Europe’s Central Bank has made interesting remarks against a background of market volatility and rising inflation. These remarks focused on the bank’s worries about the carbon footprint of mining crypto like BTC and others. It is a known fact that crypto mining requires vast resources like electricity and equipment.
In its latest report on Crypto Mining and related risk to the environment, the bank reinforces its views on the different protocols. The report clearly states that PoW is a threat to planet earth. In contrast, refers to PoS as the only option which is sustainable. In the report, experts compare the energy required to mine BTC to annual energy used by different countries in the EU. According to the report, the combined energy use to mine BTC and ETH cancels out the energy savings made by a majority of EU countries.
The main reason for this significant consumption is the PoW’s mechanism. The report’s authors say that BTC and tokens which use the ETH blockchain are not sustainable. This level of energy consumption puts the transition to green energy in jeopardy. Just recently, ETH conducted an important trial for a Merge using Sepolia’s test net. This trial ensures that the ETH platform is closer to the PoS mechanism.
The report also highlights the tension between carrying on with crypto mining and green transition. Many countries are having to choose between energy sources and levels of consumption. In this context, the report says that there is doubt about how useful BTC is, to society at large. Using cars as an analogy to make a point, the report says that PoS is akin to an electric car. The report also cites the disaster and crash of Terra and the overall effect on the global financial system.