Proof-of-Stake сryptocurrency рrojects are greener, says ECB
According to European Central Bank (ECB) experts, Proof-of-Stake (PoS) cryptocurrencies are the basis of sustainable development digital assets due to their energy efficiency. While the Proof-of-Work (PoW) algorithm was subjected to a lot of criticism from their side.
In support of its statement, the ECB operates with the following data: the average electricity consumption of the Bitcoin and Ethereum networks for 2021 exceeded the numbers of Spain, Austria and the Netherlands for the previous year. This is also more than the capacity of the world’s largest hydroelectric gravity dam Three Gorges Dam.
Despite the “doubtful” benefits for society, according to ECB analysts, blockchain technology has great potential. That is why, a possible solution to this problem may be the stimulation by states of projects launched on the basis of Proof-of-Stake.
The PoS algorithm assumes that not the computing power of the equipment is used as a resource, but digital assets (in the process of staking). This makes PoS networks more energy efficient.
The impact of cryptocurrency mining on the environment is discussed more often. So, in April 2022, the US Congress also noted the “less energy-intensive” Proof-of-Stake technology. A group of congressmen have asked the Environmental Protection Agency to review the mining industry for environmental risks. The Bank of Sweden also called for a ban on Bitcoin in order to protect the environment.
