![]() Proof-of-work is employed by older cryptocurrencies, most notably Bitcoin and Ethereum, though the latter has plans to soon upgrade to the newer and more energy-efficient proof-of-stake (PoS) model through its Ethereum Merge later this year. This requires vastly increasing computing power (and therefore electricity) as the network and its ledger grow in size and users and the mining algorithm grows exponentially in difficulty. Proof-of-Work is the name for the consensus mechanism that uses hash power (computing power) to validate a blockchain’s transactions and issue new cryptocurrency rewards for “mining”. Here’s a very simplistic and quick explainer of PoW vs PoS: In this article, we’ll take a look at the proposal, what is likely to happen next, and whether proponents of the PoW ban still have any tricks left in their bag. The MiCA provision would have amounted to an outright ban on the oldest cryptocurrency and might well have made Europe a backwater for innovation in the digital-assets sector. ![]() ![]() While newer cryptocurrencies tend to validate their nodes with a proof-of-stake (PoS) model – which Ethereum is currently moving towards – Bitcoin essentially has no practical path forward to make such a transition. The significance of the ban, had it gone into effect, would be hard to overstate. The rejected MiCA provision would have restricted the use of proof-of-work (PoW) cryptocurrencies such as Bitcoin due to objections over their energy usage. The crypto community is breathing a collective sigh of relief after the European Union jettisoned a regulatory provision on 17 March 2022 that some had called a “de-facto Bitcoin ban.” The provision in question was a part of the EU’s long-awaited Markets in Crypto Assets (MiCA) framework, which one day will standardize licensing for crypto firms across the union.
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