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A leading EU regulator, Erik Thedéen, has pushed for banning Proof-of-Work mining amid concerns over its exorbitant energy consumption. As of now, this would entail banning mining for both of the two largest cryptocurrencies, Bitcoin and Ethereum, though the latter is slated to move to Proof-of-Stake this year.
Regulator Proposes Proof-of-Work Ban
A prominent regulator has called for the outright banning of Proof-of-Work cryptocurrency mining, citing environmental and energy usage concerns.
Per the Financial Times, the vice-chair of the European Securities and Markets Authority, Erik Thedéen, speaking on Proof-of-Work mining’s tendency to impede progress on climate change, has said that “the solution is to ban Proof-of-Work.” He did not call for a ban on cryptocurrencies, but rather has called upon the industry to focus on the more energy-efficient Proof-of-Stake blockchain validation method.
The prominent regulator concurrently serves as director-general of Sweden’s Financial Services Authority and chair of sustainable finance for the International Organization for Securities Commissions. He has called cryptocurrency mining a “national issue” for Sweden, as more miners relocate to that country to source power more sustainably.
Last November, Thedéen, alongside the director-general of the Swedish Environmental Protection Agency Björn Risinger, similarly called for the prohibition of energy-intensive crypto mining because, even if conducted using sustainable resources, it shifts resources away from other, more crucial activities.
In their November report, the directors-general said that “the social benefit of crypto-assets is questionable” and cited various troubling statistics on the energy usage of Proof-of-Work, including the calculation that the carbon footprint of Bitcoin and Ethereum combined is equal to 100 million round-trip flights between Sweden and Thailand each year.
Thedéen remarked:
“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.”
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.