EU set to roll out a law diminishing Proof-of-Work mining

    19 Oct 2022

    The European Union (EU) released a package of documents related to an action plan for implementing the European Green Deal and the REPowerEU Plan, which aim at energy savings by digitalizing the energy sector. In place of PoW mining, the EU plans to increase the Proof of Stake (PoS) concentration in the bloc.

    According to a report by Bloomberg on Oct. 18, the European Union is set to release a draft law that will enable the European Commission to work with international partners to come up with a grading measure for crypto projects.

    Continuing its efforts to ensure the end of Proof-of-Work (PoW) mining in European countries, the EU is coming up with a new draft law.

    Also, the Union is planning on shifting the focus toward Proof-of-Stake (PoS). Used by the likes of Ethereum and Cardano, PoS is considered far superior to PoW.

    This will be used to encourage the use of more environmentally friendly cryptosystems, PoS especially. PoS is consuming significantly less energy than PoW and has been noticing a lot of interest ever since Ethereum shifted to PoS.

    “Just as their use has grown significantly, the energy consumption of cryptocurrencies has more. In harnessing the use of cryptocurrencies and other blockchain technologies in energy markets and trading, care must be taken to use only the most energy-efficient versions of the technology,” the draft law says.

    This is not the first time the EU has sought to put an end to PoW mining under the guise of energy conservation. This March, the EU voted on a proposal that could have potentially banned Bitcoin across the Union countries, however, the proposal was rejected.

    The European Commission claims it will provide tools and methodologies in future updates to calculate these measures and the climate impact of blockchain and digital technologies. Meanwhile, the crypto industry faces a new period of uncertainty regarding a change to its approach to crypto, digital assets, and Bitcoin miners.

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