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Bitcoin validates and confirms transactions, and issues novel BTCs, using a PoW system on the SHA-256 hashing algorithm. Blockchains, like bitcoin networks, are designed to be decentralized and P2P. Thus, they need a mechanism to achieve consent and safety.
The ESMA is an independent EU Authority that protects investors and promotes stable and organized financial markets to keep the EU’s banking markets sustainable. The goal of risk assessment for investors, markets, and economic security are to promptly identify recent developments, dangers, weaknesses, and prospects so that they may be addressed.
PoW is among the kind of mechanism that makes attempting to overrun the network excessively resource-intensive. PoW mining, a statistically difficult procedure crucial to cryptos like BTC, Ethereum, and other forked altcoins, is being pushed by a crucial figure at the ESMA.
The EU Pushing for the Halt of PoW Mining
Because of its massive electricity usage, Erik Thedéen, the vice-chairman of the ESMA, recently proposed the banning of PoW mining. During a recent discussion with the Financial Times, Thedéen stated that Bitcoin is now consuming sustainable power in Sweden, where he’s the director-general of the financial regulator Finansinspektionen, and that it’s thus becoming a “national issue” for the Nordic country.
Based on the vice-chairman of the ESMA, EU regulators must encourage the crypto business toward less energy-intensive PoS mining. Banning PoW is the remedy. The power profile of PoS is much lower. While Thedéen feels BTC mining is a barrier to meeting the Paris Agreement’s environmental targets, he underlined that he’s not pushing for a total ban on all cryptos.
Is Going Green Your Only Option?
PoW is a model BTC and ETH, two of the earth’s most valuable cryptos. It requires miners to solve challenging mathematical challenges on supercomputers to validate transactions and collect incentives.
The BTC network’s environmental footprint has come under fire in recent weeks, following Elon Musk’s Tesla’s decision to stop accepting BTC payments growing environmental worries. Similarly, China stepped up its efforts to reduce the amount of BTC mining wasteful.
The best part is that these sad occurrences have worked out for BTC’s benefit. They’ve also pushed the system towards cleaner energy and supported the decentralization of BTC mining, which China formerly dominated.
According to a new poll done by the BMC, the BTC mining sector is moving in a more environmentally-friendly path. The BMC reported that in the Q4 of 2021, the renewable energies utilized in BTC mining climbed by 1 percent to 58.5 percent.
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