Erik Thedéen, the vice-chairman of the European Securities and Markets Authority, has renewed fresh calls for widespread ban on Bitcoin mining. In an interview with The Financial Times media outlets, Thedéen raised concerns over the increasing use of renewable energy dedicated for Bitcoin mining. The regulator described Bitcoin mining as a national threat for his native country Sweden and warned that cryptocurrency mining poses a risk to meeting climate change goals enshrined in the Paris Agreement. Thedéen has therefore called upon European regulators to consider banning a mining method regarded as ‘proof of work,’ which is mainly used for Bitcoin mining and a few other cryptocurrencies . Instead, he advocates for the use of ‘proof of stake’ as a better energy efficient alternative.
Both Bitcoin and Ether rely on the ‘proof of work’ method, which requires all participants on the blockchain network to verify transactions. Miners who use sprawling data centers and fast computers to solve complex puzzles, are rewarded for recording transactions with newly minted coins. However, that model requires a huge amount of energy than the ‘proof of stake’ method, where the number of parties signing off trade is much smaller.
Thedéen stated: “The solution is to ban proof of work. Proof of stake has a significantly lower energy profile.”
In November 2021, Melanion Capital, a Paris-based alternative investment firm, also echoed the same sentiment, describing ‘proof-of-work’ mining as “completely misinformed.” However, the investment company further justified that because of the decentralized nature of Bitcoin,there is no lobby group to defend its interest, which “should not be taken as an opportunity to implement measures making the industry illegal for its lack of defensive powers.”
Can Green Bitcoin Mining Become More Sustainable?
The announcement by Thedéen comes at a time when Bitcoin mining recently faced a lot of resistance from various stakeholders. In May last year, electric carmaker Tesla stopped accepting the Bitcoin payments, citing huge amounts of electricity required to mine the cryptocurrency. Few weeks later, China then imposed a ban on the mining of cryptocurrencies such Bitcoin and Ethereum in the region. In September, China renewed a fresh ban as part of its efforts to eliminate cryptocurrency mining operations from the country. Meng Wei, spokesperson for China’s National Development and Reform Commission, a macroeconomic planning agency, stated that crypto mining is an extremely harmful industry that jeopardizes China’s pursuit of carob neutrality. However, Elon Musk later hinted a new sign of hope when he stated that Tesla would rethink accepting Bitcoin payments once 50% of the Bitcoin network’s energy comes from renewable sources. Currently, unlike Thedéen most critics have no issue with the clean energy usage involving Bitcoin mining.
Erik Thedéen, the vice-chairman of the European Securities and Markets Authority, has renewed fresh calls for widespread ban on Bitcoin mining. In an interview with The Financial Times media outlets, Thedéen raised concerns over the increasing use of renewable energy dedicated for Bitcoin mining. The regulator described Bitcoin mining as a national threat for his native country Sweden and warned that cryptocurrency mining poses a risk to meeting climate change goals enshrined in the Paris Agreement. Thedéen has therefore called upon European regulators to consider banning a mining method regarded as ‘proof of work,’ which is mainly used for Bitcoin mining and a few other cryptocurrencies . Instead, he advocates for the use of ‘proof of stake’ as a better energy efficient alternative.
Both Bitcoin and Ether rely on the ‘proof of work’ method, which requires all participants on the blockchain network to verify transactions. Miners who use sprawling data centers and fast computers to solve complex puzzles, are rewarded for recording transactions with newly minted coins. However, that model requires a huge amount of energy than the ‘proof of stake’ method, where the number of parties signing off trade is much smaller.
Thedéen stated: “The solution is to ban proof of work. Proof of stake has a significantly lower energy profile.”
In November 2021, Melanion Capital, a Paris-based alternative investment firm, also echoed the same sentiment, describing ‘proof-of-work’ mining as “completely misinformed.” However, the investment company further justified that because of the decentralized nature of Bitcoin,there is no lobby group to defend its interest, which “should not be taken as an opportunity to implement measures making the industry illegal for its lack of defensive powers.”
Can Green Bitcoin Mining Become More Sustainable?
The announcement by Thedéen comes at a time when Bitcoin mining recently faced a lot of resistance from various stakeholders. In May last year, electric carmaker Tesla stopped accepting the Bitcoin payments, citing huge amounts of electricity required to mine the cryptocurrency. Few weeks later, China then imposed a ban on the mining of cryptocurrencies such Bitcoin and Ethereum in the region. In September, China renewed a fresh ban as part of its efforts to eliminate cryptocurrency mining operations from the country. Meng Wei, spokesperson for China’s National Development and Reform Commission, a macroeconomic planning agency, stated that crypto mining is an extremely harmful industry that jeopardizes China’s pursuit of carob neutrality. However, Elon Musk later hinted a new sign of hope when he stated that Tesla would rethink accepting Bitcoin payments once 50% of the Bitcoin network’s energy comes from renewable sources. Currently, unlike Thedéen most critics have no issue with the clean energy usage involving Bitcoin mining.
