•         EU policymakers to offer Ethereum protection over Bitcoin
•         Bitcoin would be lawfully appealed to change to proof-of-stake
•         EU decision comes after majority voting against the PoW ban

In April 2022, there were leaks of the European Union’s (EU) internal documents that revealed that the union would shield Ethereum at Bitcoin’s costs.

The EU is willing to support Ethereum due to its plans to transit to an energy-saving mining process and emits zero CO2. This transit will favor the EU’s goals on climate change under the Paris agreement.

The internal document also showed that Bitcoin would be lawfully appealed into transitioning to the proof-of-stake consensus from its proof-of-work consensus protocol.

In addition, the lawmakers are working on safeguarding tokens that are putting in the effort to see that their environmental impact is reduced significantly.

Cryptocurrencies that use PoS Protocol are more likely to reduce their energy consumption level and reduce their carbon emission levels, unlike the PoW protocol.

EU concerns come after its recent voting against the transfer of crypto assets to crypto wallets that are not hosted by any financial institution or in-betweens.

EU continuously shows concern with PoW consensus protocol

In March 2022, Mica’s report showed that the EU could stop crypto exchange platforms from transacting in proof-of-work coins.

This led to a controversial argument, and the ECON committee from the EU voted against the ban of crypto that relies on PoW, which includes Bitcoin.

The majority who voted against the ban chose a more conscience amendment. They opted to put crypto under the category of assets that will provide sustainability, just the way other financial products do.

Because of its renewed examination of PoW, the EU lawmakers supported Ethereum and other sustainable tokens. The EU will offer these cryptos protection, leaving out Bitcoin.

Bitcoin’s transit to PoS protocol doing rounds

Cambridge University revealed that Bitcoin consumes 131 TWh of electricity in a year. This amount is similar to the amount of energy Ukraine consumes annually.

Bitcoin uses the POW protocol in creating its blockchain. If it continues to be adopted vastly, its energy consumption will grow proportionately to its price and usage.

In April 2022, the founder of Bitcoin Suisse, Niklas Nikolajsen, mentioned that Bitcoin would only move to the PoS protocol if Ethereum transited to the same protocol and proved that it worked.

Ethereum had announced that it would be merging its ETH 1.0 with ETH 2.0. This merge will enable Ethereum to transit from PoW to the PoS mechanism. Consequently, Ethereum will reduce its energy consumption and reduce carbon emissions.

Ethereum’s determination to switch to the PoS has been having delays. Two years on since Niklas’ announcement, the Ethereum blockchain is yet to make its transition.

Bitcoin purely relies on proof-of-work. The hashing power is very high, making it very costly to record the amount of computing energy required.

Due to its ability to lose trust and security, the Bitcoin transition seems impossible, not forgetting the numerous technical difficulties it may encounter.