Eric Theden, Vice-President of the European Securities and Markets Authority, has expressed concern about the increasing use of renewable energy sources for bitcoin mining.
In a recent interview with the Financial Times, Theden said that Bitcoin (BTC) mining has become a “national problem” and warned that cryptocurrencies could pose a threat to climate change.
He urged European regulators to make specific exceptions for Proof of Work (PoW) mining, which is primarily used by Bitcoin and a few other forked altcoins. He also advocated Proof of Stake (PoS) as a better and more energy efficient alternative:
“We need to discuss the industry’s transition to more efficient technology.”
Melanion Capital, a Paris-based alternative investment firm, responded to the growing demand to ban PoW mining back in November 2021 by calling it “completely misleading.”
The investment firm said that due to the decentralized nature of bitcoin, it does not have a lobby or group to protect its interests, which “should not be used as an opportunity to implement measures that would render the industry illegal due to its lack of protective powers.”
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The energy consumption of the Bitcoin network was one of the most controversial topics in 2021, leading the likes of Elon Musk, Jack Dorsey and Michael Saylor to engage in many discussions. Tesla even dropped the option to pay with bitcoin, citing the power consumption of the bitcoin network. However, unlike Theden, most critics have had no problem with using clean energy so far. Musk said that if 50% of the bitcoin network’s energy comes from renewable sources, Tesla will reconsider adding a bitcoin payment option.
China’s ban on bitcoin mining last May has proven a boon to the ecosystem, as it has not only de-centralized the highly centralized bitcoin mining industry, but has also helped the shift to renewable energy. According to the Bitcoin Mining Council’s third quarter report, by the third quarter of 2021, the use of renewable energy in the Bitcoin network reached 58%.