Key Takeaways:
- Energy Minister of Sweden, Farmanbar does not support Bitcoin mining.
- The Government of the country already has plans to put restrictions on the Bitcoin mining industry.
Bitcoin mining has always faced criticism for the high level of energy consumption involved in the process. Over time, regulators and the public have raised their concerns regarding the harm Bitcoin mining causes to the environment. For the same reason, one of the primary objectives of the upcoming Ethereum merge is its shift from proof-of-work (PoW) to proof-of-stake (PoS). The shift is necessary as PoS consumes less energy than PoW.
The recent crypto-market crash has also taken a toll on the crypto-mining industry. Recently, a Bitcoin mining firm named Mawson announced that it will be suspending all its major capital expenditures till market conditions normalize.
The Senate of Paraguay also passed a bill to control activities related to Bitcoin but primarily mining. The bill appoints the Ministry of Industry and Commerce as the governing body for overseeing all crypto-related activities.
However, Bloomberg reported that Sweden’s Energy Minister, Khashayar Farmanbar, has said that the energy of the country is required for more useful things rather than Bitcoin mining. There is an increase in demand for electricity in the country as Sweden is going through extreme expansion and the entire manufacturing industry is “seeking to electrify.”
The Minister has hinted toward a complete ban on Bitcoin mining. The directors of Sweden’s financial services and environmental protection agencies already suggested a ban on PoW mining in the European Union. Last year there was a sharp increase in the consumption of energy in the sector.
Sweden can safely be called a hub of Bitcoin miners as it provides low-cost electricity. It is possible as there are hydro reservoirs and wind parks that provide clean power. However, there are possibilities of scarcity in both mining farms and profits earned from mining crypto assets. The recent downturn of the crypto market has worsened the condition further.
The Government seems to already have plans for the mining industry. Farmanbar refused to comment on any measure that the Government might implement to restrict mining. However, two points have been disclosed and discussed.
Primarily, priority will be given to power users to add more value to society and therefore, their order of connection to the network will be changed. The secondary goal is to put restrictions on the scope of the preferential tax treatment that all data centers currently have access to. The launch of the incentive was to bring in tech giants like Microsoft and Facebook and not crypto mining businesses.
Officials like Sukesh Kumar, who chairs the Swedish Blockchain Association said that “…a lot of public officials including the energy minister has who have strong opinions about cryptocurrency and blockchain, in general, need further education and awareness.” He pointed out that several innovative technologies consume a similar amount of energy as crypto mining.
However, Minister Farmanbar questioned the use of power in Bitcoin mining when the country can use it to make fossil-free steel. He also suggested that the country should look if the country is using its energy in the right place.
