Head of Sweden’s Financial Supervisory Authority: Cryptocurrencies pose risks to meeting Paris Agreement goals to reduce climate change

Time:2022-01-30 07:30 Source:Internet Copy share

On January 30, Erik Thedéen, head of the Swedish Financial Supervisory Authority and vice-chairman of the European Securities and Markets Authority, said in an interview that Bitcoin mining has become a “national problem” in Sweden, and that cryptocurrencies are critical to the realization of the Paris Agreement. He wants Sweden to impose a ban on energy-intensive cryptocurrency mining, saying the EU should also consider banning energy-intensive so-called "proof of work" cryptocurrency mining methods, The industry should be encouraged to move to a less energy-intensive "proof of stake" model to reduce the energy use of cryptocurrency mining. The Financial Times noted that the mining of two of the largest cryptocurrencies measured by transaction volume, bitcoin and ether, relies on a “proof-of-work” model that requires all participants in the blockchain to verify transactions. Miners are rewarded with newly minted "coins" by solving complex "puzzles" using large data centers. This requires more energy than a "proof-of-stake" model, which has a much smaller number of participants validating a transaction. The solution, Thedéen says, is to ban proof-of-work mining models, which are significantly less energy-intensive.

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