Another day, another environmental attack on work proof mining (PoW). A report shared by the Swedish central bank argued Energy-intensive Bitcoin (BTC) and cryptocurrency studies should be banned.
The Swedish central bank, known as the Riksbank, is the oldest central bank in the world. In an unprecedented report entitled “Cryptocurrencies and their Impact on Financial Stability,” the bank had cracked down on PoW cryptocurrency mining. PoW Mining uses power-hungry data centers that solve puzzles to secure blockchains. The report said:
“Cryptocurrencies have recently been set up in the north of Sweden, consuming as much electricity as 200,000 households do on an annual basis.
For Knut Svanholm, Bitcoin author who recently wrote “∞ / 21M,” said the Cointelegraph, “The Central Bank has no business telling people what it can and cannot do with its electricity.”
“If they really cared about the environment, they would close their operations completely tomorrow.
The paper quotes peers at the Environment Agency and the Swedish Financial Supervisory Authority, which is equivalent to the US Securities and Exchange Commission, in its study of Bitcoin’s energy consumption:
“The proof method used to verify transactions and process new cryptocurrencies should be banned in favor of other, less energy-intensive methods.
Svanholm has a different opinion: “Bitcoin mining is guessing a number over and over again. […] Like so many other Swedish institutions have done before them, then [the central bank] choose to comment on something they do not understand and have no problem even having an opinion on. “
The report comes as no surprise in light of the fact that banks and governments regularly monitor PoW energy consumption. The report also flies in the face of Bitcoin adoption in Sweden. Home to a number of Bitcoin startups, Sweden is advanced in terms of European Bitcoin adoption.
Prominent Swedish Bitcoiners, including Svanholm and Christian Ander, founder of the Swedish Bitcoin exchange BTX, were quick to refute the report on Twitter. Svanholm shared a Youtube video claiming that “none of the energy used for Bitcoin mining is wasted.”
This is a small video that I and some friends have made on the subject: https://t.co/uz4p5Ap7EC
– knutsvanholm.com ∞ / 21M (@knutsvanholm) June 10, 2022
Ander called the report “very inappropriate”. He tweeted:
“Energy consumption must be neutral, production must be controlled. Do not set rules about what individuals do with it. “
As the bank’s friends at the International Monetary Fund continue to use the central bank’s digital currency – as it would use less energy – Bitcoin’s figures are striking. In late 2021, Bitcoin took first place as the cleanest industry in the world with a strong 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.
Connected: Bitcoin’s actual energy consumption questioned as founder Ethereum criticizes BTC
The proposed ban by the Swedish central bank governor also coincides with the publication of a report examining the energy efficiency of cryptocurrencies. The report said:
“When the Bitcoin Lightning layer is compared to a fast payment system, Bitcoin increases exponentially in flexibility and efficiency, which turns out to be up to a million times more energy efficient in each transaction than instant payments.”
Lightning Network Bitcoin recently reached the 4,000 BTC milestone showing its promise as a payment solution. Lightning payments take place outside the chain and use considerably less electricity than the Bitcoin miners who secure the layer 1 network.
Nevertheless, research from the Cambridge Center for Alternative Finance says that Bitcoin consumes an estimated 15GW of electricity each day. In meme-worthy content, the math on the back of one Twitter user claims that tumble dryers in the United States consume more energy:
(republished the math here, for fox)
– There are 130M US homes
– The average household uses 12000 KWh / year (EPA)
– Dryers are 6% of household energy consumption (EPA), which = 720 KWh / year
– 720 KWh * 130M = 93.6 TWh
– Bitcoin uses 70-120 TWh (estimates vary)
It’s just the United States
– Daniel Ƀrrr (@csuwildcat) February 15, 2021
Our World in Data report demonstrated that the global sports industry emits three times as much as the Bitcoin network. This begs the question, why do central banks continue to attack PoW’s energy consumption? And which financial institution will shoot the next shot?
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