Riksbank or the Swedish central bank released a report in which it pitched for a ban on all types of PoW mining because of its energy-intensive nature. Bitcoin is mined by this mechanism and it is also considered the most decentralized way of mining.
The report titled “Cryptocurrencies and their impact on financial stability” noted that Bitcoin or any type of PoW mining in Sweden consumes an amount of energy that could power at least 200,000 households on an annual basis. The report was made jointly by the Swedish Financial Supervisory Authority, just like the SEC in the US.
“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.”
The report recommends that PoW mining be banned for the benefit of other less energy-intensive mining mechanisms.
“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.”
The report comes as little amazement, considering that banks and states routinely target PoW mining’s energy use. It likewise goes against Bitcoin adoption in Sweden. Home to various Bitcoin startups, Sweden is fairly ahead in terms of European Bitcoin adoption.
Swedish Bitcoiners like Svanholm and Christian Ander, the pioneer behind Swedish exchange BTX, rushed to disprove the report on Twitter. While Ander called the report “highly inappropriate” in one of his tweets, Svanholm suggested that the central bank does not understand the mining process.
“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.”
However, research from Cambridge Center for Alternative Finance expresses that Bitcoin consumes an expected of electricity every day. A Twitter user claimed that clothes driers in the U.S. consume more energy
Another report by Our World in Data showed that the worldwide sports industry consumes a large multiple of the total energy consumed by the entire Bitcoin network.