In the European Union area, one of the main financial regulators proposed to prohibit the method of mining of cryptocurrencies based on the system of the Proof of work (PoW). According to the institution, this technique contributes to increasing the energy intensity consumed by the activity of the mining. It proposes to use renewable energies capable of protecting nature.
Concern over renewable energy
Erik Thedéen, Vice-President of the European Securities and Markets Authority (ESMA), has proposed banning the practice of Proof of work, which is responsible for the large increase in the energy intensity of the mining cryptocurrencies. “We need to have a discussion about moving the industry to more efficient technology,” declared Mr. Thedéen. “The solution is to disallow proof-of-work (Proof of work) ”.
The vice president has recognized that cryptocurrencies are now essential. “The financial industry and many large institutions are now active in the cryptocurrency markets and they have responsibilities [environnementales, sociales et de gouvernance] ”, he added. Furthermore, he asserted that the “bitcoin is now a national issue for Sweden”.
On the other hand, Mr. Thedéen fears that in the long run, if no action is taken, renewable energy will be used only for mining of cryptocurrencies rather than just supporting the industry. “It would be ironic if the wind power produced on Sweden’s long coastline were used for bitcoin mining,” did he declare.
A promotion made to PoS at the expense of PoW
Although Mr. Thedéen is relatively critical of the activity of the mining, he does not advocate any particular measure with regard to a total ban on cryptocurrency.
“We call on the European Union to econsider a European-wide ban on the energy-intensive mining method what is the Proof of work”, the Swedish financial regulator said in November.
Meanwhile, some countries like Kosovo and Kazakhstan have recently taken steps to curb the development of their own mining of cryptocurrencies. However, the authorities of these two countries had implemented several strategies to attract investors.
Which method will be used if the Proof of work is abandoned? For Mr. Thedéen, the Proof of stake (PoS) is the ideal technique. ” The Proof of stake has a significantly lower energy profile” according to him. We then understand why Ethereum (ETH) is currently migrating to PoS.
the Proof of work (PoW) is a technique criticized by many professionals, including institutions specializing in the field of cryptocurrency settlement. For one of these regulators, the industry mining must switch from PoW to PoS which is much healthier and greener.
Source : Be[in]Crypto
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