Proof of Work Consensus Under Fire in Sweden

The Swedish Financial Supervisory Authority (FSA) and the Environmental Protection Agency (EPA) have written a proposal to push cryptocurrency regulation and potentially ban Proof of Work mining in the country.

The FPA wrote in the proposal, that for too long, cryptocurrency has been used for illegal transactions. Money laundering, illegal purchases, and ransomware payments were the top concerns claimed by the agency. It has issued a push for regulation over the industry.

This sentiment that cryptocurrencies are only used for illegal operations is common among those who do not understand the full value of blockchain technology and crypto-assets.

Many scammers and hackers have always been present and relied on fiat and gift cards when cryptocurrency was not around.

It is also known that Bitcoin is not a good asset to use for illegal transactions because it is an immutable ledger and can be traced. Those who wrote the proposal in Sweden do not agree and are pushing for a change.

There have been many countries looking to push regulation to make crypto assets more legitimate. Sweden would be the first in Europe to push regulations that directly impact cryptocurrencies.

The EPA on the other hand added to the proposal to say that Proof of Work mining is a big problem for the environment.

Bitcoin and Ethereum are the top Proof of Work blockchains. To mine these blockchains requires a lot of hardware and a lot of energy. 

Sweden has been a popular destination for Bitcoin miners recently due to its low energy costs. The lower the energy costs, the more yield a miner will make from their machines.

Sweden is pushing to lower its CO2 emissions and stop miners from using so much energy in the country. Currently, 56% of all energy in Sweden comes from renewable sources.

There has been a recent push to make Bitcoin and Ethereum mining more eco-friendly. Venezuela uses volcanos to power miners, and the US is considering using natural gasses to power miners.

Ethereum is also set to release version 2.0, which will take it from Proof of Work to Proof of Stake, eliminating a majority of the electricity usage from their blockchain.

So far, this is only a proposal by the two agencies. Sweden has not made an official statement about regulations or mining bans, but it could become a hot topic in the country in the months to come.

Source

Updated: 11/11/2021 — 19:00