A top EU financial regulator has renewed calls for a bloc-wide “ban” on the main form of bitcoin mining and sounded the alarm over the rising proportion of renewable energy devoted to crypto mining.
Erik Thedéen, vice-chair of the European Securities and Markets Authority, told the Financial Times that bitcoin mining had become a “national issue” for his native country Sweden and warned that cryptocurrencies posed a risk to meeting climate change goals in the Paris agreement.
Thedéen said that European regulators should consider banning a mining method known as “proof of work” and instead nudge the industry towards the less energy-intensive “proof of stake” model to cut down on the sector’s vast power usage.
Bitcoin and ether, the two largest cryptocurrencies by volume, both rely on a proof of work model, requiring all participants on the blockchain digital ledger to verify transactions. Miners, who use sprawling data centres filled with fast computers to solve complex puzzles, are rewarded for recording transactions with newly minted coins.
That requires significantly more energy than the proof of stake model, where the number of parties signing off trades is much smaller.
“The solution is to ban proof of work,” said Thedéen, who is also director-general of Sweden’s Financial Services Authority and chair of sustainable finance for international body Iosco. “Proof of stake has a significantly lower energy profile.”
Mining has become a highly lucrative and competitive business, with the amount of computing power dedicated to the process running at record levels, according to Blockchain.com. China banned the process in May but activity has scattered across the world and there are now several publicly traded companies focused on the practice, such as Canada’s Hut 8.
“We need to have a discussion about shifting the industry to a more efficient technology,” Thedéen said, adding that he was not advocating a wholesale ban on crypto.
“The financial industry and a lot of large institutions are now active in cryptocurrency markets and they have [environmental, social and governance] responsibilities,” he added.
His comments were made after Swedish authorities first floated the idea of banning the practice in November last year, noting the rising amount of renewable energy being devoted to cryptocurrencies while stating that “the social benefit of crypto assets is questionable”.
“[We call for] the EU to consider an EU-level ban on the energy-intensive mining method proof of work,” the Swedish financial regulator said in November.
Cryptocurrency mining has been attracting growing criticism for its impact on the environment. The practice accounts for 0.6 per cent of the world’s total energy consumption and burns more electricity annually than Norway, according to data from the Cambridge Bitcoin Electricity Consumption Index.
Faced with mounting criticism and the ban in China, miners have upped the share of renewable energy they use for powering their computers and pushed into countries with plenty of wind and solar power, such as Sweden and Norway.
“Bitcoin is now a national issue for Sweden because of the amount of renewable energy devoted to mining,” Thedéen said.
Without intervention, he warned, a significant amount of renewable energy would go towards creating units of bitcoin instead of moving traditional services away from coal-powered energy sources.
Swedish regulators, citing estimates from Cambridge university, also noted that mining a single unit of bitcoin consumes the same amount of energy as driving a medium-sized electric car 1.8m kilometres.
“It would be an irony if the wind power generated on Sweden’s long coastline would be devoted to bitcoin mining,” Thedéen said.
Ethereum, the second-largest digital asset, has said it will migrate to the proof of stake model in June.
If that can decrease the price for GPU cards I am all for it.
Definitely 😀
> “Bitcoin is now a national issue for Sweden because of the amount of renewable energy devoted to mining,” Thedéen said.
cryptobros are legitimately intentionally sabotaging any positive effort in energy consumption and environmentalism. Cryptocoins need to fuck off.
That won’t work. Typical legislation designed carefully by lobbyists who are tricking technologically illiterate politicians into doing something, while doing nothing.
If you ban proof of work in the EU, all that’ll happen is you’ll have an intermediary exchange in a country where proof of work isn’t banned. Nothing changes, you just move the pollution elsewhere.
So a European will just:
1) Buy proof of stake crypto (likely a stablecoin) in the EU, via EU companies.
2) Transfer it to offshore exchange, and trade it for proof of work coins like Bitcoin.
3) Do all the money making or speculative investing they want.
4) Sell on offshore exchange for proof of stake stablecoin.
5) Transfer stablecoin back to EU exchange, and cash out.
And these intermediary exchanges can be completely off the regulatory radar too, as long as they don’t operate with actual money at any point. You can have exchanges where you can ONLY swap cryptos for each other.
So in the end the demand for the proof of work coins wouldn’t change, which means mining operations will continue to mine just outside the EU instead.
Only actual way to fix this ecological mistake, is to ban companies from dealing with cryptocurrency entirely. All forms. That way the only way for an average citizen to buy crypto is via cash, face to face, off people who don’t mind doing illegal shit. It puts up such a barrier, it effectively kills it.
And once trading is dead, and there’s less people buying it, the mining operations will scale down because they won’t be able to afford their electricity bills anymore.
**Edit:** Funny how this got downvoted by the Bitcoiners who know I’ve leaked their plan.
Bring down the banhammer.
I like crypto, I think it’s the future, but I support banning the mining of crypto. It was great 10 years ago, but now it obsolete. If you want to invest in crypto coin technology then there are hundreds of coins that don’t take a country’s worth of resources and power to run, while providing the same thing and more.
Yes please fuck Bitcoin
Yes please.
I find it funny when people call them crypro currencies even thought nobody uses them as currencies.
Average people will be using CBDC’s in future.
…and how will you ever enforce it?
Good. Energy consumption of crypto is a big problem. The ratio number of financial exchanges/energy consumée is very Bad with crypto.
This topic needs to be analyzed with more perspective than “Bitcoin uses more electricity than XXX country, ban Bitcoin”. Netflix and Youtube (> 300 TWh / year) electric consumption is far more important than Bitcoin. Should we ban these platforms ?
Crypto also helps monetizing excess energy which would otherwise go to waste. It makes green energy production more controllable and profitable and strenghtens the power grid. Crypto mining could help speeding up investments in non-controllable renewable energy infrastructures.
I’m not making it up. That’s what Vattenfal, the biggest green energy producer in Sweden said 3 months ago.
Recently many green energy production infrastructures accross the world saved their economic models by mining bitcoin with their energy surpluses.
True. NFTs are a scam and cryptocurrency is cancer
Ban it asap
if people mine bitcoin in your country, it probably means that the electricity is too damn cheap ! The price of electricity should increase after a threshold. This way, the individuals could easily get cheap electricity but if you consume a lot you pay a lot per kWh.
There are more cryptocurrencies than just Bitcoin and not every cryptocurrency consumes a lot of energy. Some of them use a mechanism called proof of stake, which is energy efficient add doesn’t require expensive hardware. The second-largest cryptocurrency, Ethereum, will move to proof of stake this year. The third and fourth largest cryptocurrencies already use proof of stake.
I also don’t understand how this can be banned. Every computer owner can decide on what they want to waste energy: I can waste energy on games, browsing Reddit, calculating the digits of the number PI, or whatever else. I really don’t want the government telling me what I can and can’t do on my computer.
Good. Maybe I will one day actually be able to afford to build a computer thanks to this
This is price of security. Bitcoin is unhackable, can’t say the same thing about traditional banking systems
Please, do it as soon as possible.
I’m going to drop in that Nano currency doesn’t need mining, it has instant transactions and 0 fees. But until crypto becomes less of a Ponzi and more about actual needs to transfer value to each other just as fast as Visa/Mastercard, then we’re going to be stuck in a loop for a while.
Just EU doing EU things… We should regulate every industry that uses energy out of EU!
I think they should ban every form of crypromining. It is just wasting resources and energy.
Nice way to take controle over crypto, by getting rid of it. Politicians seems afraid of stuff they can’t controle. Who could have guessed?
Crypto was a mistake.
It’s entirely possible to have a cryptocurrency which doesn’t do the environmental damage that bitcoin does.
There’s quite a lot of them already. There’s no need for cryptocurrency to be so energy intensive.
Seems like a perfect use of regulatory power, to make people do the right thing, instead of only thinking about short-term gains.
Like if majority of crypto mining was done in Europe, which is not. So why even bother? This is stupid at all..
Mining should be banned everywhere. Wasted hardware and electricity
We should also (at least temporarily) ban electric cars, practically speaking the lesser-off are subsidising the transportation behaviour of the better-off, i.e. an Eastern-European grand-ma now has to price-compete on the same liberalised electricity market as the wealthy lawyer or IT professional from Denmark or the Netherlands who drive a (price-subsidised already) Tesla 3 or higher. It’s a travesty.
This is not to argue against this. But is it already possible for governments to decide what is useful or not?
I know I am kinda reaching, but do we need FB datacenters for example? do we need christmaslight?
I am personally also in favour of banning cruise ships. 1 day of a cruiseship is similar in polluting like a million cars.
Cryptocurrency mining has accelerated the growth of green energy. This is because miners go to where power is the cheapest, because cheaper power means more profits.
As it so happens, renewable energy sources like wind, solar, geothermal, and hydroelectric cost half as much as coal and natural gas.
While the University of Cambridge estimates 40% of all Bitcoin miners use renewable energy, recent statistics suggest this figure could be as high as 70 percent.
The Real Cause Of Climate Change?
In his book ‘The Price of Tomorrow’, Jeff Booth argues that the common denominator in the world’s environmental woes is actually inflation.
This is because inflation incentivizes spending over saving, which creates unnecessary consumption, waste, and energy usage. By contrast, Bitcoin is deflationary and incentives saving.
Tell me you don’t understand crypto without saying that you don’t understand crypto:
32 comments
A top EU financial regulator has renewed calls for a bloc-wide “ban” on the main form of bitcoin mining and sounded the alarm over the rising proportion of renewable energy devoted to crypto mining.
Erik Thedéen, vice-chair of the European Securities and Markets Authority, told the Financial Times that bitcoin mining had become a “national issue” for his native country Sweden and warned that cryptocurrencies posed a risk to meeting climate change goals in the Paris agreement.
Thedéen said that European regulators should consider banning a mining method known as “proof of work” and instead nudge the industry towards the less energy-intensive “proof of stake” model to cut down on the sector’s vast power usage.
Bitcoin and ether, the two largest cryptocurrencies by volume, both rely on a proof of work model, requiring all participants on the blockchain digital ledger to verify transactions. Miners, who use sprawling data centres filled with fast computers to solve complex puzzles, are rewarded for recording transactions with newly minted coins.
That requires significantly more energy than the proof of stake model, where the number of parties signing off trades is much smaller.
“The solution is to ban proof of work,” said Thedéen, who is also director-general of Sweden’s Financial Services Authority and chair of sustainable finance for international body Iosco. “Proof of stake has a significantly lower energy profile.”
Mining has become a highly lucrative and competitive business, with the amount of computing power dedicated to the process running at record levels, according to Blockchain.com. China banned the process in May but activity has scattered across the world and there are now several publicly traded companies focused on the practice, such as Canada’s Hut 8.
“We need to have a discussion about shifting the industry to a more efficient technology,” Thedéen said, adding that he was not advocating a wholesale ban on crypto.
“The financial industry and a lot of large institutions are now active in cryptocurrency markets and they have [environmental, social and governance] responsibilities,” he added.
His comments were made after Swedish authorities first floated the idea of banning the practice in November last year, noting the rising amount of renewable energy being devoted to cryptocurrencies while stating that “the social benefit of crypto assets is questionable”.
“[We call for] the EU to consider an EU-level ban on the energy-intensive mining method proof of work,” the Swedish financial regulator said in November.
Cryptocurrency mining has been attracting growing criticism for its impact on the environment. The practice accounts for 0.6 per cent of the world’s total energy consumption and burns more electricity annually than Norway, according to data from the Cambridge Bitcoin Electricity Consumption Index.
Faced with mounting criticism and the ban in China, miners have upped the share of renewable energy they use for powering their computers and pushed into countries with plenty of wind and solar power, such as Sweden and Norway.
“Bitcoin is now a national issue for Sweden because of the amount of renewable energy devoted to mining,” Thedéen said.
Without intervention, he warned, a significant amount of renewable energy would go towards creating units of bitcoin instead of moving traditional services away from coal-powered energy sources.
Swedish regulators, citing estimates from Cambridge university, also noted that mining a single unit of bitcoin consumes the same amount of energy as driving a medium-sized electric car 1.8m kilometres.
“It would be an irony if the wind power generated on Sweden’s long coastline would be devoted to bitcoin mining,” Thedéen said.
Ethereum, the second-largest digital asset, has said it will migrate to the proof of stake model in June.
Clearly true, Bitcoin alone uses [more energy than Spain](https://www.nytimes.com/interactive/2021/09/03/climate/bitcoin-carbon-footprint-electricity.html) to process about [seven transactions per second](https://phemex.com/blogs/what-is-transactions-per-second-tps). Every bitcoin miner allowed to run makes us a little further away from ending fossil fuel burning.
If that can decrease the price for GPU cards I am all for it.
Definitely 😀
> “Bitcoin is now a national issue for Sweden because of the amount of renewable energy devoted to mining,” Thedéen said.
cryptobros are legitimately intentionally sabotaging any positive effort in energy consumption and environmentalism. Cryptocoins need to fuck off.
That won’t work. Typical legislation designed carefully by lobbyists who are tricking technologically illiterate politicians into doing something, while doing nothing.
If you ban proof of work in the EU, all that’ll happen is you’ll have an intermediary exchange in a country where proof of work isn’t banned. Nothing changes, you just move the pollution elsewhere.
So a European will just:
1) Buy proof of stake crypto (likely a stablecoin) in the EU, via EU companies.
2) Transfer it to offshore exchange, and trade it for proof of work coins like Bitcoin.
3) Do all the money making or speculative investing they want.
4) Sell on offshore exchange for proof of stake stablecoin.
5) Transfer stablecoin back to EU exchange, and cash out.
And these intermediary exchanges can be completely off the regulatory radar too, as long as they don’t operate with actual money at any point. You can have exchanges where you can ONLY swap cryptos for each other.
So in the end the demand for the proof of work coins wouldn’t change, which means mining operations will continue to mine just outside the EU instead.
Only actual way to fix this ecological mistake, is to ban companies from dealing with cryptocurrency entirely. All forms. That way the only way for an average citizen to buy crypto is via cash, face to face, off people who don’t mind doing illegal shit. It puts up such a barrier, it effectively kills it.
And once trading is dead, and there’s less people buying it, the mining operations will scale down because they won’t be able to afford their electricity bills anymore.
**Edit:** Funny how this got downvoted by the Bitcoiners who know I’ve leaked their plan.
Bring down the banhammer.
I like crypto, I think it’s the future, but I support banning the mining of crypto. It was great 10 years ago, but now it obsolete. If you want to invest in crypto coin technology then there are hundreds of coins that don’t take a country’s worth of resources and power to run, while providing the same thing and more.
Yes please fuck Bitcoin
Yes please.
I find it funny when people call them crypro currencies even thought nobody uses them as currencies.
Average people will be using CBDC’s in future.
…and how will you ever enforce it?
Good. Energy consumption of crypto is a big problem. The ratio number of financial exchanges/energy consumée is very Bad with crypto.
This topic needs to be analyzed with more perspective than “Bitcoin uses more electricity than XXX country, ban Bitcoin”. Netflix and Youtube (> 300 TWh / year) electric consumption is far more important than Bitcoin. Should we ban these platforms ?
Crypto also helps monetizing excess energy which would otherwise go to waste. It makes green energy production more controllable and profitable and strenghtens the power grid. Crypto mining could help speeding up investments in non-controllable renewable energy infrastructures.
I’m not making it up. That’s what Vattenfal, the biggest green energy producer in Sweden said 3 months ago.
Recently many green energy production infrastructures accross the world saved their economic models by mining bitcoin with their energy surpluses.
[https://www.reuters.com/technology/costa-rica-hydro-plant-gets-new-lease-life-crypto-mining-2022-01-11/](https://www.reuters.com/technology/costa-rica-hydro-plant-gets-new-lease-life-crypto-mining-2022-01-11/)
[https://www.newsbtc.com/news/bitcoin/green-energy-in-ny-bitcoin-mining-saved-the-oldest-working-hydroelectric-plant/](https://www.newsbtc.com/news/bitcoin/green-energy-in-ny-bitcoin-mining-saved-the-oldest-working-hydroelectric-plant/)
True. NFTs are a scam and cryptocurrency is cancer
Ban it asap
if people mine bitcoin in your country, it probably means that the electricity is too damn cheap ! The price of electricity should increase after a threshold. This way, the individuals could easily get cheap electricity but if you consume a lot you pay a lot per kWh.
There are more cryptocurrencies than just Bitcoin and not every cryptocurrency consumes a lot of energy. Some of them use a mechanism called proof of stake, which is energy efficient add doesn’t require expensive hardware. The second-largest cryptocurrency, Ethereum, will move to proof of stake this year. The third and fourth largest cryptocurrencies already use proof of stake.
I also don’t understand how this can be banned. Every computer owner can decide on what they want to waste energy: I can waste energy on games, browsing Reddit, calculating the digits of the number PI, or whatever else. I really don’t want the government telling me what I can and can’t do on my computer.
Good. Maybe I will one day actually be able to afford to build a computer thanks to this
This is price of security. Bitcoin is unhackable, can’t say the same thing about traditional banking systems
Please, do it as soon as possible.
I’m going to drop in that Nano currency doesn’t need mining, it has instant transactions and 0 fees. But until crypto becomes less of a Ponzi and more about actual needs to transfer value to each other just as fast as Visa/Mastercard, then we’re going to be stuck in a loop for a while.
Just EU doing EU things… We should regulate every industry that uses energy out of EU!
I think they should ban every form of crypromining. It is just wasting resources and energy.
Nice way to take controle over crypto, by getting rid of it. Politicians seems afraid of stuff they can’t controle. Who could have guessed?
Crypto was a mistake.
It’s entirely possible to have a cryptocurrency which doesn’t do the environmental damage that bitcoin does.
There’s quite a lot of them already. There’s no need for cryptocurrency to be so energy intensive.
Seems like a perfect use of regulatory power, to make people do the right thing, instead of only thinking about short-term gains.
Like if majority of crypto mining was done in Europe, which is not. So why even bother? This is stupid at all..
Mining should be banned everywhere. Wasted hardware and electricity
We should also (at least temporarily) ban electric cars, practically speaking the lesser-off are subsidising the transportation behaviour of the better-off, i.e. an Eastern-European grand-ma now has to price-compete on the same liberalised electricity market as the wealthy lawyer or IT professional from Denmark or the Netherlands who drive a (price-subsidised already) Tesla 3 or higher. It’s a travesty.
This is not to argue against this. But is it already possible for governments to decide what is useful or not?
I know I am kinda reaching, but do we need FB datacenters for example? do we need christmaslight?
I am personally also in favour of banning cruise ships. 1 day of a cruiseship is similar in polluting like a million cars.
Cryptocurrency mining has accelerated the growth of green energy. This is because miners go to where power is the cheapest, because cheaper power means more profits.
As it so happens, renewable energy sources like wind, solar, geothermal, and hydroelectric cost half as much as coal and natural gas.
While the University of Cambridge estimates 40% of all Bitcoin miners use renewable energy, recent statistics suggest this figure could be as high as 70 percent.
The Real Cause Of Climate Change?
In his book ‘The Price of Tomorrow’, Jeff Booth argues that the common denominator in the world’s environmental woes is actually inflation.
This is because inflation incentivizes spending over saving, which creates unnecessary consumption, waste, and energy usage. By contrast, Bitcoin is deflationary and incentives saving.
Tell me you don’t understand crypto without saying that you don’t understand crypto: