As China’s declares the ban of Bitcoin (BTC) and Ethereum (ETH) cryptocurrency mining in the country, the heads of Swedish fiscal and environmental protection authorities this month published an open letter to the Swedish and EU governments calling for the banning of energy-intensive cryptocurrency mining.
Energy-intensive Crypto Mining
“The social benefit of crypto-assets is questionable,” wrote Erik Thedéen, Director General at the Swedish Financial Supervisory Authority, and Björn Risinger, Director General at the Swedish Environmental Protection Agency. Published in an open letter via The Register.
“The consumer pitfalls are significant, and crypto-assets are commonly used for felony purposes”. Crypto-assets also have a significant negative impact on the climate. Also, mining leads to both large releases of greenhouse gases. Therefore, threatens the climate transition that needs to happen naturally.
Sweden is a country that does not heavily calculate on energy generation by plants fueled by coal, oil, and other fossil fuels. At present, 80% of Sweden’s electricity comes from its three nuclear power plants (40%). These are hydroelectric power plants, and wind power generators. On top of that, Sweden is much greener than most other well-developed countries.
Sweden’s energy consumption per capital was 11,800 kWh in 2020. This is approximately 50% above the EU average. In addition, electricity prices in Sweden are among the lowest in Europe. They are clearly not the lowest at present.
The share of hydropower generation is the lowest-cost source of electricity. It is rising just like the share of wind power generators. This makes the country a decent target for cryptocurrency mining farms. Furthermore, the country demands low-cost energy. However, people uses the energy for something else more important.
Moreover, “if we were to allow extensive mining of crypto-assets in Sweden, there is a risk that the renewable energy available to us will be insufficient to cover the required climate transition that we need to make.” This was stated in the letter by the registrar.
Authorities Call
The Swedish government and the EU authorities have called for a ban on energy-intensive cryptocurrency mining. This includes Bitcoin and Ethereum.
As an alternative, they suggest allowing non-energy-intensive cryptocurrency mining. However, the attractiveness of the greener Chia coin currency has been stagnant for months now. Also, they wrote that companies with cryptocurrencies generated using proof-of-work methods were unable to “describe or market themselves or their activities as sustainable.
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