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In parts of the world where the cost of electricity is low but reliable internet connectivity is available, cryptocurrency mining is widespread among those who can procure the hardware. For these operators, it's a low-risk way to generate profit and obtain foreign currency, and typically presents a far better opportunity than most other legal or illegal employment that can be had in the area. This profiteering situation tends to crop up in places where the cost of electricity is "artificially" low, e.g. the government subsidizes it because of national security, humanitarian reasons, or to promote economic development, or places that cannot meaningfully participate in international bulk electricity export (e.g. distance, politics). These places formed functional market islands until recently, so their pricing was not relevant in the global context. With cryptocurrency mining, the miners are engaging in a global arbitrage on energy prices. While the environmental costs are already externalized by the producer of the electricity, the electricity producers made those decisions before they foresaw that individual citizen operators could consume large amounts of electricity, and scale their consumption higher with fewer constraints than industrial consumers can. Solutions are possible, but challenging to implement and enforce. If you switch to progressive pricing, you need better meters, and determined miners will steal or convince people to resell. If you want to regulate mining, you will need enforcement and tackle corruption. If you want to "let the market fix it", poor people won't be able to afford electricity. Within Kosovo, the Serbian community controls the hydroelectric plant, and the Kosovan community controls the two lignite plants. This adds an extra complication for policymakers. |
There are other sinks for cheap electricity in an industrial economy. Aluminum is a common one, as the main extraction is an electrochemical process. Canada is the 4th largest producer and Iceland (!) 11th.