Letter #94: The True Value of Bitcoin and Proof of Work

Dear Readers,

Regulation of Bitcoin has been on the minds of governments and regulators for the past several months. After the U.S. government released an executive order with questionable motives just last week, the European Union came out with its own proposal to further regulate the digital asset space. Unlike the U.S. government’s move however, the motives behind the European Union’s proposal were not in question and represented a direct attack against Bitcoin and the Proof of Work (PoW) consensus mechanism on which its blockchain operates.

In short, the European Union’s parliament voted on language within its pending legislative framework governing digital assets, “Markets in Crypto Assets”, that by all appearances attempted to ban Proof of Work. The proposed language reads as follows:

[Digital assets] shall be subject to minimum environmental sustainability standards with respect to their consensus mechanism used for validating transactions, before being issued, offered or admitted to trading in the Union.

Thankfully, the EU parliament voted against the measure. PoW in the EU is still safe, for now.