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European Markets Regulator Urges The EU To Ban Proof-of-Work Bitcoin Mining

European Markets Regulator Urges The EU To Ban Proof-of-Work Bitcoin Mining

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Proof-of-work bitcoin mining ought to be banned, based on the vice chair of the European Securities and Markets Authority.

Erik Thedéen steered that European authorities discover prohibiting proof-of-work mining in favor of proof-of-stake mining.

Thedeen Argues That POW Threatens Climate Change

Based on the trade’s excessive power consumption, Erik Thedéen, deputy chair of the European Securities and Markets Authority (ESMA), has urged for a ban on proof-of-work crypto mining.

Bitcoin mining has grow to be a “national issue,” based on Thedéen, who additionally cautioned that cryptocurrency might jeopardize local weather change objectives in a latest interview with the Financial Times.

Bitcoin mining has grow to be a “national” challenge for Sweden, based on Thedéen, who can be the director basic of the monetary providers regulator Finansinspektionen.

“Bitcoin is now a national issue for Sweden because of the amount of renewable energy devoted to mining,” Thedéen advised the FT.

He added,

“It would be an irony if the wind power generated on Sweden’s long coastline would be devoted to Bitcoin mining.”

“The solution is to ban proof-of-work. Proof-of-stake has a significantly lower energy profile,” Thedéen mentioned.

Thedéen made it clear that he was not pushing for a blanket ban on the crypto enterprise:

“We need to have a discussion about shifting the industry to a more efficient technology. The financial industry and a lot of large institutions are now active in cryptocurrency markets, and they have [environmental, social and governance] responsibilities.”

The two mechanisms by which crypto miners attain consensus — used to authenticate transactions and create new cash — are proof of labor and proof of stake. Proof of stake is the newer of the 2 fashions, and it processes transactions by counting on a smaller group of validators with stake within the recreation.

Proof-of-stake is a much less energy-intensive mechanism that requires contributors to place up cryptocurrency as collateral in alternate for the prospect to approve transactions efficiently.

Related article | The Bitcoin Mining Council, Saylor, And Musk: What Transpired In The Meeting?

To generate new blocks on the blockchain, proof-of-work requires contributors to expend a major quantity of computational assets and power. Although it takes extra power, it’s a safer method.

Thedéen can be the director basic of Sweden’s Financial Services Authority and the chair of the International Organization of Securities Commissions’ Sustainable Finance Committee. The International Organization of Securities Commissions is a world group of securities and futures regulators. His statements echo those expressed by the Swedish regulatory physique in November of final 12 months.

According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin now consumes 0.6 % of the world’s electrical energy.

BTC/USD nonetheless hovers near $40k. Source: TradingView.

Bitcoin Mining Battles Clampdown

The power consumption of the Bitcoin community was one of the crucial contentious points in 2021, with Elon Musk, Jack Dorsey, and Michael Saylor all collaborating within the debate. Tesla even dropped the Bitcoin cost choice as a result of Bitcoin community’s excessive power consumption. And China outrightly banning mining. Unlike Thedéen, although, many of the opponents had no objections to the usage of clear power up till just lately. Tesla would rethink introducing a Bitcoin cost choice if 50% of the Bitcoin community’s power comes from renewable sources, based on Musk.

Kosovo simply made crypto mining unlawful, citing rolling blackouts imposed on account of the nation’s power disaster. Bitcoin mining has additionally been hampered by unrest in Kazakhstan.

Related article | What Did Musk, Dorsey, And Wood Say About ESG, Green Energy, And Bitcoin Mining?

Norwegian officers mentioned in November that they had been “considering potential policy measures” to handle the problems created by crypto mining and that they might help a ban on proof of labor.

Featured Image from Pixabay | Charts by TradingView

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