One of the constant criticisms that crypto mining receives is its high energy consumption, due to the fact that they use algorithms based on proof-of-work, which countries like China and now Sweden do not like. This algorithm asks for very complicated operations that require a lot of hashrate to ensure that the transactions on the blockchain are valid, which causes many high-power and high-consumption graphics or CPUs to be requested.
There are plans to bring blockchains to proof-of-stake, as Cardano is already doing, or as Ethereum wants to do through merging next year. Now that process could be accelerated if cryptocurrencies want to remain legal in Europe, due to a proposal by Sweden to make proof-of-work illegal.
Sweden wants to eliminate proof-of-work for its energy consumption
Sweden has released a public statement in which it officially asks the entire European Union to agree to ban transactions and blockchains based on proof of work. It does not mean that it removes or outlaws cryptocurrencies or the NFTs themselves. The proposal would make all blockchain based on proof of work illegal in the European Union, mainly because of the aforementioned energy consumption.
This would make all proof-of-work-based cryptocurrency unable to operate throughout the European Union, and in countries and territories that follow a large part of its laws and agreements. For example, Bitcoin could not operate if it does not have plans to change its mining algorithm, and if the Ethereum proposal becomes active it could operate in Europe again until the merge if they do not advance it.
According to the official statement, Sweden is asking the European Union to consider banning the energy-intensive “proof-of-work” mining method at EU level. The country itself understands that there are other methods of crypto-asset mining, which could also be used for Bitcoin and Ethereum, which they estimate would reduce energy consumption by 99,95% with maintained functionality. They are also asking to be able to introduce measures that would stop the continued establishment of energy-intensive crypto-mining production, and to limit companies that trade and invest in crypto-assets that were mined using the proof-of-work method from being able to describe or market themselves or their activities as “sustainable«.
