The EU Parliament’s Committee on Economic and Monetary Affairs voted against a proposed rule that would have effectively banned bitcoin and many other cryptocurrencies throughout the European Union because of the energy-intensive method of ‘mining’, as the method of minting new cryptocurrencies is called.
The proposed rule would have added a ban on Bitcoin’s proof-of-work mining to the new Markets in Crypto Assets (MiCA) bill that will soon create an extensive regulatory framework for crypto in the 27-member bloc.
While the rule backed by Greens and other parliamentary groups had been defeated before, it was believed this vote would be very close. In the end, the vote was 34-27. But the rule could be added as an amendment when the bill goes through the rest of the voting process.
Proof-of-work is used by Bitcoin and other blockchains that work the same way as a method for authenticating transactions and adding ‘blocks’ to the blockchain ledger upon which these currencies are built. That includes the main cryptocurrencies used for payments — Ethereum’s ether, Litecoin, bitcoin cash, and even memecoin dogecoin.
Most blockchains developed in the past few years use proof-of-stake, or PoS, a much less energy-intensive alternative.
That will soon include Ethereum, the No. 2 blockchain by both market capitalization and energy use, which is switching to PoS, in a massive, yearslong process. However, that decision was based more on the need to improve its scalability to become an effective payments platform.
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