Swedish officials are calling on the EU to ban energy-intensive cryptocurrency mining techniques, such as that used by bitcoin. According to them, these activities cannot be tolerated at a time when all States of the world must urgently reduce their energy consumption to fight against the climate threat.
The crypto wave has hit Sweden and this is of great concern to the country’s authorities. Since China put a stop to cryptocurrency mining on its soil, the geography of the sector has been completely redesigned. Countries like the United States and Kazakhstan have attracted a number of crypto companies forced to hastily relocate their mining sites. But Sweden, which has a good production of renewable energy, has also caught the eye of crypto miners.
This poses a real threat to the country, believe Erik Thedéen and Björn Risinger, respectively director of the financial supervision agency and director of the Swedish environmental protection agency. In an open letter Sent to the European Union on November 5, 2021, the two Swedish officials warn of the heavy impact that crypto mining has on the country. Between April and August 2021, energy consumption related to bitcoin mining in Sweden increased by ” several hundred percent “. According to them, this now represents the electricity consumption of 200,000 homes.
Banning overly energy-intensive forms of crypto mining from the EU
For the two Swedish agencies, this situation cannot be tolerated at a time when countries must reduce their energy consumption as much as possible, in order to avoid the most dangerous climate change scenarios. Erik Thedéen and Björn Risinger therefore call on the European Union to ban the most energy-intensive forms of crypto mining.
The protocol pointed out here is the so-called “proof of work” protocol (proof of work). This protocol has several advantages, in particular that of offering a good degree of security and decentralization. The downside is that it is very energy intensive, because the more the number of miners grows, the more they have to make their machines perform complex mathematical calculations to mine cryptocurrencies and validate transactions. It is the protocol on which the two most valuable cryptocurrencies in the world are based: bitcoin and ethereum.
It remains to be seen whether other EU countries will agree with Sweden on the subject. Passing collective legislation is no easy task in an area that unites no less than 27 states. Whatever regulation the EU decides to put in place, the players in the crypto market are in any case already exploring, for their part, less energy-consuming mining techniques. Ethereum has notably planned to switch to a so-called proof of stake protocol and ensures that this will reduce its energy consumption by 99%.