Proof-of-work crypto mining should be banned in the EU, says European markets regulator

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Erik Thedéen, the vice chair of the European Securities and Markets Authority, said the European Union should ban proof-of-work mining for bitcoin, according to a Financial Times report.

European regulators should instead prioritize proof-of-stake mining over the more energy-intensive proof-of-work mining, he told the FT. 

«We need to have a discussion about shifting the industry to a more efficient technology,» Thedéen said. 

The vice chair called for a bloc-wide ban on proof-of-work mining as it has become a «national issue» in his native Sweden due to the large amount of renewable energy it uses. The energy-intensive work impedes climate goals and takes away resources from other projects, Thedéen explained.

«The solution is to ban proof-of-work,» he said.

The two primary ways to verify cryptocurrency transactions are through proof-of-work and proof-of-stake.

Proof-of-stake — the less energy-intensive method — asks participants to put up cryptocurrency as collateral for the opportunity to successfully approve transactions. 

Proof-of-work requires participants to expend large amounts of computational resources and energy to generate new blocks on the blockchain. It is a more secure method, though it consumes more energy. 

The energy needed to collect bitcoin, among other tokens, through proof-of-work mining continues to raise controversy. Last year, Elon Musk said Tesla would stop taking bitcoin payments, citing the network's energy use. 

Tesla will only start accepting bitcoin as a form of again once mining uses 50% renewable energy, he said, adding that crypto «is a good idea…but this cannot come at great cost to the environment.»