Bitcoin and Ether, two popular cryptocurrencies, have raised concerns about the amount of electricity they consume and the resulting greenhouse gas emissions that heat up our planet.

The EU Parliament lifted a de facto ban on Bitcoin and Ether today. The controversial proposal aimed to reduce cryptocurrency pollution. Despite the proposal's failure, policymakers will likely scrutinize cryptocurrencies as the EU addresses the climate and energy crises. Toxic pollution has become a global game since China banned cryptocurrency last year.

According to a report by The Verge, on Monday, the European Parliament's Economic and Monetary Affairs Committee voted to move forward with a legislative framework to regulate digital assets. It also decided to drop a proposed rule in the framework that would have prohibited EU citizens from using an energy-intensive process to generate cryptocurrencies such as Bitcoin.

Bitcoin and Ether, two popular cryptocurrencies, have raised concerns about the amount of electricity they consume and the resulting greenhouse gas emissions that heat up our planet. It is already difficult for the European Union to wean itself off Russian gas supplies because of an energy crisis that has sent electricity rates skyrocketing in the last year.

Each year, the Bitcoin network consumes more electricity than the country of Norway and would be ranked 27th in the world if it were a country in its own right. The majority of that electricity is used in a "proof of work" process for verifying transactions that are purposefully inefficient in terms of energy consumption.

Bitcoin miners use specialized computers to solve complex puzzles in order to generate new tokens and verify transactions. Those increasingly difficult puzzles, which are baked into the blockchain, are essentially inefficient.

To save energy, the EU parliament considered banning puzzle-solving. Earlier framework versions called for the gradual replacement of proof of work with less energy-intensive verification methods, according to CoinDesk. Experts slammed the news, calling it a death blow for Bitcoin. The Verge received confirmation from parliament that the rule requiring proof of work was finally removed today. Instead, it asked the European Commission for input on the environmental impact of cryptocurrency mining as part of its efforts to define "sustainable" investment.

For a long time, the crypto industry has been trying to find a solution to its environmental issues. Over the course of several years, the Ethereum network has planned and repeatedly postponed the switch from proof of work to proof of stake, which does away with puzzle-solving. Stake proof consumes a lot less energy and is therefore considered greener.

Bitcoin's energy efficiency problem would be solved if such a move were made. Because all the miners on the network would have to agree to eat their losses if they scuttled their Bitcoin mining operations, no one expects Bitcoin to follow suit. They also argue that it's the most secure method for ensuring blockchain integrity. Any ban on proof-of-work is effectively a ban on Bitcoin without the support of miners.

An energy-hungry blockchain could complicate the EU's race to transform the power grid to meet climate and security goals. Last year, the EU committed to halving its greenhouse gas emissions by the end of the decade. The Russian invasion of Ukraine accelerated the transition to clean energy, as Russia supplies nearly half of the EU's gas imports. The European Union announced new measures last week to reduce reliance on Russian gas in the coming years.