cryptovibes.com
European Securities and Markets Authority has called for a ban on proof-of-work Bitcoin mining. The vice-chair of the regulatory board Erik Thedéen stated that proof-of-work mining has a lot of security issues, and should be completely faced out in favor of proof-of-stake mining. “We need to discuss shifting the industry to a more efficient technology,” Thedéen added.
Proof-Of-Stake Preferred Over Proof-Of-Work
While proof-of-work Bitcoin mining is less secure, it’s more energy-intensive than proof-of-stake Bitcoin mining. The European regulatory board believes its disadvantages far outweigh its benefits. As a result, it should be completely banned to allow the growth and widespread use of the more secure proof-of-stake mining method.
The vice-chair also stated that the proof-of-work mining has become a “national issue,” in his native Sweden which brings the need for a total ban on the method. He added that the method utilizes a vast amount of renewable energy, which is an issue for climate goals. Additionally, its high intensive energy use hampers the resources from other projects.
Proof-of-work and proof-of-stake Bitcoin mining are the two main methods of verifying crypto transactions.
The latter requires participants to spend large amounts of energy and computational resources to generate new blocks on the blockchain. However, the former needs a less energy-intensive method. It requires the participants to use crypto assets as collateral to have the chance to improve transactions.
More Stakeholders Are Speaking Out Against Proof-Work Mining
The European regulator is not the only body that has shown concern over the intensive energy use of the proof-of-work mining method.
The energy usage of the Bitcoin network was one of the most controversial topics in the cryptocurrency industry last year. It saw the likes of Elon Musk, Michael Saylor, and Jack Dorsey engaged in several debates.
Last year, Elon Must drew the attention of the crypto community to the environmental impact of Bitcoin mining. He stated that Tesla would stop taking Bitcoin payments due to the high energy consumption rate of the network.
He added that the electric car maker will reverse its decision only when the mining community starts using 50% renewable energy. He added that although cryptocurrency has its advantages, it cannot come at the cost of the good of the environment.