Norway joins Sweden in move to ban crypto mining

Norway is considering a crypto mining ban proposal put forth by two Swedish regulatory officials, Minister of Local Government Bjørn Arild Gram insinuated in an interview with Euronews. At the moment, the Nordic country is “considering potential policy measures” to address the “challenges related to crypto mining.”

Gram said they were looking at the solutions proposed by the Swedish regulators in this context. Last week, Euronews reported that officials from two of Sweden’s top regulators had alarmed it wouldn’t be possible to meet the Paris Climate Agreement goals unless proof-of-work mining was banned across Europe.  

How is PoW harmful to the environment?

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Under the proof of work system, mathematical problems must be solved to validate transactions that occur on a given network. With time, the number of blocks on the chain increases, making the process more difficult. This requires more computing power and energy to solve the problems.

An arms race

This has resulted in an arms race of sorts among miners, who vie for first place to validate a new block and earn a new crypto coin. The capacity of mining hardware is directly proportional to the likelihood of getting the coin.

Mining is very popular in Northern Europe

This year, Nordic countries saw crypto mining rise to prominence on their territories as producers fled China amid crypto crackdown, attracted by large amounts of renewable electricity and lower energy prices.

However, crypto mining’s growth comes with an opportunity cost according to Swedish regulators. The country’s renewable energy becomes diverted away from domestic, transport, and industrial uses for the benefit of Bitcoin (BTC/USD) and other coins.

According to Gram, it’s hard to justify the extensive use of renewable energy even though Bitcoin might have some long-term benefits.

Sweden’s biggest green energy power company rejects regulators’ claims

Last week, Swedish financial and environmental regulators signed a proposal to ban PoW mining, which Vattenfall reacted sharply to. It stated:

Crypto assets have a significant negative impact on the climate as mining leads to both large emissions of greenhouse gases and threatens the climate transition that needs to happen urgently. This is alarming, and crypto-assets therefore need to be regulated.

According to state-owned power company Vattenfall, proposing such a ban in the country that produces the most green energy is nothing short of perplexing.