Is this the end of Bitcoin? Detailed analysis

Posted on

Is this the end of Bitcoin? Detailed analysis of av. PM Mishra

The year 2020 was a turning point for cryptocurrencies. Despite the devastating effects of the global Covid-19 outbreak, Bitcoin has shattered previous price records, largely due to rising institutional demand that many in the cryptocurrency community believe will propel the commodity to unimaginable heights. However, we doubt that the changes in the cryptocurrency industry will remain positive even after some regulations come into effect. As the industry awaited increased regulatory scrutiny, proof-of-work (PoW) cryptocurrencies have become a problem of late. If recent reports are to be believed, the European Union (EU) may be on the verge of banning cryptocurrency mining over energy concerns.

The proposal to ban cryptocurrency mining in the 27 member states of the European Union comes mainly from Swedish regulators who fear renewable energy will be used to mine cryptocurrencies like bitcoin instead of being diverted to public use. The motion was backed by leading politicians in Germany, Spain and Norway.

What is cryptocurrency mining?

cryptocurrency mining is a process that competes with cryptocurrencies and uses a Proof-of-Work (PoW) mechanism to verify and add new transactions to the blockchain. The miner who wins the tournament gets a share of the money and transaction fees.

How does cryptocurrency mining harm the environment?

The energy required for the mining process, i.e. the way new digital coins are produced, is the most visible environmental impact of cryptocurrency. While most people are familiar with bitcoin mining, mining is used in a variety of cryptocurrencies. However, since the introduction of Bitcoin, it has become increasingly difficult to create new currency units through mining. Since the coin supply is limited to 21 million units, the more units created, the fewer units there are to mine, and minting new units requires more computing power. The estimated carbon footprint of power plants that provide electricity is a major cause of environmental concern. It is estimated that a single bitcoin transaction uses 2,292.5 kilowatt hours of electricity, enough to power a typical US household for nearly 78 days. The problem of physical e-waste must also be taken into account. Mining is done with customized computers, graphics cards and ASICs, among other things. People are constantly upgrading and discarding old hardware because increased computing power gives them an advantage in the battle to mine more parts, resulting in up to 30,000 tons of e-waste annually.

Therefore, a future ban on cryptocurrency mining would be a death sentence for Bitcoin in the EU, according to MEP Stefan Berger, who oversees the proposed regulatory framework for dealing with cryptocurrencies in the Union. Markets in Crypto Assets (MiCA), the latest version of the European Union’s (EU) proposed regulatory framework to regulate virtual currencies, still includes a clause that could ban the use of proof-of-work cryptocurrencies, the spokesman said by PM Mishra, Managing Partner of Finjuris Counsel FZ-LLC, UAE, Finlaw Associates, India, BCH Consulting, Europe.

Leave a Reply

Your email address will not be published. Required fields are marked *