Sweden Prefers Using Electricity for Job Creation Activities than Bitcoin Mining
Nicholas Otieno Jul 18, 2022 07:35
Sweden is a major Bitcoin mining hub in Europe. The Government is seeking ways to track how much power Bitcoin miners use.
Sweden is at the crossroads of choosing to use electricity for job-creation projects or Bitcoin mining. The dilemma could be tough for this Northern European country to make a wise decision.
In a recent interview with Bloomberg, Khashayar Farmanbar, Sweden’s Energy Minister, stated that it is more important to offer electricity for job-creating projects such as steel plants than for Bitcoin mining firms that consume huge amounts of energy.
“We need energy for more useful things than Bitcoin, to be honest,” Farmanbar said in the interview that was published in Bloomberg media on Saturday.
Last month, the Swedish government requested the energy agency – a government agency responsible for the supply and use of energy in the country – to track how much electricity is used for digital infrastructure, with a focus on cryptocurrency mining.
However, Farmanbar declined to talk about what measures the energy agency could take to limit crypto mining. The report shows that the energy ministry may prioritize new power users based on their ability to benefit society through job creation.
According to the Sweden Energy Agency, crypto mining does not come into the argument when the manufacturing sector is considered. Bitcoin mining is regarded as not creating as many jobs as other sectors, and its power consumption is a major threat to societal welfare.
Another option the energy ministry could consider introducing is cancelling tax incentives for particular data centres. The agency initially designed such taxes for traditional firms such as Microsoft and Meta Platforms. As a result, mining firms have also benefited from such incentives by default, but that is likely to change.
Protecting Environment
In January, Swedish government officials called on the EU to ban energy-intensive cryptocurrency mining methods proof of work, such as those used by Bitcoin.
The officials said such activities could not be tolerated at a time when all countries around the globe urgently need to reduce their energy consumption to combat the climate threat.
The government argued that Bitcoin mining is bad for the climate and worldwide efforts to convert the global energy system to renewables. According to Sweden, Bitcoin production deploying renewable sources is not environmentally friendly.
Months before Sweden’s proposal, China, which had dominated the crypto mining sector, moved and outlawed mining in the country. With China’s move, miners migrated worldwide, looking for cheap electricity and a friendlier regulatory environment. Currently, the U.S leads in the lion’s share of the global mining market, followed by Kazakhstan and Russia. But energy usage among crypto miners in such nations is still a big issue.
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