Proof-of-Work Prohibition Proposal Suddenly Appeared in EU Cryptocurrency Bill

The Proof-of-Work ban, which had previously been repealed, out of the blue reappeared in the EU’s cryptocurrency bill.

As reported by Coinlive, in early March, European Union (EU) lawmakers agreed to take out a provision that could lead to a ban on coins utilizing the Proof-of-consensus.of-Work algorithm. this kind of as Bitcoin or Ethereum) from the “Markets in the cryptocurrency industry” (MiCA) bill.

MiCA is the bill underneath consideration that will reshape the adoption of cryptocurrency in Europe. Launched in September 2020, the bill calls for the European Central Bank (ECB) to create uniform principles for cryptocurrency suppliers and issuers in the EU area. In quick, MiCA serves as a precise regulatory framework for cryptocurrencies across the European Union.

Initially, the MiCA incorporated a necessity that, by 2025, the law would ban the issuance, circulation and trading of cryptocurrencies that “have an environmentally unsustainable consent mechanism.” Opponents of the bill mentioned the ban is tantamount to “killing” Bitcoin and Ethereum in Europe and helps make it extremely hard for regulators to hold Proof-of-Work coins for their prospects.

Later, lawmakers made a decision to take out the controversial request from the MiCA draft in early March.

However, as of March twelve, some cryptocurrency end users on Twitter have identified that in the most up-to-date amendment to the law, anticipated to be mentioned and accepted in the European Parliament on 14 / 14.03, the clause banning environmental cryptocurrencies has reappeared. This details was confirmed by Patrick Hansen, a cryptocurrency skilled in the EU area.

While there are some wording modifications, the clause even now in essence calls for:

“Cryptocurrencies will have to meet satisfactory environmental sustainability specifications with their consensus mechanism prior to they can be launched, promoted and traded in the European Union.

Crypto assets previously issued, promoted and traded in the European Union [ngày luật đi vào hiệu lực] will have to create and apply a gradual prepare to take out the adverse influence to be certain compliance with the law “.

It can be witnessed that the law calls for lengthy-standing cryptocurrencies this kind of as Bitcoin or Ethereum to adjust the Proof-of-Work consensus algorithm, which has lengthy been criticized for its power consumption. While Ethereum strategies to move forward with Proof-of-Stake, confirming transactions from held coins alternatively of utilizing miners to remedy the algorithm, the biggest and most well-liked cryptocurrency, Bitcoin, is not. I can not do this, simply because that would fully ruin the most fundamental rules on which it is developed.

Many concern that if the law is passed throughout the session of the European Parliament on March 14, it will ruin the development possible of the cryptocurrency sector in the EU, as nicely as trigger lots of businesses in the area to get rid of competitors, pushing them to other nations in Asia. or the Middle East, in which cryptocurrency regulation is turning into less difficult.

Even so, hopes had been not fully quenched when Patrick Hansen mentioned the unique MiCA proposal that did not involve a Proof-of-Work ban would also be presented to EU lawmakers. However, it is not clear in which course the end result of the vote in the European Parliament will go, specifically as Europe has lots of other difficulties to take into account this kind of as the power crisis resulting from the Russia-Ukraine conflict.

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