Meltem Demirors, chief strategist at $5 billion crypto-asset management firm CoinShares, has stated that governments are silently moving toward banning Bitcoin by attacking the proof-of-work concept.
Speaking during a panel at the Crypto Bahamas Conference, Demirors said that politicians worldwide want to ban Bitcoin due to energy consumption, but in reality, the decentralized nature of the asset is under threat.
She believes that attacking mining is an almost surefire way to counter the threat posed by Bitcoin, and a successful Proof of Work ban is likely to lead to the massive collapse of the crypto market.
Demirors further cautioned that strict regulations could easily turn into energy-efficient PoS despite the focus on PoS.
“What we’re seeing around the world, and something that really worries me, is the use of a Proof of Work attack, and in particular, Bitcoin for energy, as a way to actually implement a ban on Bitcoin without mentioning it <…> Without Bitcoin and Bitcoin as a sink of liquidity and Bitcoin as the ultimate source of liquidity, none of this exists. So I think it’s incredibly short-sighted,” she said.
Bitcoin Price Drops Below $35,000
Her warning appeared before Bitcoin, and the general crypto market suffered a major price correction, trading at less than $35,000. As Finbold reported, on May 8 Bitcoin was trading at $34,600, a nearly 10-month low.
However, the strategist expressed confidence that the attempt to ban Bitcoin would not materialize because the asset has a strong community, and decentralization is the right thing to do.
Speaking during the session, Elizabeth Stark, co-founder and CEO of Lightning Labs, emphasized that attacks on Bitcoin are due to its decentralized nature.
Legislators enact proof of work legislation
The warning comes as more jurisdictions are working on laws potentially banning Proof of Work protocols due to high power consumption. For example, legislators in the New York Assembly have passed a bill that would have imposed a two-year delay on certain areas affecting the state’s proof-of-work crypto-mining business.
According to the bill, the authorities are required to conduct a comprehensive study before moving forward. However, the bill suffered a setback as the Senate Conservation Committee reportedly chose not to take up the legislation at its last meeting for the current legislative session.
Elsewhere, Finbold reports, the European Securities and Markets Authority (ESMA) has been pushing for an EU ban on crypto-mining for PoW-backed assets. However, the EU Parliament voted against banning Proof of Work mechanisms.
Although Bitcoin is heading towards mass adoption, the asset has been delayed due to concerns about energy consumption. Notably, Ethereum, the number two digital currency, is shifting toward the Proof of Stake protocol, and there are calls for Bitcoin to follow suit.
In this context, environmental organization Greenpeace along with Ripple co-founder Chris Larsen unveiled a lobbying campaign that is pushing Bitcoin to move towards PoS.
Most lobbyists seek to demystify common myths about bitcoin’s energy consumption. Despite the energy concerns, the latest data suggests that Bitcoin’s impact on the environment may not be as harmful as it was reported.
A report by the Bitcoin Mining Council revealed that during the first quarter of 2022, Bitcoin’s electricity consumption fell by about 25% compared to the same period one year ago. At the same time, miners are increasingly taking advantage of renewable energy to reduce Bitcoin’s carbon footprint.