Next, the EU will ban Bitcoin mining?

Following China's ban on virtual currency "mining" last year, EU regulators are also calling for a ban on energy-intensive crypto mining.

The European Union's top financial regulator has again called for a ban on major forms of Bitcoin mining across the European Union, according to the Financial Times. Erik Thedéen, vice chairman of the European Securities and Markets Authority, said Bitcoin mining has become a "national issue" in Sweden and warned that cryptocurrencies pose a risk to achieving the climate change goals in the Paris Agreement.

Thedéen said European regulators should consider banning the “PoW” (proof of work) mining model and push the industry to move to the less energy-intensive “PoS” (proof of stake) model to reduce the industry’s heavy electricity use.

Swedish authorities warn: More and more renewable energy is being used for cryptocurrency mining

Currently, the two most traded cryptocurrencies, Bitcoin and Ethereum, both use the PoW model, which requires all participants in the blockchain digital ledger to verify transactions. The biggest problem with this model is its huge energy consumption.

Take Bitcoin as an example. Since Bitcoin generates a block every 10 minutes and gives block producers certain rewards and transaction fees as incentives, "miners" who want to obtain high returns use all computing power resources to perform uninterrupted hash operations, which results in huge energy waste.

Cryptocurrency mining has become a lucrative and competitive business, with record levels of computing power dedicated to the process, according to Blockchain.com.

The Cambridge Bitcoin Electricity Consumption Index shows that Bitcoin mining accounts for 0.6% of the world's total energy consumption, consuming more electricity each year than Norway.

“The solution is to ban PoW, PoS has a much lower energy profile,” said Thedéen, who is also director general of the Swedish Financial Services Authority and chair of sustainable finance at the international organization Iosco.

Swedish authorities first raised the idea of ​​banning the practice in November last year, noting that increasing amounts of renewable energy were being used for cryptocurrency mining while stating that the “social benefits of crypto assets are questionable.”

The Swedish regulator, citing estimates from the University of Cambridge, also noted that mining one unit of Bitcoin consumes as much energy as driving a mid-sized electric car for 1.8 million kilometers.

Thedéen warned that without intervention, it would be a travesty that a large amount of renewable energy would be used for Bitcoin mining instead of moving traditional service industries away from coal energy.

In the United States, lawmakers are also exploring the impact of energy consumed by Bitcoin mining. According to Coinphony, on January 20, the U.S. Energy and Commerce Committee's Oversight and Investigations Subcommittee will hold a public hearing to explore the consequences of energy consumption generated by cryptocurrency mining operations.

Notably, Ethereum said it would move to a less energy-intensive PoS model in June, which allows users to win the right to record transactions based on how much they have invested in the network.