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The proof-of-work mining system has been under stack over the past few weeks. New York recently passed a bill that banned PoW mining within the state. While the bill has yet to be signed into law, it has attracted criticism from the cryptocurrency community due to the negative effects it would cause on innovation.
A recent report issued by the Swedish central bank, also known as Riksbank, argued that energy-intensive cryptocurrency mining needed to be banned.
Riksbank advocates for PoW ban
Riksbank is one of the oldest banks globally, and it is joining the list of central banks that have expressed distaste for the crypto industry. Central banks have opposed the cryptocurrency industry, saying that it threatened the existing financial systems.
The bank published a report titled “Cryptocurrencies and their impact on financial stability,” which attacked the PoW consensus adopted by Bitcoin and other cryptocurrencies. PoW mining relies on energy-intensive data centers that secure the blockchain and solve puzzles.
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“Recently, some extraction of crypto assets has been established in northern Sweden, where it consumes as much electricity as 200,000 households do on an annual basis,” the report said.
The Crypto community criticizes the report
This is not the first time that Bitcoin mining has been under attack. Over the years, PoW miners have turned toward renewable energy sources, but this has not deterred some regulatory agencies from advocating for a complete ban.
Some of the most popular Swedish Bitcoiners have criticized Riksbank’s stance on the matter. Christian Ander, the founder of the BTX Bitcoin exchange in Sweden, said the report was “highly inappropriate.”
“Energy consumption must be neutral, production must be regulated. Do not regulate what individuals do with it,” he tweeted.
His sentiments were also supported by Knut Svanholm, who said that the central bank’s business did not involve telling people what they should do with electricity. He added, “if they really cared about the environment, they’d shut their own operation down for good tomorrow morning.”
Despite these attacks on PoW, Bitcoin mining has transitioned to become a sustainable venture. Towards the end of 2021, a report categorized Bitcoin mining as the cleanest industry in the world because it adopted renewable energy sources. In Norway, a country neighboring Sweden, Bitcoin miners rely on 100% renewable energy. Bitcoin miners globally are also moving towards renewable energy sources.
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