The European Central Bank (ECB) warns the European Union (EU) might restrict or completely ban Bitcoin, just like the restrictions on fossil-fuel consumption.
With the European Union’s target of reducing carbon consumption, the ECB reports that Bitcoin is likely to face legal suits or consumption restrictions.
ECB publishes on crypto energy consumption
The ECB published a research article assessing the impact of climate change and its possible causes. The research article came down to analyzing the proof-of-work algorithms, stating Bitcoin might undergo operational challenges throughout the EU. However, that does not dig the grave for Bitcoins. The article compared the proof-of-work with proof-of-stake algorithms, stating that the latter uses 99% less energy than the former.
Hence, it is probable that the Bitcoin algorithm would be shifted to the proof-of-stake as the public authorities are stuck between incentivizing crypto usage and maximizing the benefits of criminalizing it and crippling the industry. The former, therefore, remains an obvious choice.
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With the growing concerns of proof-of-work blockchains, the ECB analyses the energy consumption data of Bitcoins in the past few years, revealing Bitcoin and Ethereum’s electricity consumption is similar to that of the individual countries of Spain, Netherlands, and Austria.
ECB’s report on the Bitcoin ban reveals Bitcoin and Ethereum negating most European countries’ greenhouse gas saving mission. With global warming and climate change being burning topics in this country, anticipating a ban is not unlikely.
Ethereum, the second largest cryptocurrency in the market, is planning to shift from the proof-of-work to the proof-of-stake algorithm, indicating Bitcoin will not follow suit in the near future.
EU to change the face of bitcoin consumption
The growing concerns about sustainability and environmental protection have pushed the European Union to implement legislations to curb greenhouse gases and pollution levels in each country. Thus, the ECB anticipates the European Union might implement new legislation on Bitcoin consumption.
These legislations might include the growing concerns of sustainability, and environmental protection has pushed the European Union to implement legislations to curb greenhouse gases and pollution levels in each country. Thus, the ECB anticipates the European Union might implement new legislation on Bitcoin consumption. These legislations might include disclosing all transactions or imposing carbon taxes on Bitcoin purchases with a ban on mining.
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The ECB’s report on Bitcoin’s energy consumption and its anticipation of the potential ban provides another reason investors should strike alternative investment deals to cope with the anticipated change in the coming years, even though the EU’s green project extends till 2035.