Soaring energy prices and power outages in Kosovo, one of Europe's poorest countries, have led to a government ban on bitcoin mining. Now some miners are selling their hardware or trying to move abroad, industry members say.
The landlocked Balkan state is the latest to crack down on cryptocurrency mining after facing high energy prices. Kazakhstan, which has become a popular base for miners fleeing China, took similar measures late last year.
The Express newspaper reported that in the first days of January, Kosovo confiscated 429 devices used for mining cryptocurrencies. The move follows power outages due to high import prices and an unexpected power plant shutdown a month earlier.
Creating the world's largest cryptocurrency requires special computers that solve complex mathematical problems, and the biggest operating costs for miners are related to electricity.
Ardian Alai, co-owner of a cryptocurrency exchange in Kosovo's capital, Pristina, told Bloomberg that he had heard of several instances of miners selling or attempting to sell hardware after the ban. There are "minimal cases" of miners leaving for neighboring countries, he said in an email.
“Cryptocurrency mining was done in Kosovo because it could be done illegally,” Alai said. It was also cheap: the northern region of Kosovska Mitrovica, a popular center for cryptocurrency mining, is one of four Serbian-majority parts of the country where citizens are exempted from electricity bills.
“Moving operations overseas will result in additional costs that local miners are not used to,” Alai said.