The EU Should Ban Proof-of-Work Mining

Erik Thedeen, vice-chairman of the European Securities and Markets Authority, urged EU financial regulators not to allow the proof-of work cryptocurrency mining model. Due to the high amount of renewable energy used in mining bitcoin, he claimed that it has become a “national problem” for Sweden.

“The Solution is to Ban Proof of Work”

Erik Thedeen, also Director-General of Sweden’s FCA, stated that cryptocurrency using the proof-of work mining method poses significant threats to the environment in a recent interview with the Financial Times. European regulators should encourage proof-of-stake models, which are less energy-intensive, as they are less expensive.

“We must have a conversation about moving the industry to a more efficient tech. Ban proof-of-work is the solution. The energy profile of proof-of-stake is significantly lower.”

It is important to note that Bitcoin and Ether are the largest digital assets in terms of market capitalization. They both rely on proof-of-work mining technology. Ethereum is currently working on upgrading its network to Ethereum 2.0. This transition is expected to take place this summer. The second-largest blockchain protocol, Ethereum, will begin to use the proof-of stake method. This will make it more environmentally-friendly.

Bitcoin has not yet made any plans to change its mining model. Thedeen stated that the primary digital asset is now a national issue for Sweden, as a large portion of renewable energy is used to mine it. According to the ESMA executive, Swedish electricity should be used for traditional services, and not BTC.

“It would be ironic if the wind power produced on Sweden’s long coastline was used for bitcoin mining.”

BTC Mining’s Positive Side

The authorities of North Vancouver, Canada decided in October 2017 to use the bitcoin mining energy for heating commercial and residential buildings. Lonsdale Energy Corporation (LEC), and MintGreen, both local digital asset miners, supported the initiative.

According to the latter, its “Digital Boilers”, which are a digital version of natural gas, could block 20,000 tons of GHGs per MW.

Karsten Veng, CEO of Lonsdale Energy Corporation, expressed hope that the collaboration would be beneficial to the Canadian town of nearly 50,000 residents and the environment.

“LEC is embarking on a journey towards reducing greenhouse gas emissions. This project will be part thereof.”