Banning cryptocurrencies and, in particular, mining is the only option Europe has if it wants to comply with the Paris climate agreements. The alarm was raised by two prominent Swedish executives, Erik Thedéen, director of the Swedish Financial Supervisory Authority, and Björn Risinger, director of the Swedish Environmental Protection Agency.
The two executives have published an open letter, through which they announce the consequences that cryptocurrencies are having on Sweden’s energy consumption and they are calling for an EU-wide ban on mining new cryptocurrencies.
Under the lens of enlargement, the proof-of-work system, also at the basis of the functioning of Bitcoin and Ethereum
In particular, the proof-of-work system at the basis of the operation of some of the most important cryptocurrencies, including Bitcoin and Ethereum, has ended under the lens of the leaders of the Swedish authorities.
Simplifying the concept, to validate transactions that occur on a blockchain, computers have to solve increasingly complex mathematical calculations. The first who solves the calculation receives, in exchange for his work, a certain amount of cryptocurrency.
As mentioned, as the number of validated transaction blocks in the chain increases, so does the complexity of the calculations to be performed. This means that “mining” cryptocurrency involves having increasingly powerful hardware and, as a direct consequence, leads to ever-increasing energy consumption.
Sweden in the eye of the storm for the very low costs of electricity produced from renewable sources
The ban in China of any activity related to cryptocurrencies has led companies and groups engaged in this sector to seek new horizons, and Sweden, with its very low cost of energy – the result of the increasingly high production of renewable energy – is a of the nations most affected by this phenomenon.
Cryptocurrencies are illegal. China totally bans Bitcoin and associates, which collapse
Go to the deepening
“Between April and August of this year, energy consumption related to cryptocurrency mining grew by a triple-digit percentage“Declare the two managers”The energy consumption linked to this process is equal to that of 200 thousand families“
“The amount of energy needed to mine a single Bitcoin could power an electric car for 1.8 million kilometers. In practice, with the energy used to mine a Bitcoin we could travel around the world 44 times with an electric one”Said Björn Risinger.
“Taking into account that 900 Bitcoins are mined every day, it is clear that this is by no means a reasonable use of our renewable energy.He then concluded.
At the moment, no reaction to the appeal of the two important leaders has leaked from the European legislative bodies but the ban, or at least a much stricter regulation, seems to be a common feeling for many northern European nations.