Climate change targets and crypto risks are getting European Regulators concerned lately.
Erik Thedéen, the vice-chair of the European Securities and Markets Authority, expressed concern over the increasing use of renewable energy for bitcoin mining.
Recently in an interview with the Financial Times, Thedéen warned that bitcoin (BTC) mining has become a “national problem” and that cryptocurrencies are a threat to climate change targets.
He further called on European regulators to improvise special exemptions to proof-of-work (PoW) mining activities, which is mainly used by bitcoin and some other counterfeit coins. He argues that Proof-of-Stake (PoS) is a better and more energy-efficient alternative to it.
“We need to discuss about shifting the industry to a more efficient technology.”
A Paris-based alternative investment firm, Melanion Capital has already called the growing call for a ban on PoW mining in November 2021 “completely informed”.
Due to Bitcoin’s decentralized nature, there is no lobby group to protect its interests, the investment body said, “and the industry should not take this as an opportunity to carry out illegal activities in the absence of defensive forces.”
The power consumption of the Bitcoin network was one of the most controversial issues in 2021, as people like Elon Musk, Jack Dorsey, and Michael Saylor were involved in many discussions. Even Tesla also discontinued the Bitcoin payment option, citing Bitcoin network power consumption. However, unlike Thedéen, many critics say it still has no problem with pure energy consumption. Musk suggested that Tesla might reconsider adding a bitcoin payment option if 50% of Bitcoin network power comes from renewable sources.
China’s ban on bitcoin mining in May last year was a boon to habitats, as it not only disrupted the highly concentrated bitcoin mining industry but also helped in moving towards renewable energy consumption. According to the Q3 report of the Bitcoin Mining Council, renewable energy consumption through the Bitcoin network increased by 58% in the third quarter of 2021.