Erik Thedéen and Björn Risinger and others challenge they argue for high electricity consumption in bitcoin mining. According to them, the extraction of bitcoin and ether consumes twice as much energy as the whole of Sweden.
Officials fear that this year’s ban on cryptocurrency mining in China could bring some miners to Scandinavia. “The European Union should consider banning the mining of proof-of-work virtual currencies (The way in which the user of the payment system proves the value of the means of payment through the work expended, this applies to bitcoin and ether – editor’s note.), “The authors said that in practice, the restrictions could take the form of, for example, a special tax on energy-intensive mining.
At the same time, they acknowledge that similar steps could help further increase carbon dioxide emissions from virtual currency mining, as miners would move to other parts of the planet that do not promote renewable electricity. “It is important that both Sweden and the EU can use green energy where society as a whole benefits the most,” added Risinger and Thedéen.
How unecological is bitcoin mining really, and how exactly is it going? Watch the video:
Henrik Juhlin, Director of the Power Division of the Swedish state-owned company Vatenfall, arguments of the opponents of mining refuses provided that bitcoin mining may in fact help the transmission system to achieve greater stability. According to Juhlin, mining has the potential to contribute to a better balance of demand and supply, especially in countries that increasingly rely on unstable renewables.
Proof-of-work, however, is not the only existing way to mine virtual coins. The second most important cryptoproject, Ethereum, is planning to move to a proof-of-stake system that bypasses miners. Instead, holders of more digital currency should contribute to the cybersecurity of the network of transactions by storing them in a special digital wallet. In return, they will be entitled to a dividend equivalent.
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With the transition to proof-of-stake, there is no need to consume a relatively high amount of electricity. However, in terms of bitcoin design and operation, power consumption is not a fault, but a key feature of the network. This means that if one of the miners conceived of the unfair intentions to control or manipulate the network of bitcoin transactions, he would theoretically have to burn such a huge amount of electricity that the operation would not pay off in terms of costs and revenues.
However, the electricity consumed each year by the operation of bitcoin is increasing older studies equals the annual consumption of all electrical appliances in the United States that are turned on but inactive.
See what bitcoin mining looks like:
The United States is currently the world’s center for bitcoin mining. They replaced China, where the government intervened against the miners.
At the end of August, America accounted for 35.4 percent of the production, which is more than double that of April. This emerges from a study published by the Cambridge Center for Alternative Finance. The study measures countries’ share of the global hash rate. This is a quantity that measures the performance of equipment used to extract cryptocurrencies.
Who are the biggest polluters on the planet? The European Union is not one of them in absolute terms:
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