In an effort to mitigate the growing use of energy within the cryptocurrency space, the European Union is going to develop an energy efficiency label for cryptos such as bitcoin (BTC-USD), Bloomberg reported, citing a draft proposal set to be released later on Tuesday. In a collaboration with international partners, the European Commission will create a labeling system that seeks to encourage cryptos to switch to more eco-friendly mechanisms like Proof-of-Stake, which ethereum's (ETH-USD) blockchain adopted in mid-September via its Merge. The use of the energy-intensive Proof-of-Work system, which is used by bitcoin (BTC-USD), has faced regulatory scrutiny around the globe, especially a series of developed nations put their focus on the low-carbon transition. Of note, PoS uses nearly 100% less energy than PoW. “Just as their use has grown significantly, the energy consumption of cryptocurrencies has more,” the EU’s executive arm said in the draft, as quoted by Bloomberg. “In harnessing the use of cryptocurrencies and other blockchain technologies in energy markets and trading, care must be taken to use only the most energy efficient versions of the technology.”The document further revealed that the bloc will come out with a report evaluating the climate impact of the crypto industry by 2025. Also, countries should be ready to stave off mining activities in the event of an electricity shortage, in a move that could make miners ...
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