Eric Teden, vice president of the European Stock Exchange, described the way bitcoins are mined as a risk to achieving the goals set for tackling climate change.
According to Crypto Slate, the European Stock Exchange is concerned about the dangers of digging for bitcoins to achieve the goals of the Paris Agreement. In this agreement, governments committed themselves to tackling climate change.
In an interview with the Financial Times, Eric Tadayon, vice president of the supervisory body, said that the amount of renewable energy consumed in the process of extracting digital currencies has increased significantly. He added that the current way of extracting digital currencies has also become a national problem for his country, Sweden.
Tadayon also said he did not support a total ban on digital currencies; Rather, his proposal is to ban only digital currencies based on the Proof of Work (POW) algorithm. Religiously, the ban forces the digital currency industry to use a proven model that consumes much less energy.
The extraction of digital currencies has become a big business in the last decade and there are no signs of slowing down. Despite a ban on the extraction and exchange of digital currencies in China, one of the largest markets for digital currencies, the computing power of extractors reached unprecedented levels late last year.
Correction is the process by which a blockchain checks the correct blocks, which usually contain transactions. Extractors solve complex problems that require high processing power to validate transactions. Miners compete with each other to solve these problems and are rewarded with digital currency.
In the proof-of-work model, each blockchain participant can approve transactions, which ultimately requires a lot of energy.
On the other hand, the Proof of Stock (POS) model needs a much smaller number of people to approve the exchange. People in the blockchain have shared their digital currencies to create validation nodes to validate transactions.
Both consensus mechanisms are used in different digital currencies, and both have proved somewhat successful. However, there are strengths and weaknesses in both mechanisms.
Read also: War of Mining and Proving Stocks; Is the proof of work ultimately marginalized?
With the proof of operation mechanism, although the cost of energy and mining equipment is higher, this method is more secure; Because the malicious attacker must have a lot of resources to be able to control the authentication of transactions, controlling 51% of the network. The disadvantage of this method is the expensive and slow scalability of this method; As the amount of energy consumed and the equipment required increases over time.
Evidence-based blockchains that use digital currencies or tokens as validators also have high speed and scalability, as they do not require energy or digging equipment. The disadvantage of these blockchains, however, is that network control can be achieved more easily. All you need is more money.
The publication of the European Securities Regulator proposes a ban on evidence-based digital currencies first appeared in Digital Currency.