Swedish central bankers snipe Bitcoin mining, cite rampant energy use

Another environmental attack on proof of work (PoW), mining, continues. The Swedish central bank shared a report that argued against cryptocurrency mining and energy-intensive Bitcoin (BTC).

The oldest global central bank is the Swedish Riksbank. The bank was exposed in a report entitled “Cryptocurrencies: their impact on financial stability”. PoW mining uses energy-intensive data centers to solve puzzles in order to secure blockchains. According to the report:

“Recently, some crypto assets were extracted in northern Sweden. It consumes as much electricity per year as 200,000 households.”

Knut Svanholm (a Bitcoin author) told Cointelegraph that a central bank does not have the right to tell people what they can or cannot do with their electricity.

“If they truly cared about the environment they would shut down their own operations for good tomorrow morning.”

In its analysis of Bitcoin’s energy consumption, the paper refers to peers from the Swedish Financial Supervisory Authority and the Environmental Agency, which are equivalents to the United States Securities and Exchange Commission.

“The proof of work method is used to verify transactions and extract new cryptos. It should be replaced by other less energy-intensive methods.”

Svanholm is a different perspective: “Bitcoin mining involves guessing a number over-and-over again.” […] Like many other Swedish institutions before them, they [the central banks] chose to comment on something they don’t fully understand and have no right to have an opinion about.

Given that governments and banks regularly target PoW energy usage, it is not surprising that the report was published. This report is also insensitive to the progress of Bitcoin adoption in Sweden. Sweden, home to many Bitcoin startups is a leader in European Bitcoin adoption.

Svanholm and Christian Ander, founders of the Swedish Bitcoin exchange BTX (the founder), were among the prominent Swedish Bitcoiners who quickly refuted the report via Twitter. Svanholm shared a Youtube clip that claimed that “none” of the energy used to mine Bitcoins goes to waste.

Har ar en liten video jag och nagra kompisar har gjort om amnet: https://t.co/uz4p5Ap7EC
— knutsvanholm.com /21M (@knutsvanholm) June 10, 2022

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

“Energy consumption should be neutral; production must be controlled.” You cannot regulate what individuals do with energy.

The numbers for Bitcoin mining are staggering as the International Monetary Fund’s friends march forward with a central bank digital currency. It would require less energy. With its high-renewable energy mix, Bitcoin was the most clean industry in the world by late 2021. Bitcoin miners in Norway use 100% renewable energy. Bitcoin miners around the globe strive to make the world better.

Related: Bitcoin’s true energy use is questioned, Ethereum founder criticizes BTC

Parallel to the publication of a report on the energy efficiency of cryptocurrency transactions, the proposed ban by the Swedish central banksers is also being published. According to the report:

When Bitcoin Lightning layer is compared with Instant Payment scheme, Bitcoin gains exponentially scalability, efficiency, and speed, showing that it’s up to a millionx more efficient per transaction than Instant Pays.

Bitcoin’s Lightning Network has recently reached the milestone of 4,000 BTC, proving its potential as a payment system. Lightning payments are off-chain and require much less electricity than Bitcoin miners who secure the network’s layer.

However, the research by Cambridge Centre for Alternative Finance shows that Bitcoin uses an average of 15GW of electricity per day. One Twitter user’s back-of the-napkin math claims that U.S. clothes dryers use more energy.

(Reposting the math here for ref. – 130M US households – An avg household consumes 12000 KWh / yr. – Dryers account for 6% of household energy use (EPA) which is = 720 KWh / yr 720 KWh *130M = 93.6TWh – Bitcoin uses 70 – 120 TWh (estimates may vary).
— Daniel Brrr (@csuwildcat), February 15, 2021

A report by Our World in Data showed that the global sport industry produces three times more carbon dioxide than the Bitcoin network. This begs the question: Why do central banks continue attacking PoW’s energy use? Which financial institution will fire next?