Another day, another environmental attack on proof-of-work (PoW) mining. BUT report shared by the Swedish central bank argued that energy-intensive bitcoin (BTC) and cryptocurrency mining should be prohibited.

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The Swedish central bank, known as the Riksbank, is the oldest central bank in the world. In a report titled “Cryptocurrencies and their impact on financial stability,” the bank cracked PoW cryptocurrency mining. PoW mining uses energy-intensive data centers that solve puzzles to secure blockchains. The report says:

“Recently, there has been some mining of crypto assets in northern Sweden, where they consume as much electricity annually as 200,000 households.”

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For Knut Swanholm, a bitcoin author who recently wrote “∞/21M” told Cryptooshala: “The central bank has no right to tell people what they can and cannot do with their electricity.”

“If they really cared about the environment, they would close their own operation tomorrow morning.”

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The paper cites colleagues from the Environmental Protection Agency and the Swedish Financial Supervisory Authority equivalent to the US Securities and Exchange Commission in their study of Bitcoin energy consumption:

“The proof-of-work method that is used to confirm transactions and mine new cryptocurrencies should be banned in favor of other, less energy-intensive methods.”

Svanholm has a different opinion: “Bitcoin mining is about guessing a number over and over again. […] Like many other Swedish institutions before them, they [the central bank] prefer to comment on what they don’t understand and have nothing to do with having an opinion.”

The report comes as little surprise given that banks and governments are regularly looking into PoW energy usage. The report also challenges the adoption of Bitcoin in Sweden. Sweden is home to a number of bitcoin startups and is at the forefront in terms of bitcoin adoption in Europe.

Prominent Swedish bitcoiners, including Svanholm, as well as Christian Ander, founder of the Swedish bitcoin exchange BTX, were quick to deny the tweet. Svanholm shared a Youtube video claiming that “no energy used to mine bitcoin goes to waste.”

Ander called the report “grossly inappropriate”. He tweeted:

“Energy consumption must be neutral, production must be regulated. Don’t regulate what people do with it.”

As the bank’s friends at the International Monetary Fund move forward with the central bank’s digital currency – as it will consume less energy – bitcoin mining figures are impressive. At the end of 2021, Bitcoin ranked first in the cleanest industries in the world due to its high mix of renewable energy sources. In neighboring Norway, bitcoin miners use 100% renewable energy, while bitcoin miners around the world strive to make the world a better place.

Bitcoin’s Real Power Consumption Questioned As Ethereum Founder Criticizes BTC

The ban proposed by Swedish central banks also came into effect on the same day that a report was published examining the energy efficiency of cryptocurrency transactions. Report declared:

“If you compare the Bitcoin Lightning layer to an instant payment scheme, Bitcoin exponentially gains in scalability and efficiency, being a million times more energy efficient per transaction than instant payments.”

The Bitcoin Lightning Network recently hit the 4,000 BTC milestone, demonstrating its promise as a payment solution. Lightning payments take place off-grid and consume significantly less electricity than bitcoin miners that secure the first layer of the network.

Nonetheless, research work from the Cambridge Center for Alternative Finance claims that Bitcoin consumes about 15 GW of electricity every day. In a meme-worthy piece, one Twitter user claims that clothes dryers in the US use more energy:

Our world in data report demonstrated that the global sports industry emits three times more emissions than the Bitcoin network. This begs the question, why do central banks keep attacking PoW energy use? And which financial institution will take the next shot?