By Alicia Maher
The Swedish Financial Supervisory Authority has recently expressed its misgivings about energy usage from cryptocurrency mining to the European Union. The regulatory body said that the mining of these cryptocurrencies is increasing carbon emissions. Director-General of the commission, Erik Thedéen, and the Director-General of the Swedish Environmental Production Agency Björn Risinger, in a public letter to the EU, pointed out things they found worrisome about the mining process.
The bodies also questioned if there are social benefits to be gotten from the mining of these digital assets. The published letter used the two biggest cryptocurrencies in the world as case studies. A joint investigation by the University of Cambridge and Digiconomist revealed that Bitcoin and Ethereum used about two times the energy required by Sweden in a year.
Digiconomists reveal that at current price levels, digital assets lead to the evolution of over 100 million tons of carbon dioxide yearly. According to available information, these emissions would be the same as a hundred million flights from Sweden to Thailand, a considerable distance and number. Sweden is not the only country that is worried about these environmental impacts.
Concerns In Other Countries
Environmentalists in the United States are raising concerns about the environmental impacts of mining these cryptocurrencies. These growing concerns come in the face of seeming acceptance of digital assets by the government. Digiconomist says that a single Bitcoin transaction consumes as much power as an American home does in 60 days.
Ethereum, which has a far lower carbon emission than Bitcoin, still has a carbon footprint equivalent to Hong Kong’s. A single transaction on the Ethereum network has as many emissions as 200,000 visa transactions. It becomes even scarier as the number of people engaging in cryptocurrency transactions in the United States keeps increasing.
Mayors of big cities in the United States are creating policies to accommodate the development of cryptocurrencies. The Mayor-Elect of the City of New York, Eric Adams, in a tweet, revealed that he would want his first three salaries in Bitcoin. Similarly, the Mayor of Miami Francis Suarez tweeted that he wished to receive his next salary in Bitcoin.
The city of Miami also played host to the Cryptocurrency conference this year. The event is seen by many as the biggest cryptocurrency convention ever. An Economist at the University of New Mexico, Benjamin Jones, said that authorities were not paying enough attention to the environmental harms produced from the energy-draining and challenging nature of the mining process.
Solutions Suggested By The Swedish Officials
The Chinese government placing a ban on cryptocurrencies has had domino effects on other countries in the world. Sweden has seen an influx of crypto miners since. The influx has, of course, led to a spike in energy consumption.
Aside from a blanket ban on the process, the officials suggested that the government tax the mining process to discourage too much participation. They also urged the possibility of a conversation between the developers and regulators to arrive at a new framework for the technology that doesn’t come at such costs.