The Swedish want to ban the mining of cryptocurrency in the European Union. Other countries are also in support.
The discussion about the ban on mining in the EU started in November, when two Swedish regulators published an open letter, in which they petitioned for mining to stop due to fears over high energy usage.
The threat of climate change
The regulators called crypto activity a climate change threat, because according to them, the mining of bitcoin and ether use twice the amount of energy as the whole Sweden. They are concerned that renewable sources of energy will be used for cryptocurrency mining instead of being available for public use. One solution, they suggest, is to levy a special tax on the high energy consuming activity of mining.
Politicians from Germany, Spain, and Norway support this proposal.
A ban is not the solution
According to the members of European crypto community, cryptocurrency mining is not the primary reason for the continuing energy crisis in Europe, where household electric costs are skyrocketing. They consider banning cryptocurrency mining as a superficial and simple “solution” while the initial causes of the energy crisis are elsewhere. Defenders of cryptocurrency also claim that China’s last year ban did not cause a significant increase in mining in the EU.
According to the Cambridge Center for Alternative Finance, the Swedish average monthly bitcoin hashrate (computational power used per second in mining) increased by 0.84 percentage points after China’s ban between May and August 2021. In comparison, the US hashrate increased by 17.7 percentage points.
Proof? Doesn’t exist
Eric Wall, a Swedish software engineer and Chief Investment Officer at Arcane Assets, said that no large mining companies had been established in Sweden and that there is no evidence that mining would vacuum up large amounts of Swedish renewable energy.