Although a new heat wave is coming in Europe, the ecological impact of the new technologies cannot leave European authorities indifferent. Europe is already suspicious of Bitcoin and cryptocurrencies due to the lack of regulation of this sector. But its ecological impact could be an additional argument when deciding whether it should be banned.
Mining: a threat to ecology
The European Central Bank (ECB) has just released a new research paper on the climate risks of cryptocurrencies. This July 12th report focuses specifically on blockchain in Proof of Work and specifically Bitcoin. This report goes as far as comparing these blockchains to vehicles that use fossil fuels.
Conversely, a blockchain using Proof of Stake consumes 99% less energy. Therefore the authorities have a choice to make: ban blockchains in Proof of Work, or at least encourage more use of blockchains in Proof of Stake. In both cases, Bitcoin is among the networks rejected by the European Bank. The calculation of their ecological impact, as well as the impact of Ethereum during the remaining months before its update, defeats the objective of reducing greenhouse gas emissions for eurozone countries.
Will Proof-of-Scale blockchains prevail?
Even if it only concerns the European Union, this report exemplifies the balance of power between the two main types of blockchain. If the older Proof of Work blockchains still claim to have the advantage of decentralization and security, the Proof of Scale is becoming more and more essential. Ethereum may even have The Merge update in this takeover. Vitalik Buterin defends this move indeed. He believes that Proof of Scale has more security and greater decentralization than Proof of Work. In addition, Proof-of-Scale blockchains are increasingly seeking ecological neutrality. Polygon, Cardano, Algorand are arguably the best examples. Faced with these competitors, Bitcoin risks becoming a thing of the past.
Can Bitcoin still be indifferent to its ecological impact? More and more miners use electricity from renewable energy. However, the latest report from the European Central Bank shows that this network is still problematic. Perhaps its survival will depend on a technological revolution of this network.