Sweden has a choice to make: to provide electricity to jobs that create jobs like steel mills, or to use a growing amount of energy. Bitcoin (BTC) to allocate more capacity to its miners.
Energy Minister Khashayar Farmanbar says this is not up for debate.
Swedish Energy Minister Announces They Will Spend Electricity On “More Useful Things Than Bitcoin”
According to Bloomberg’s report, Farmanbar made the following statements in an interview:
“Honestly, we need energy for more useful things than Bitcoin. We are moving from a period of administration to a period of extreme expansion where our entire manufacturing industry is seeking electrification.”
The Swedish energy minister concluded:
“There will be bottlenecks in electricity generation, which means we need to examine whether we are using the energy in the best possible way. For example, will we use the electricity we produce without using fossil energy sources in steel production or in BTC mining? In the free market, this is not a completely trivial issue.”
Farmanbar’s comments suggest that Sweden, home to Europe’s largest Bitcoin mining industry, may be less hospitable to it.
The Swedish government is so concerned about electricity usage that late last month it asked the Swedish Energy Agency to find ways to track how much power digital infrastructure uses, with a particular focus on crypto mining.
As it is known, BTC miners use computers that require high amounts of energy to solve complex algorithms and receive BTC as a reward.
This business relies on cheap electricity and access to land rather than manpower. Profit margins are largely determined by fluctuations in Bitcoin’s price.
“Tax Advantages Provided to Miners in Sweden Can Be Ended”
While Farmanbar declined to say what measures it might take to prevent mining, one option discussed could include changing the order in which electricity users who mine BTC access the grid.
Another alternative would be to limit the preferential taxation that applies to all data centers regardless of their use.
Tax exemptions are applied to these centers in Sweden, but Swedenergy consultant Erik Thornstrom, one of the representatives of the electricity sector in the country, said that these incentives cryptocurrency He said it wasn’t planned for mining.
“I think many public officials, including the energy minister, who have a hard view on cryptocurrencies and Blockchain in general, need more education and awareness,” Sukesh Kumar Tedla, President of the Swedish Blockchain Association, said in an email statement.
“Yes, cryptocurrency mining consumes a lot of energy today, but so are many other innovative technologies that help run our society.”
According to the latest data from Cambridge University’s Center for Alternative Finance, Sweden’s share of Bitcoin mining is on the rise, with 0.8% of global mining transactions done in this country in January. Two years ago, this ratio was close to zero.
*Not investment advice.