May 21, 2022

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Cryptocurrency, red | Clueless About Cryptocurrency From Rødt

last discussion Expresses the opinion of the author.

Last Friday, Rødt presented a proposal in Storting to ban cryptocurrency mining.

The proposal appears as a cooked-together package around the myths and misunderstandings that have accumulated over several years.

First of all, cryptocurrency recovery is a misleading concept. Bitcoin is not produced in data centers. Admittedly, there are large data centers that use a great deal of power for bitcoin-related tasks, but they don’t mine anything.

What they do is solve complex tasks such as processing, verifying, and securing transactions. Payment for the assignment is made in the form of Bitcoin.

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When we talk about banning cryptocurrency mining, we are talking about banning the sale of regular computer services. For bitcoin, it is about selling services related to transaction processing. For the other cryptocurrency, filecoin, it’s about selling storage space.

With Rødt’s suggestion, quickly selling VPN services could become illegal if payment is to be made in cryptocurrency.

It is hard to imagine how Norway, or the world, would benefit from such a ban. There are now around 300 million cryptocurrency users worldwide and the number is growing rapidly. A common criticism of cryptocurrencies is that they have no use other than to be a subject of speculation. This is a mistake. The areas of use are numerous and in continuous further development.

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For example, we recently saw how the Ukrainian state came out and requested donations of bitcoin and ether to fund its defense against Russia. Norwegian banks have warned users that remittances to Ukraine could disappear in the banking system, but with bitcoin these challenges are avoided and the funds reach the recipient directly.

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Another example is the imprisoned Russian opposition politician Navalny and the group around him. Once Putin used force to confiscate traditional funds, cryptocurrencies enabled them to continue financing their political work. Thus, cryptocurrency enables the struggle for democracy in countries where authoritarian regimes use force to suppress opponents. Therefore, it is ironic that Norway is discussing bans at the same time that people around the world are completely dependent on these services.

It’s easy to forget that very few people in the world have access to Vipps and BankID to transfer money.

There is a lot going on around the world to regulate cryptocurrency. In Ukraine, Zelensky has taken time to pass a new law that will make it easier to use cryptocurrency while the country is in the midst of war. He does this because he understands and depends entirely on the benefit he provides. In the USA, Biden just introduced a presidential order affirming that cryptocurrency can provide opportunities for innovation, competitiveness, and financial inclusion.

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Last year, Bitcoin was introduced as the official national currency in El Salvador, among other things to make migrant transfers into the country faster and cheaper.

When Norwegian politicians decide how we should adapt here at home, it is important that they raise their eyes and look first. Bitcoin is here to stay, and the energy-intensive security of the system is a necessity. The question is not whether this force will be used, but where and with what environmental consequences.

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Most of the data centers in Norway that provide services related to cryptocurrency are located in energy municipalities with renewable surplus capacity. This is good for the world, as it contributes to reducing carbon dioxide emissions from industry, and it is good for Norway because it ensures local value creation.

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The data center industry represents a potential industrial adventure for Norway and could breathe life into abandoned industrial communities badly in need of a new cornerstone, as long as the terms of the policy framework are based on knowledge and insight rather than populism and token politics.