Soaring energy prices and power blackouts in Kosovo, one of the poorest countries in Europe, led to a government ban on Bitcoin mining. Now, some miners are selling their equipment or trying to move abroad, industry participants say.
The landlocked Balkan state is only the latest to crackdown on crypto mining after being buffeted by high energy prices. Kazakhstan, which had become a popular base for miners who fled China, took similar measures late last year.
Kosovo confiscated 429 devices used to mine cryptocurrencies during first few days of January, the newspaper Gazetta Express reported. The move follows energy blackouts because of high import prices and an unexpected shut-down of a power plant a month earlier.
Generating the world’s biggest cryptocurrency requires special computers that work to solve complex mathematical problems, and the biggest operating expense for miners is electricity.
Ardian Alaj, the co-owner of a crypto exchange in Kosovo’s capital Pristina, told Bloomberg he’d heard of multiple examples of miners selling or trying to sell equipment in the aftermath of the ban. There are “minimal cases” of miners going to neighboring countries, he said by email.
“Mining was done in Kosovo, because it was possible to do it illegally,” said Alaj. It was also cheap: the northern region of Mitrovica, a popular hub for crypto mining, is one of the four Serb-majority parts of the country that exempts citizens from electric bills.
“Moving operations abroad would create additional costs the local miners are not accustomed to,” Alaj said.
Kosovo declared independence from Serbia in 2008, almost a decade after a war over the territory ended with NATO air raids against Serbian forces.