- This system is used by the two most important cryptocurrencies, bitcoin and ether
The European Securities and Markets Authority (ESMA) appealed to EU member states
They called on local authorities to ban Proof-of-work mining
Vice-President of the European Securities and Markets (ESMA) Eric Theden called for a ban on Proof-of-work mining in the European Union. The official made a request to the regulators of the countries of the European Union. In his opinion, the authorities at the local level should force the crypto industry to switch to less energy-intensive Proof-of-stake mining.
What is the problem201920
Proof-of-work model is built so that miners use high-power equipment for solving complex mathematical problems. They record transactions on the blockchain and are rewarded for doing so. Both the world’s largest cryptocurrencies, bitcoin and ether, use this model.
Proof-of-stake mining is less energy-intensive because users have the right to confirm transactions depending on how much (stake) they invested in the network. Ethereum plans to switch to a Proof-of-Stake model this year. ETH for hitting a block
What threatens such a ban201920
The European Union occupies a small share in the mining industry according to Proof-of-work system. Now the United States dominates here (share 35,4%), Kazakhstan (10,1%) and Russia (,10%). However, due to the recent mining ban in China, EU members have fears that miners will move en masse to Europe.