Most cryptocurrency naysayers highlight the PoW power consumption factor while making a case against the industry. The digital assets industry has not experienced a lot of success in the European markets thus far. VC of the European Securities and Market Authority recently called for a ban on the PoW based digital assets.
VC Erik Thedeen recently claimed that the cryptocurrency mining industry is intercepting the environmental laws under the Paris Treaty. Speaking to the journalists at Financial Times, he claimed that the massive power input required to run the cryptocurrency mining farms had become a national issue for his native country Sweden. Following the same complaints, China decided to ban cryptocurrency mining last year.
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PoW-Based Cryptocurrencies Face Criticism from Traditional Financial Sector
The EU has not been a fan of cryptocurrencies since the very beginning. However, VC Thedeen claimed that he is not proposing the imposition of a cryptocurrency exodus in the EU. He clarified that he is calling for a ban on the cryptocurrency mining farms that are powering PoW based operations. It is worth noting that the largest cryptocurrency projects like Bitcoin and Ethereum depend on PoW.
At present, a great number of PoS consensus model digital assets are entering the market. PoS is getting a green light from Thedeen due to its ability to operate without heavy power input. The dominance of PoW based digital assets is greater than 50% to the aggregate crypto market cap. A crackdown on PoW tokens can mean a shakedown of the entire crypto market.
Bitcoin and blockchain are considered disruptive technology because they manifested the novel idea of decentralization into reality. While the Bitcoin network is often criticized for its massive power consumption, the network has been able to stay online without any hacks or glitches over the last 13 years.
Meanwhile, many cryptocurrency stakeholders do not realize that PoS blockchains are energy efficient but can be purchased. There is an idea that most PoS networks are not wholly decentralized. On the other hand, the Bitcoin network provides complete autonomy to investors and is run by operators spread around the world.