Is the Bitcoin ban imminent in the EU? Mining as a threat to environmental protection!

10/11/2022, 04:11 PM
Is the Bitcoin ban imminent in the EU? Mining as a threat to environmental protection!
The EU Commission is planning to introduce an efficiency class system for cryptocurrencies by 2025. This would assess the underlying blockchain for sustainability. Minimum standards for energy consumption would then be set. In addition, the Commission also wants to evaluate the "climate impact of new technologies" in the crypto market, including discussing "political options" to weaken environmentally harmful crypto technologies, particularly in relation to the consensus mechanism.

One possible political option could be to ban proof-of-work (PoW) systems outright, as has been suggested by the US government. However, it is more likely that green funds and other sustainable finance products would simply exclude PoW cryptocurrencies like Bitcoin from their portfolios.

The new class system would be based on the recently finalized EU Crypto Regulation (MiCA), which requires providers to disclose the energy consumption and environmental impact of assets. With the efficiency class system, the Commission is taking things one step further.

EU member states are being urged to take measures to reduce the electricity consumption of crypto miners. According to the EU, 10% of digital mining activity currently takes place in Europe. However, no source is given for this claim.

Read the MiCA Agreement online as PDF

At the same time, the EU Commission is praising the recent merge of the second largest cryptocurrency Ethereum to Proof of Stake. This has resulted in a 99% reduction in energy consumption. The process has shown that "the crypto world can be more energy efficient", according to Brussels. In the future, they want to promote "environmentally friendly consensus mechanisms". These should become the new "gold standard", it is said. This would be done through their own blockchain infrastructure.

Mining Contra Arguments

Cryptocurrency mining is bad for the environment for a variety of reasons. First, it requires a lot of energy to run the computers that do the mining. This energy often comes from coal-fired power plants, which release greenhouse gases into the atmosphere. Second, mining also results in the release of other pollutants, including mercury and sulfur dioxide. These pollutants can damage the environment and human health.

Third, cryptocurrency mining can lead to the destruction of habitats. This is because the mining process often involves digging up large amounts of earth, which can disturb or destroy wildlife habitats. Finally, cryptocurrency mining can also use up a lot of water, which can strain local water resources.

All of these factors contribute to why cryptocurrency mining is bad for the environment. It is important to be aware of these impacts so that we can minimize the damage that mining operations can cause.

Mining Pro Arguments

Cryptocurrency mining is not bad for the environment for a few reasons. First, cryptocurrency miners use a lot of energy because they need to solve complex mathematical problems in order to add new blocks to the blockchain. However, this energy use is offset by the fact that cryptocurrency mining is often done using renewable energy, such as solar and hydro power. In fact, many cryptocurrency mines are located in areas where renewable energy is abundant.

Second, cryptocurrency mining helps to secure the blockchain, which is important for maintaining a decentralized and secure network. If the blockchain were to be compromised, it would be much easier for bad actors to take control of the network. Cryptocurrency mining helps to prevent this by making it more difficult for bad actors to add new blocks to the blockchain.

Third, cryptocurrency mining can actually be beneficial to the environment. For example, Bitcoin miners are rewarded with new bitcoins for their work. This incentive system encourages miners to continue to mine, which helps to ensure that the network remains secure and decentralized. In addition, as more people mine cryptocurrency, the cost of mining decreases, which also helps to reduce the environmental impact.

Overall, cryptocurrency mining is not bad for the environment. In fact, it can actually be beneficial to the environment in many ways.