The crypto industry wants to go green — that’s easier said than done

BODEN, Sweden — Tucked away in snowy Swedish Lapland is a modern-day gold mine. But instead of picks and shovels, it’s filled with thousands of computers.

These machines, known as mining rigs, are working around the clock to find new units of cryptocurrency — in this case, ethereum, the second-largest token globally.

To do so, they must compete with others around the world to find the answer to a complex math puzzle, which grows in difficulty as more and more computers, known as “miners,” join the network. The aim is to ensure the security of the system and prevent fraud.

The whole process is underpinned by something known as “proof of work.” And it uses up an incredibly large amount of energy. Bitcoin, the world’s biggest digital currency, also uses this framework. It now consumes as much energy as entire countries.

Governments around the world are growing concerned. Some countries, such as China, have gone so far as to ban crypto mining outright.

The facility is run by Hive Blockchain, a Canadian firm that focuses on using green and renewable energy to mine crypto.

Hive’s Swedish operation is powered by a local hydropower plant in Boden, in the north of the country. The region is renowned for its surplus of cheap, renewable electricity.

“In the north of Sweden, 100% of the power is either hydro power-based or wind power-based,” Johan Eriksson, an advisor at Hive, said. “It is 100% renewable.”

Eriksson says crypto miners are using excess energy capacity that would have otherwise been wasted — in other words, it’s not required by households in the region.

But the vast amount of power needed to run operations like Hive’s has alarmed officials.

Finansinspektionen, the Swedish finance watchdog, is calling on the European Union to ban crypto mining due to its huge energy usage.

“Crypto-asset producers are keen to use more renewable energy, and they are increasing their presence in the Nordic region,” the agency said in a statement last year.

“Sweden needs the renewable energy targeted by crypto-asset producers for the climate transition of our essential services, and increased use by miners threatens our ability to meet the Paris Agreement.”