According to a report by the Swedish Central Bank, the energy-intensive Bitcoin and the Proof of Work (PoW) crypto mining should be banned. The world’s oldest central bank Riksbank titled the report “Cryptocurrencies and their impact on financial stability.”
Energiåtgången för bland annat #Bitcoin har ökat kraftigt de senaste åren. Centre for Alternative Finance vid Cambridge University uppskattar att Bitcoin-nätverket har en högre energikonsumtion än till exempel Norge. 🧵 1/4 #Krypto #BTC #Riksbanken
— Sveriges riksbank (@riksbanken) June 10, 2022
As PoW crypto mining employs energy-consuming data centers that solve puzzles to secure blockchains, the report reads:
“Recently, some extraction of crypto assets has been established in northern Sweden, where it consumes as much electricity as 200,000 households do on an annual basis.”
In its study of Bitcoin’s energy use, the paper cites peers at the environmental agency and the Swedish Financial Supervisory Authority, which is similar to the US Securities and Exchange Commission (SEC):
“The proof-of-work method, which is used to confirm transactions and extract new cryptocurrencies, should be banned in favor of other, less energy-intensive methods.”
During an interview with Cointelegraph, a Bitcoin author Knut Svanholm expressed their views on the matter and stated that Bitcoin mining is “guessing a number over and over again. […] As so many other Swedish institutions have done before them, they [the central bank] choose to comment on something that they don’t understand and have no business having even an opinion on.”
PoW has been targeted by many
Given that banks and governments often target PoW energy use, the report comes as no surprise. The revelation also contradicts Sweden’s embrace of Bitcoin. Sweden, home to several Bitcoin firms, is a leader in European Bitcoin adoption.
The report was quickly debunked on Twitter by prominent Swedish Bitcoiners, including Svanholm and Christian Ander, the creator of the Swedish Bitcoin exchange BTX. Ander called the report “highly inappropriate” by tweeting:
“Energy consumption must be neutral; production must be regulated. Do not regulate what individuals do with it.”
This is not the first time the country has been found saying something like this. Before this, in November last year, Sweden’s Financial Supervisory Authority or FSA called for a ban on crypto mining for tokens based on PoW consensus.
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