For bitcoin enthusiasts in Kosovo with a breezy attitude to risk, it has been a good week to strike a deal on computer equipment that can create, or “mine”, the cryptocurrency.
From Facebook to Telegram, new posts in the region’s online crypto groups became dominated by dismayed Kosovans attempting to sell off their mining equipment – often at knockdown prices.
“There’s a lot of panic and they’re selling it or trying to move it to neighbouring countries,” said cryptoKapo, a crypto investor and administrator of some of the region’s largest online crypto communities.
The frenetic social media action follows an end-of-year announcement by Kosovo’s government of an immediate, albeit temporary, ban on all crypto mining activity as part of emergency measures to ease a crippling energy crisis.
Bitcoin and other cryptocurrencies are created or “mined” by high-powered computers that compete to solve complex mathematical puzzles in what is a highly energy-intensive process that rewards people based on the amount of computing power they provide.
The incentive to get into the mining game in Kosovo, one of Europe’s poorest countries, is obvious. The cryptocurrency currently trades at more than £31,500 a bitcoin, while Kosovo has the cheapest energy prices in Europe due in part to more than 90% of the domestic energy production coming from burning the country’s rich reserves of lignite, a low-grade coal, and fuel bills being subsidised by the government.
The largest-scale crypto mining is thought to be taking place in the north of the country, where the Serb-majority population refuse to recognise Kosovo as an independent state and have consequently not paid for electricity for more than two decades.
There is serious money to be made – and in a time of ready energy supply it was being made. The number of people mining cryptocurrencies in Kosovo is thought to have skyrocketed in recent years.
Groups such as Albanian Crypto Amateurs on Facebook and Crypto Eagles on Telegram have exploded with thousands of new members, though it is unclear how many are mining cryptocurrency, or on what scale.
But the good times appear to be over – at least for now – and the developments in Kosovo highlight one of the big questions about the future of bitcoin and other such digital currency.
The latest calculation from Cambridge University’s bitcoin electricity consumption index suggests that global bitcoin mining consumes 125.96 terawatt hours a year of electricity, putting its consumption above Norway (122.2 TWh), Argentina (121 TWh), the Netherlands (108.8 TWh) and the United Arab Emirates (113.20 TWh).
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