It should be noted that the topics of banning the digital asset niche have been heard quite often. For example, this week it became known that Pakistani authorities want to block cryptocurrency websites. By doing so, they allegedly want to keep citizens safe from digital asset scammers and protect them from possible losses. Read more about this bizarre tactic in a separate article.


Why they criticise cryptocurrency mining

Teden is calling for very radical measures – he has asked European regulators to consider banning or restricting the mining of cryptocurrencies on the Proof-of-Work (PoW) algorithm. In this case, we’re talking about Bitcoin, Etherium in its current form and other popular cryptocurrencies. Here’s a quote from Teden, in which he shares his point of view. The replica was published by the Cointelegraph news outlet.

We need to start a discussion about the industry moving towards more efficient technologies.


That is, an expert believes that spending energy on PoW cryptocurrencies is impractical, on top of it allegedly harming the planet. We do not agree with this point of view. Firstly, the share of renewable energy in cryptocurrency mining has increased significantly in the last year, which means that the electricity consumption situation has become greener. Secondly, cryptocurrencies open up access to financial freedom, allow full ownership and management of one's assets, and enable decentralised financial applications for anyone and everyone.

In this case, high energy costs are the price to pay for all of this. However, large areas of human activity like construction waste far more electricity. In addition servicing fiat currencies such as the dollar and bank operations also require a lot of light.


Eric Theden, vice chairman of the European Securities and Markets Authority

As we have already noted, both Bitcoin and Etherium belong to this category, although Ether is due to switch to the more efficient Proof-of-Stake (PoS) algorithm as early as this year. Unlike PoW, PoS does not require miners to continuously ramp up the processing power of their hardware, so the power consumption of the blockchain network is minimal.

In the case of PoS, the role of computing hardware is played by so-called steaks - that is, certain portions of crypto-assets. They are proof of the integrity of the validators, as the latter are not interested in network problems and coin depreciation due to ownership of the crypto in question. A regular computer will suffice to keep the PoS network running - ASIC miners and video cards are quite manageable here.

The topic of Bitcoin’s “too high power consumption” was one of the most discussed even outside of the crypto community in 2021. Individuals such as Tesla CEO Elon Musk, former Twitter director Jack Dorsey, and MicroStrategy founder Michael Saylor have advocated for more efficient use of electricity. All of them are strong supporters of crypto, although they see certain disadvantages in it.

Share of renewable energy in Bitcoin mining compared to different countries according to Global Sustainable Energy Index

By the way, earlier Elon Musk stated that if at least 50 percent of the Bitcoin network’s energy consumption is supplied by renewable sources, his company Tesla will consider returning BTC to the status of a payment for Tesla electric cars. As recently as last year, the manufacturer refused to accept Bitcoin as payment just because of concerns about the crypto’s negative impact on the environment.


We think the proposal to ban cryptocurrency mining altogether is too radical. After all, miners around the world are now actively switching to renewable energy sources, which makes the coin industry more environmentally friendly. Therefore, creating problems for a niche that is headed in a "green" direction seems far from a good idea in general.


What do you think about this? Share your opinion in our millionaires’ cryptochat. There, we’ll talk about other developments affecting the world of decentralised finance as well.