Kosovo has been recently facing an energy crisis, and to tackle it, the government has announced a complete ban on cryptocurrency mining. On December 31, the Kosovo government-formed Technical Committee for Emergency Measures in Energy Supply advised the country’s economy minister Artane Rizvanolli to announce relief measures. The relief measures included prohibiting the ‘production of cryptocurrencies’ throughout the Eastern European nation.
A 60-day state of emergency had been declared by Kosovo’s government in December 2021. This emergency allowed the government to allocate more financial resources for the import of energy. Power cuts were also introduced.
A similar move was announced by the Iranian government a few days ago after Iran experienced ever-increasing blackouts due to excessive energy consumption – much of which was driven by crypto mining.
The recent crypto mining bans in Iran and Kosovo reflect the longstanding concerns surrounding cryptocurrencies’ energy consumption. Earlier in 2021, China had come down harshly on cryptocurrencies and banned crypto mining altogether. Cryptocurrencies, especially those with the proof-of-work consensus algorithm, are notorious for the mammoth amounts of energy they consume.
Bitcoin, the world’s biggest cryptocurrency, works on the proof-of-work consensus algorithm. It’s the same for many other cryptocurrencies as well. However, in recent years, numerous cryptocurrencies have emerged that work on the proof-of-stake consensus algorithm, which is much more energy-efficient.
The Ethereum blockchain is on its way towards transitioning from the proof-of-work mechanism to the proof-of-stake mechanism. Once the transition is completed, the blockchain’s native token Ether will become much more energy-efficient to mine. Climate activists around the world have been voicing their opinions against cryptocurrencies’ energy consumption for a long time.
