– The European Central Bank (ECB) has criticised Proof-of-Work (PoW) mining as a significant climate change risk in a research bulletin published in July.
– The report specifically mentioned Bitcoin, but also raised issues with Ethereum, despite its transition to a Proof-of-Stake (PoS) consensus mechanism.
– Using data from various sources, researchers said Bitcoin and Ethereum mining activity combined uses more energy than individual mid-sized countries, such as Spain, the Netherlands, and Austria.
– The data also showed that estimated annual emissions, as of May 2022, exceeded target greenhouse gas (GHG) emission savings for many Euro-zone countries.
– The report acknowledged industry initiatives, such as Ethereums PoS transition and the Bitcoin Mining Councils efforts to decarbonize and educate on the sustainable mix of energy sources used in BTC mining.
– But researchers largely dismissed the last point because of unclear methodology, lack of details, and unreliable data.
– The report mentioned several scenarios resulting from a potential clampdown on PoW mining, including an outright ban.
– It also spoke of the debate among lawmakers on the appropriate course of action, citing the recent approval of the Markets in Crypto-assets (MiCA) framework on June 30.
– MiCA did not enact a ban on PoW mining and was praised as providing a much-needed framework for the cryptocurrency industry. However, it set about several heavy-handed requirements, especially for stablecoin issuers.