Melanion Capital, the Paris-based independent alternative investment management company, has challenged statements made by the Swedish Financial Supervisory Authority and Swedish Environmental Protection Agency, in which they called for an EU-wide ban on proof of work cryptocurrency mining.
Melanion notes the claim that Bitcoin miners jeopardize the electricity network is completely misinformed. Bitcoin miners are last-recourse electricity consumers. They are the most sensitive industry to electricity prices, and their business model collapses entirely when demand for electricity increases, as slight hikes in prices can mean mining activities incur losses.
Bitcoin miners are especially complementary for renewable energy power generation as they capture wasted energy and provide a base load for a volatile resource like wind or hydro power. They can be used for load balancing and grid management as well as supply base revenue for renewable energy sources.
Many governments that understand this have chosen to subsidize miners instead of banning them. Texas, for example, has a program to strengthen its power grid after the February 2021 outages, in relation to which Senator Ted Cruz has stated that he sees ‘Bitcoin mining playing a significant role in strengthening and hardening the resilience of the grid’.
The latest Bitcoin Mining Council report shows how Bitcoin Mining uses an inconsequential amount of energy compared to any existing material use of energy like residential buildings, road vehicles, aviation, gold mining, computer games or holiday lights.
Melanion Capital’s latest research paper on The Bitcoin Transition, expands on these points and explains in detail how Bitcoin can help governments achieve the Sustainable Development Goals set by the United Nations for 2030.
Bitcoin mining, is by its very nature decentralized, and unlike other industries has no lobby in Europe to represent its interests and negotiate favourable deals with governments. The absence of such a political counterbalance should not be taken as an opportunity to implement measures rendering illegal an industry for its lack of defensive powers.
Melanion Capital believes that, just as today’s most valuable companies emerged from the Internet Transition, tomorrow’s most valuable companies will emerge from the Bitcoin Transition. With the recently listed ETF and the soon to be launched Bitcoin Special Acquisition Company, Melanion Digital, we are putting our words into action.
We invite Sweden, Norway and Europe to do the same by issuing specific Bitcoin mining policies that promote and assist these companies, as the US and other countries have already started to do.
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