Swedish regulators to ban PoW mining?
Swedish financial and environmental regulators want to ban PoW mining, but the country’s biggest green energy power company rejected their claims regarding environmental risk, CoinFi reported.
But why do authorities want to ban it? According to a proposal signed by regulators:
The consumer risks are significant, and crypto assets are commonly used for criminal purposes such as money laundering, terrorist financing and ransomware payments. Crypto assets also have a significant negative impact on the climate as mining leads to both large emissions of greenhouse gases and threatens the climate transition that needs to happen urgently. This is alarming, and crypto-assets therefore need to be regulated.
Critics of the proposal find it perplexing that such a ban would be proposed precisely in the country that produces the most green energy if PoW mining causes large emissions of greenhouse gases and threatens the climate. What’s more, a lot of financial and cybercrimes crimes are committed using fiat money, which is no argument for banning it.
The authorities also state:
A greater number of crypto-producers are exploring the possibility of using renewable energy for mining. Crypto producers are therefore turning their attention to the Nordic region, where prices are low, taxes for mining-related activities are favourable, and there is good access to renewable energy.”
An EU-level ban?
The document continues to suggest the EU consider a ban on PoW mining because of how energy-intensive it is. It claims PoW isn’t the only way to mine cryptos like Bitcoin and Ethereum. In lieu of it, it may be possible to reduce energy consumption by as much as 99.95% without compromising functionality.
Critics were quick to react, saying that no alternative to PoW mining exists. Moreover, PoW systems come with zero energy waste. They use energy that provides high system security. PoW also solves the so-called Byzantine Generals Problem. By achieving all this, it allows the system to work in a decentralized way without relying on a trusted central party.
Vattenfall, Sweden’s biggest fossil-free energy producer, tweeted:
(We) just completely reject the notion—put forth by our financial regulator and environmental protection agency 2 days ago—of bitcoin mining’s wastefulness.
According to Swedish national Erick Wall, Chief Investment Officer at Arcane Assets:
Their (regulators) thesis is that if countries with great access and infrastructure to harvest fossil-free fuel were to ban crypto mining, crypto mining will happen in countries and from sources with much worse CO2 emissions. So, banning it here would be shooting nature in the foot.