The ECB noted the environmental friendliness of Proof-of-Stake

The European Central Bank recognized cryptocurrencies based on the Proof-of-Stake consensus mechanism as environmentally friendly.

Experts from the European Central Bank (ECB) criticized cryptocurrencies based on Proof-of-Work (PoW) algorithm. But at the same time, they believe that Proof-of-Stake (PoS) projects are one of the successful options for the development of digital assets.

The ECB noted that in 2021, the total electricity consumption of Bitcoin and Ethereum networks exceeded that of Austria, the Netherlands and Spain in 2020. Data from company cryptodefix.

“Estimates of the carbon footprint for bitcoin and ether further show that their combined annual emissions as of May 2022 negate past and target greenhouse gas (GHG) emission savings for most euro area countries,” the report said.

According to analysts, Bitcoin is of questionable benefit to society, but blockchain technology has great potential. The ECB stressed that a possible option for solving environmental problems is to encourage projects based on PoS consensus mechanisms on the part of states.