Last Monday, the European Parliament’s Committee on Economic and Monetary Affairs voted to adopt a legal framework to regulate digital assets. During the voting process, panel members received no support for the proposal to ban the use of energy-intensive computing processes to create cryptocurrencies, which are used for Bitcoin and Ethereum mining, among others. We are talking about the Proof-of-Work (PoW) consensus algorithm.
Bitcoin mining uses more electricity than Norway uses in a year. If Bitcoin were a country, it would rank 27th in the ranking of countries by energy consumption. The European Union has long expressed concern about the power consumption of cryptocurrency mining, the production of which ultimately harms the environment due to the increase in greenhouse gas emissions.
After refusing to ban the energy-intensive mining process, the European Commission committee has proposed to weigh the environmental impact of cryptocurrency mining separately, a spokesman for The Verge said in an email to The Verge.
It should also be noted that the adopted draft law will be discussed with the participation of the European Parliament, the European Commission and the Council of the EU before it enters into force. And it is quite possible that the parties will again discuss the possibility of banning the energy-intensive process of cryptocurrency mining.
After the cryptocurrency ban in China, miners shifted cryptocurrency mining to the United States and Kazakhstan, which became the main centers of the crypto industry. In Europe, the share of bitcoin mining is relatively small. According to the Cambridge Center for Alternative Finance, the largest bitcoin miners are in Ireland and Germany – each accounting for just under 5% of the global bitcoin mining share. These numbers are “probably significantly inflated” due to VPN use, analysts at the center say.