- Sweden is concerned about the growth in energy demand in its territory due to mining, and they are considering the possibility of limiting this activity in the territory.
- The Swedish Minister of Energy, Khashayar Farmanbar, that currently the entire manufacturing industry of the country seeks to be electrified and this will receive priority over crypto mining.
- Sweden is considered the largest Bitcoin mining industry in Europe.
Since cryptocurrencies, and more precisely Bitcoin, appeared on the public scene, there is a characteristic for which they have been singled out by their detractors, the need for high energy consumption to extract this type of virtual money.
The amount of energy required for the activity called “mining” has had very high figures, which has caused some nations to set this activity aside or simply prohibit it, as in the case of China, to avoid such high consumption.
Other countries are looking to follow in the footsteps of the Asian giant, as in the case of Sweden, a European country that is concerned about the growth in energy demand in its territory due to mining, Therefore, it is considering the option of closing the door to such activity, as stated by Khashayar Farmanbar, current Minister of Energy of Sweden.
“We need energy for other things besides Bitcoin”, declared the Minister of Energy.
Through a interview with Bloombergthe Minister pointed out that his country is currently going from a “administration period to extreme expansion in which our entire manufacturing industry seeks to become electrified.”
That is, at the moment Sweden is torn between providing electrical power for job-creating tasks like metal crops or focusing on giving Bitcoin miners more power. According to the minister, the answer seems more than obvious.
“We need energy for more useful things than Bitcoin, to be honest,” he noted.
Sweden and crypto mining
Currently, it is known Sweden as what could be the largest Bitcoin mining industry in Europehowever, given the recent statements by the Minister of Energy, that could change at any moment.
This because of government, As noted above, he is extremely concerned because his energy consumption has increased, which is why he decided ask the Swedish Energy Agency to calculate how much electricity is being used the digital space, more specifically in crypto mining.
It is important to remember that, to carry out their work, miners use various computer systems, which consume a large amount of energy since they focus on solving very advanced mathematical puzzles and, in this way, unlock blocks and obtain cryptocurrencies.
In addition, to have an acceptable profit margin, miners seek access to cheap electricity and low-cost land, rather than human labor. It should be noted that the income margins are determined by changes in the value of Bitcoin.
What actions could be taken against the miners?
Yes ok Farmanbar refused to indicate what measures it could take to curb mining activity in Sweden, it appears that at least two possibilities have been considered.
The first one is modify the order in which electricity consumers enter the network, in order to give priority to those who provide a tangible benefit to societyas is the creation of jobs.
the other possibility is to restrict the scope of the preferential tax treatment that currently applies to all data center facilities. This because of, within the government’s plans was not to attract crypto miners, but rather they were oriented towards larger firms such as Microsoft and FacebookThis was announced by the main adviser of the industrial group Swedenergy, Erik Thornstrom in an interview.
“I think the existing tax breaks should be focused on the activities they were meant to attract in the first place. In that sense, crypto mining is more debatableThornstrom noted.
Energy consumption
It’s important to note that while data facilities use only a small fraction of all of Sweden’s energy, mining digital money covers a small part of that, according to Thornstrom’s estimates.
However, energy demand in various services could simply increase eightfold by 2040, according to data from the Swedish grid operator.
In this regard, it should be clear that Sweden’s share of Bitcoin mining is growing, reaching just over 0.8 percent of the global processing rate in January this year, according to the most up-to-date information from the Center for Miscellaneous Finance at the University of Cambridge.
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