The European Securities and Markets Authority (ESMA) vice-chair Erik Thedéen is pushing for a bloc-wide ban on crypto mining. In talking to the Financial Times, Bitcoin mining has become a national problem for Sweden. According to him, this is because of the amount of renewable energy devoted to mining Bitcoin. He doesn’t believe it is advisable for Sweden’s renewable wind energy to be consumed by Bitcoin mining companies. Therefore, the proposed ban is to reduce the problems that would further worsen Europe’s energy crisis.
Crypto Mining Problem
Recent numbers from the Cambridge Bitcoin Electricity Consumption Index show that Bitcoin mining now consumes 0.6% of the world’s power. Governments have already taken measures to respond to growing worries about the increasing energy use of the crypto mining industry. Kosovo banned cryptocurrency mining to resolve the country’s biggest energy shortfall in a decade.
In a related development, US lawmakers have questioned crypto mining companies about their energy use, source, and how they intend to grow in the United States. This follows an oversight hearing on the impact of crypto mining.
Mining several coins, particularly Bitcoin, consumes a lot of energy. Bitcoin could rank 27th in the world for energy usage, more than Ukraine in a single year. This is because cryptocurrency depends on an energy-intensive mechanism known as “proof of work” to secure its ledger. To validate transactions, miners must employ sophisticated computing equipment to solve more hard riddles, and Miners are rewarded with new currencies for their efforts.