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Mining crypto assets on the Proof-of-Work consensus algorithm may interfere with the achievement of goals under the Paris climate agreement, says Eric Tedin
The Chairman of the Supervisory Board of the European Securities Market Authority (ESMA), Eric Tedin, in an interview with the FT called for a ban on crypto mining using the Proof-of-Work (PoW) consensus algorithm in the European Union.
According to Tedin, cryptocurrency mining may hinder the achievement of goals under the Paris climate agreement.
The head of the European financial regulator noted that he does not advocate a complete ban on crypto. According to Tedin, cryptocurrencies that are implemented on the Proof-of-Stake (PoS) consensus algorithm and use staking to mine new coins can be more efficient from an environmental point of view. In networks based on PoS, the operability of the blockchain is provided by the holders of digital coins and receive a reward for this.
Proof-of-Work (PoW)is a consensus algorithm that involves performing complex mathematical calculations to ensure the operation of the blockchain and the execution of transactions.
In PoW networks, miners perform calculations and receive a reward for this. Proof-of-Stake networks are distinguished by the fact that they do not require complex mathematical calculations and miners to work.
At the moment, Bitcoin, Ethereum and Dogecoin are working on the Proof-of-Work (PoW) algorithm, among others.
At the end of 2021, the developers of the “meme” cryptocurrency announced the imminent transition of Dogecoin to the Proof-of-Stake algorithm. Vitalik Buterin, co-founder of Ethereum, helps the altcoin development team in this.
In January, Buterin stated that Ethereum will complete its transition to Proof-of-Stake in 2022, and the full implementation of the altcoin roadmap will take about six years.