Swedish authorities have known as for an EU-wide ban on energy-intensive cryptocurrency mining, which they say threatens targets to restrict international warming to 1.5°C beneath the 2015 Paris Agreement.
In an open letter to the European Union, Erik Thedéen, director of the Swedish Financial Supervisory Authority, and Björn Risinger, director of the Swedish Environmental Protection Agency, warned that the mining of cryptocurrencies like Bitcoin and Ethereum had sparked a rise in power consumption in the nation amounting to “a number of hundred %”.
This cryptocurrency mining is more and more drawing on Sweden’s renewable power sources, which Thedéen and Risinge say is “urgently required for the event of fossil-free metal, large-scale battery manufacturing and the electrification of our transport sector,” in addition to different important companies.
China’s recent cryptocurrency crackdown – which incorporates an outright ban on any exercise referring to the issuing or buying and selling of digital tokens or the operating of cryptocurrency-exchange companies – has seen producers turning their attention elsewhere.
This consists of the Nordic area, the place costs and taxes are extra beneficial and there’s a plentiful provide of renewable power to faucet into.
“If we had been to permit in depth mining of crypto-assets in Sweden, there’s a threat that the renewable power accessible to us will be inadequate to cowl the required local weather transition that we have to make,” Thedéen and Risinge warn.
The letter particularly requires a Europe-wide ban on the cryptocurrency mining mechanism often called “proof of labor”, which entails contributing pc processing energy to resolve mathematical puzzles on the community and validate transactions on the blockchain.
On the Ethereum community, the computational efforts required to carry out transactions are often called ‘fuel’, the price of which is about by the miners in response to the provision and demand on the community. The extra highly effective the pc, the extra possible a miner will obtain a coin.
But this course of additionally demands a huge amount of energy. According to Thedéen and Risinge, electrical energy consumption for Bitcoin mining in Sweden now quantities to 1 Terawatt-hour (TWh) yearly – equal to the electrical energy required to energy 200,000 households.
“It is at present attainable to drive a mid-size electrical automotive 1.8 million kilometres utilizing the identical power it takes to mine one single Bitcoin,” they say. “This is the equal of forty-four laps across the globe. Nine-hundred Bitcoins are mined every single day. This isn’t an affordable use of our renewable power”.
Quite a lot of coverage choices are proposed by Thedéen and Risinge to curb energy-intensive crypto mining, together with taxes on cryptocurrency manufacturing and higher communication about its environmental affect. However, they word that neither of those choices are wish to deal with the speedy downside, significantly “given the speedy progress and demand for crypto-assets.”
The letter, due to this fact, calls on the EU to introduce measures to halt crypto-mining manufacturing that use energy-intensive strategies, and for laws to forestall firms that commerce and make investments in crypto-assets to explain themselves or their enterprise as environmentally sustainable.
While this might result in crypto-producers relocating to nations with a friendlier stance on cryptocurrencies however little or no entry to renewable power sources, Thedéen and Risinge say “it is crucial that Sweden and the EU prepared the ground and set an instance in order to maximise our possibilities of assembly the Paris Agreement,” and so they name on different international authorities to comply with swimsuit.
They add: “A ban on the proof of labor mining methodology throughout the EU may be an necessary first step in a worldwide transfer in direction of a higher use of extra energy-efficient crypto mining strategies.
“It would additionally imply that our renewable power is used as effectively as attainable in order to assist the transition in direction of local weather neutrality.”