- The vice chair of the European Securities and Markets Authority called for a ban proof-of-work bitcoin mining.
- "We need to have a discussion about shifting the industry to a more efficient technology," Erik Thedéen told the Financial Times.
- Proof-of-work mining is more energy intensive than proof-of-stake mining, but less secure.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Erik Thedéen, the vice chair of the European Securities and Markets Authority, said the European Union should ban proof-of-work mining for bitcoin, according to a Financial Times report.
European regulators should instead prioritize proof-of-stake mining over the more energy-intensive proof-of-work mining, he told the FT.
"We need to have a discussion about shifting the industry to a more efficient technology," Thedéen said.
The vice chair called for a bloc-wide ban on proof-of-work mining as it has become a "national issue" in his native Sweden due to the large amount of renewable energy it uses. The energy-intensive work impedes climate goals and takes away resources from other projects, Thedéen explained.
"The solution is to ban proof-of-work," he said.
Proof-of-stake — the less energy-intensive method — asks participants to put up cryptocurrency as collateral for the opportunity to successfully approve transactions.
Proof-of-work requires participants to expend large amounts of computational resources and energy to generate new blocks on the blockchain. It is a more secure method, though it consumes more energy.
The energy needed to collect bitcoin, among other tokens, through proof-of-work mining continues to raise controversy. Last year, Elon Musk said Tesla would stop taking bitcoin payments, citing the network's energy use.
Tesla will only start accepting bitcoin as a form of again once mining uses 50% renewable energy, he said, adding that crypto "is a good idea…but this cannot come at great cost to the environment."