Will the European Union ban the mining of cryptocurrencies? It is said to be energy intensive and harmful to the environment

The problem of the climate crisis is a topical issue around the world. While we hear from the reports about the harmfulness of meat consumption, the purchase and use of plastic straws, Erik Thedéen, Vice-President of the European Securities and Markets Authority, points to a new threat to the environment. He told the Financial Times that his home country, Sweden, could soon face the negative consequences that cryptocurrency mining would have on trying to reverse climate problems.

Is cryptocurrency mining really that harmful to the environment?

Cryptocurrency mining currently accounts for 0.6% of total world energy consumption, with the segment consuming more electricity annually than Norway as a whole. Referring to Cambridge University’s estimates, Swedish regulators also noted that extracting one unit of Bitcoin consumes the same amount of energy as a medium-sized electric car needs to cover 1.8 million kilometers.

Faced with growing criticism and a mining ban in China, the miners opted for a greener strategy. They have moved to countries that use mostly renewable energy sources to generate electricity. Sweden is one of them.

There is no threat of a total ban

Thedéen fears that without intervention, a significant amount of renewable energy would go to cryptocurrency mining. However, it would be ideal if this energy was used by industries that currently use non-renewable energy sources.

However, it is not against a total mining ban. According to him, the European Union should only consider banning the mining method known as “proof of work”. It is also used by the two largest cryptomens today, Bitcoin and Ethereum. This would force the segment to move to a less energy-intensive proof of stake model, which would significantly reduce the sector’s huge energy consumption.