerous for the environment, a report from Trinity College Dublin indicates that bitcoin alone consumes as much electricity as an average-sized European country.
In addition, the growing popularity of this type of computer mining has increased the shortage of chips that is affecting the technology industry, increasing the prices of mobile phones and other products. However, most of the countries that have tightened the measures against mining in the last year have done so for another reason, China, for example, alludes to the risks that it entails for national stability and its speculation.
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