Arif Efendi, a London-based businessman shares in this op-ed his view on cryptocurrency and Sweden’s call for the EU to ban Bitcoin mining.
Businessman Arif Efendi shares his view on cryptocurrency and Sweden’s proposal to ban Bitcoin mining.
According to businessman Arif Efendi, cryptocurrency has come under fire in recent years. As a result, Sweden called on the EU to ban bitcoin mining, a development that has expanded globally.
However, he claims that cybercash still has lots of positive things to offer.
What is the hype about Cryptocurrency?
Even though cryptocurrency has been around for more than a decade, it is only in recent years that the term has become a household name.
Cryptocurrencies have often made headlines and recently became the talk of the town because Sweden wants the European Union (EU) to ban the mining of Bitcoins.
What is all this about, and what is cryptocurrency actually?
After many years of research and investments, these are questions I often meet. Let us dig into it together and explore the world of cryptocurrency.
What is cryptocurrency?
At its simplest, cryptocurrency is digital money. With cryptocurrency, there are no physical coins or paper notes. The money exists strictly in the form of data.
Furthermore, cryptocurrencies are types of digital currencies developed for usage on peer-to-peer networks devoid of central authority. The most widely known cryptocurrency is Bitcoin.
Bitcoins and other types of cybercash have elements of decentralization, as they operate without a central bank or single administrator.
The decentralized control is related to one more cryptocurrency characteristic, namely enhanced security and anonymity due to its use of cryptography.
Cryptocurrency has many benefits compared to traditional currency. For example, cryptocurrency cannot be counterfeited or debased due to the cryptographic protocols that support the currency’s existence.
In addition, cryptocurrency accounts cannot go “in the red” because cryptocurrency does not actually have an account balance from which a deficit could occur.
Finally, cryptocurrency allows for near-instantaneous transactions between different parties anywhere on Earth with a reasonable degree of trust.
How is cryptocurrency different from stocks?
Cryptocurrency is different from stocks in that cryptocurrency is a type of digital currency that uses cryptography to secure transactions.
Cryptocurrencies are completely decentralized, meaning they have no centralized banking system or authority controlling them. The cryptocurrency market typically involves cryptocurrency trading and investing.
The stock market is an exchange where brokers and dealers trade stocks. A stock represents an ownership interest in a company so it can be traded or sold at a profit based on the performance of the business.
Stock prices fluctuate every day due to supply and demand, overall health of the economy, perceived value by investors, potential for gains through company growth, etc.
However, cryptocurrency prices rarely vary more than 1-2% a day.
Why is cryptocurrency so popular?
Cryptocurrency is rapidly gaining popularity in today’s society. People are purchasing cryptocurrency because of the benefits it offers. Information about cryptocurrency has been around for years, but recently cryptocurrency has sparked interest, leading to more cryptocurrency purchases than ever before.
Cryptocurrency gives people complete control over their money rather than depending on banks or other financial institutions. As mentioned earlier, it is also decentralized, meaning no person, group or company owns them. The ability to be in charge of your own money is what draws many people, including myself, to cryptocurrency.
Why does Sweden want the EU to ban Bitcoin mining?
Despite its popularity, EU legislators are currently considering new legislation that would bar energy-intensive cryptocurrency mining from being carried out in countries across the union.
The legislation is being proposed due to cryptocurrency miners draining electricity supplies in Sweden to their own benefit. It has become a popular method of cryptocurrency mining in recent years.
When Bitcoin was introduced, it was mined on computers with normal processing units, but it quickly turned out that the process was way too slow. Therefore, cryptocurrency is now generated through big mining pools. These pools consume huge amounts of electricity, and this is what concerns the Swedes.
According to the writers of an open letter to the EU, Bitcoin mining in Sweden now consumes 1 TeraWatt-hour annually. The names of the writers are Björn Risinger, director of the Swedish Environmental Protection Agency, and Erik Thedéen, director of the Swedish Financial Supervisory Authority
This is the same amount of electricity needed to provide 200,000 households with power. According to Björn Risinger and Erik Thedéen, cryptocurrency mining uses more and more of Sweden’s renewable energy.
“If we were to allow extensive mining of crypto-assets in Sweden, there is a risk that the renewable energy available to us will be insufficient to cover the required climate transition that we need to make,” the two Swedes wrote in their letter to the EU.
Björn Risinger and Erik Thedéen refer to Sweden’s climate obligations according to the 2015 Paris Agreement.
Coexistence between the climate and cryptocurrency
While cryptocurrency is more popular and talked about than ever before, it is still controversial, as you can hear.
I, myself, find great joy in cryptocurrency and its endless opportunities. I am sure it is here to stay and that it will create a lot more headlines in the future.
In the meantime, I hope we can find a way for the climate and cryptocurrency to coexist.
By Arif Efendi
Arif Efendi is a London-based businessman interested in cryptocurrency, investments, sports, and entertainment.