The European Securities and Markets Authority’s Vice Chair, Erik Thedéen, has expressed worry about the expanding usage of renewable energy for Bitcoin mining. Thedéen recently told the Financial Times that Bitcoin (BTC) mining has become a “national concern” and that cryptocurrency might jeopardize climate change goals.
He urged European regulators to stand against proof-of-work mining, which is prevalent in Bitcoin and a few other offshoot cryptocurrencies. He also argued that proof-of-stake was a superior, more energy-efficient option.
In November 2021, Melanion Capital, a Paris-based alternative investment group, responded to the rising push for a ban on proof of work mining, calling it “totally incorrect.”
Bitcoin’s decentralized character has no lobby or group to defend its interests, according to the investment company, and this should not be exploited as a chance to introduce laws deeming a business unlawful owing to its lack of defensive forces.
According to a fund manager, Sweden’s request to restrict crypto mining is “totally misguided.”The Bitcoin network’s energy consumption was one of the most contentious issues in 2021, with Elon Musk, Jack Dorsey, and Michael Saylor all participating in arguments.
Effect on Businesses
Tesla dropped Bitcoin as a payment option, citing the Bitcoin network’s high energy consumption. Unlike Thedéen, though, most of the opponents had no objections to the use of renewable energy up until recently. According to Musk, Tesla might reconsider introducing a Bitcoin payment option if 50% of the Bitcoin network’s power comes from renewable sources.
China’s Bitcoin mining ban, enacted in May of last year, proved to benefit the ecosystem, as it not only dismantled the highly centralized Bitcoin mining business but also aided in the transition to renewable energy.
According to the Bitcoin Mining Council’s Q3 report, the Bitcoin network used 58 percent renewable energy in the third quarter of 2021.
Swedish Call For Crypto Mining Ban Referred to as “Misinformed”
Meanwhile, Crypto-related fund managers reacted angrily to a Swedish financial watchdog’s request for a European Union-wide ban on proof-of-work (PoW) crypto mining, primarily used to generate new Bitcoin (BTC).
Melanion Capital, a Paris-based alternative investment business best known for its Bitcoin ETF, responded to the Swedish Financial Supervisory Authority and Swedish Environmental Protection Agency’s proposal to prohibit PoW mining throughout Europe.
“The allegation that Bitcoin miners put the electrical network in jeopardy is entirely false,” Melanion said, adding that Bitcoin miners’ business model is vulnerable to failure as electricity demand rises, resulting in higher energy prices.
Bitcoin miners are complimentary for renewable energy power generation since they recover wasted energy and offer a baseload for a variable resource like wind or hydropower, according to the statement, citing Texas as an example of a state that has opted to embrace miners rather than restrict them.
The Bitcoin mining business has no lobby to protect its interests and negotiate with governments because of its decentralized structure.
Melanion Capital reiterated the point, adding: “The lack of such a political counterbalance for Bitcoin miners should not be used as an excuse to enact legislation that makes an enterprise unlawful due to its lack of defensive capabilities.”