Bitcoin is the first successful internet money based on peer-to-peer technology; whereby no central bank or authority is involved in the transaction and production of the Bitcoin currency. It was created by an anonymous individual/group under the name, Satoshi Nakamoto. The source code is available publicly as an open source project, anybody can look at it and be part of the developmental process.
Swedish officials have raised concerns with the bloc about PoW’s high energy consumption and have proposed a ban.
Sweden’s financial regulators and the European Commission have been discussing a possible ban on the proof-of-work poW is a type of consensus algorithm that rewards validators according to the amount of computational power they have expended. (PoW) mechanism that is based on Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. due to its environmental impact. The website netzpolitik.org published documents showing the discussions, as reported by CoinDesk .
Un document dated November 26, 2021 notes a meeting between Sweden’s financial regulator, an environmental agency and the European Commission’s digital digital technologies are these electronic tools that have the ability to generate, store or even process data. policy arm in which they discussed the establishment of cryptocurrency operations in Sweden and a possible ban on cryptocurrencies that use PoW mechanisms such as Bitcoin .
The discussion revolved around the high energy consumption of PoW systems compared to other blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. consensus mechanisms such as Proof of Stake (PoS). It also highlighted that Bitcoin operating in European bloc countries must use renewable energy and reduce their carbon emissions in compliance with environmental policies.
“ The regulator argues that they have a responsibility, in line with the Paris agreement, to ensure that renewable energy, which is a scarce resource, is used primarily for essential services “, reads the document, which adds further on:
We would like to assess the feasibility of banning POW to move towards PoS and more environmentally friendly consensus consensus is achieved when all participants of the network agree on the order and content of the blocks in the blockchain. mechanisms.
Sweden proposes to ban PoW
En la reunión también se habría cuestionado la posibilidad de una prohibición al comercio de criptomonedas basadas en la prueba de trabajo. Por otro lado, un asistente anónimo asomó la idea de que se debería alentar a Bitcoin to move towards a more environmentally friendly alternative, such as PoS, following the example of rivals such as Ethereum a decentralized open-source blockchain with smart contracts functionality. .
“ If Ethereum is able to change, we could legitimately ask the same of BTC. We need to “protect” other cryptocurrencies that are sustainable. I don’t see the need to “protect” the Bitcoin community. “ he commented.
Un second document dated February 2022 suggests that discussions on PoW between Swedish and EU officials have continued. That meeting was joined by members of Germany’s environment ministry, it said.
Both Swedish and German authorities expressed concerns about energy use related to cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. mining, as the challenges of the climate transition raise a number of concerns in this regard. Cooperation and knowledge is sought at the EU and international level .
The wording of the files suggests that the decision-making process is still ongoing, and European regulators are most likely still developing policy on the issue. The most recent document indicates that meeting participants agreed that more research is needed on consensus mechanisms and their environmental impact.
European Union keeps a close refers to the closing price; similar to the same term used in stock trading. eye on Bitcoin
The revelations about the ongoing discussions come shortly after the European Parliament was on the verge of approving a provision to limit the use of PoW cryptocurrencies . The proposal, which was part of the draft MiCA, the EU’s broad regulatory framework for digital assets, also argued the high energy expense of coin a coin can refer to a cryptocurrency that can operate independently or to a single unit of such cryptocurrency. mining a process where blocks are added to a blockchain, verifying transactions. It is also the process through which new bitcoin or some altcoins are created. as. Bitcoin and advocated the fulfillment of “ minimum standards of environmental sustainability”.
European legislators rejected the provision at the end of March, partly in the face of pushback from the local crypto community. The MiCA draft now goes through a trialogue between the European Parliament, the European Commission and the European Council, without including a special clause on PoW.
This is not the first time Swedish regulators have expressed interest in limiting proof-of-work mining. As reported by DiarioBitcoin the directors of the Financial Supervisory Authority y la Environmental Protection Agency solicitaron in November last year a ban on PoW mining on the grounds that such activity generates 120 million tons of CO2.
Sweden hasn’t been the only one to bring up the issue before the EU. Proof of work, and in particular cryptocurrency mining activity, has come under heavy criticism from regulators around the world due to energy concerns; even if it is powered by renewable energy. In Europe, politicians and regulators from countries such as Spain, Germany and Norway have been demanding strict measures to stop the mining of Bitcoin since last year.
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Article by Hannah Estefania Perez / DiarioBitcoin
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