Sweden calls for a ban on cryptocurrency mining in the European Union

Cryptocurrencies evoke mixed feelings – some see them as a revolution in the financial system, others see them as a speculative bubble, and even as a threat to our security. Recently, Swedish institutions called for a ban on cryptocurrency mining in the European Union.

The Swedish Financial Supervisory Authority and the Swedish Environmental Protection Agency have published a document in which they draw attention to the negative impact of cryptocurrencies on the environment – their extraction leads to high greenhouse gas emissions and can have a significant impact on climate change. In such a situation, it is necessary to regulate the cryptographic assets.

Scientists are alarming – cryptocurrencies have a huge impact on the environment

According to the estimates of researchers from the University of Cambridge and Digiconomist, the two most important cryptocurrencies in the world – Bitcoin and Ethereum, together consume about twice as much electricity as the whole of Sweden. The high demand for energy results from the mining process (in this case it is a proof of work algorithm), which requires the involvement of large computing power of computers. If that was not enough, as the value of cryptocurrencies increases, the complexity of these calculations increases, so it is also necessary to increase the computing power. It can therefore be assumed that the more expensive Bitcoin becomes, the more harmful it is to the environment.

Digiconomist estimates that the cryptocurrency system, with its current market value, releases up to 120 million tons of carbon dioxide (CO2) annually into the atmosphere. This figure is comparable to the emissions generated by 100 million flights between Sweden and Thailand (both ways).

Cryptocurrency farm

The Swedes want a cryptocurrency mining ban

In such a situation, the Swedish Financial Supervisory Authority and the Swedish Environmental Protection Agency suggest introducing appropriate regulations that will allow to remedy the damage caused by mining cryptocurrencies using the energy-intensive proof of work algorithm.

Officials suggest introducing a tax on the energy-intensive production of Bitcoin. Additionally, companies that deal with trading cryptocurrencies mined using the energy-intensive POW algorithm could neither describe nor advertise their business as sustainable for the environment.

Unfortunately, it may be necessary to take more restrictive measures here. Officials call on the European Union to consider banning the proof of work algorithm from cryptocurrency mining. Especially that there are other models that allow you to reduce energy consumption by 99.95% while maintaining the functionality of the technology (e.g. proof of stake – we know that Ethereum will soon switch to such a model).

What do you think about the idea of ​​the Swedes? The European Union should really introduce such a restrictive law for miners?

Source: Finansin Spektionen

About Alex Marcell

He likes dogs, pizza and popcorn. Already a fanboy of Nintendo and Sony, but today throws anything. He has collaborated on sites and magazines such as GameBlast, Nintendo World, Hero and Portal Pop, but today is dedicated exclusively to Spark Chronicles.

Check Also

The American company is negotiating the takeover of the producer Pegasus

According to the daily “Haarec”, the talks are at an advanced stage, although they are …

Leave a Reply

Your email address will not be published.