Swedish central bank executives hit out at bitcoin mining, citing excessive energy consumption

Swedish central bank executives hit out at bitcoin mining, citing excessive energy consumption

Another day, another environmental attack on proof-of-work (PoW) mining. The Swedish central bank has shared a report valorize Energy-intensive bitcoin (BTC) and cryptocurrency mining should be banned.

The Swedish central bank, also known as the Riksbank, is the oldest central bank in the world. In a damning report titled “Cryptocurrency and Its Impact on Financial Stability,” the bank tackled PoW cryptocurrency mining. PoW mining uses power-hungry data centers that solve puzzles to secure a blockchain. The report states:

“Recently, a certain cryptocurrency mining facility has been set up in northern Sweden, where it consumes as much electricity as 200,000 households on an annual basis.”

For Knut Svanholm, bitcoin author who recently wrote “∞ / 21M”, Cointelegraph said, “A central bank does not have to tell people what they can and cannot do with their electricity.” .

“If they had paid close attention to the environment, they would certainly have stopped their own activities tomorrow morning.”

The peer paper from the environment agency and the Swedish Financial Supervision Authority, which is the equivalent of the US Securities and Exchange Commission, states in their review of bitcoin energy use:

“The proof-of-work method, used to confirm transactions and mine new cryptocurrencies, should be banned in favor of other less energy-intensive methods.”

Svanholm takes a different view: “Bitcoin mining has been measuring several times over. […] Like many other Swedish institutions before them, they [la banque centrale] choose to comment on something they do not understand and do not even have to have an opinion.

The report is not surprising, since banks and governments routinely attack the power consumption of PoW-based cryptocurrencies. The report also goes against the adoption of bitcoin in Sweden. Home to some bitcoin startups, Sweden is at the forefront of bitcoin adoption in Europe.

Prominent Swedish Bitcoiners, including Svanholm and Christian Ander, founder of Swedish Bitcoin exchange BTX, were quick to refute the report on Twitter. Svanholm shared a Youtube video claiming that “none of the energy used in bitcoin mining is wasted.”

Here is a little video I made with friends on the topic:
– ∞ / 21M (@knutsvanholm) June 10, 2022

Ander called the report “extremely inappropriate”. he tweeted:

“Energy consumption must be neutral, production must be controlled. Do not control what individuals do with it ”.

As friends of the bank at the International Monetary Fund continue their march on central bank digital currency – because it consumes less energy – the number of bitcoin miners is scarce. At the end of 2021, bitcoin took the top spot for the cleanest industry in the world thanks to its high renewable energy mix. In neighboring Norway, bitcoin miners use 100% renewable energy, while bitcoin miners around the world strive to make the world a better place.

Read also: Real Energy Consumption of Bitcoin Questioned by Ethereum Founding Member Who Taxed BTC

The proposed ban by Swedish central bank leaders coincides with the release of a report on the energy efficiency of crypto transactions. The report states:

“When the Lightning layer of Bitcoin is compared to the instant payment scheme, Bitcoin progresses exponentially in terms of scalability and efficiency, proving that it is up to a million times more energy efficient per transaction than it is. instant payments are made. “

Lightning Bitcoin Network recently passed the 4,000 BTC mark, showing its promise as a payment solution. Lightning payments occur outside the blockchain and consume much less electricity than bitcoin miners that secure layer 1 of the network.

However, a study by the Cambridge Center for Alternative Finance shows that bitcoin consumes about 15 GW of electricity per day. In the realm of memes, one Twitter user’s calculations claim that clothes dryers use more energy in the US:

(I repeat the calculations here, for reference)

– There are 130 million American households
– A typical household consumes 12000 KWh / year (GCC)
– Dryers account for 6% of household energy consumption (EPA), or 720 KWh per year.
– 720KWh * 130M = 93.6TWh
– Bitcoin uses 70-120 TWh (estimates vary). And that’s only for the United States.
– Daniel Ƀrrr (@csuwildcat) February 15, 2021

The report is Our World in Data Revealed that the global sports industry emits three times more emissions than the Bitcoin network. So you may be wondering why central banks continue to grapple with POW power consumption. And which financial institution will take the next shot?

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