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Environmental sustainability at the heart of the EU MiCA bill

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The legal status of Bitcoin mining in the European Union depends on the outcome of the March 14 vote in the European Parliamentary Committee on the Crypto Asset Markets (MiCA).

A controversial line regarding the “minimum environmental sustainability” of cryptocurrency mining has been introduce again to the invoice after was previously taken out. The new line will require blockchain operators to submit an implementation plan detailing how they will comply with environmental sustainability. Failure to submit a plan may ban mining or trading of coins in the European Union.

Although it was not specifically stated, the bill would directly affect the proof of work (PoW) necklace. PoW is the consensus algorithm used by the Bitcoin network, Ethereum, and several other crypto assets.

However, since Bitcoin (BTC) is decentralized, no implementation plan can be issued on its behalf. The absence of such a plan could threaten the very existence of Bitcoin mining operations across the EU.

The EU accounts for around 12-14% of the global hashing power on the Bitcoin network, with Germany and Ireland contributing the majority of that according to last year’s data from University of Cambridge and Statista.

Concerns about the energy consumption and carbon footprint of Bitcoin mining are currently at the forefront of the debate over how the EU should regulate it. However, those concerns are starting to sound optimistic in the face of raw data.

According to a report by the Frankfurt School last November, as of August 2021, the Bitcoin network annually requires 90.86 Terrawatt hours (Tw/H) of energy. That’s about 0.05% of total global consumption. This network accounts for only about 0.08% of total global carbon emissions, although these figures are difficult to calculate accurately.

French MP Pierre Person warned that a ban on mining would push talent and innovation out of the region. He said in one day March 12 tweet that by banning Bitcoin and Ethereum (ETH), and “complicating the use of NFT and DeFi, the European Parliament is mortgaging our monetary and financial sovereignty.”

Related: Consolidation and Centralization: How Europe’s New AML Regulations Affect Cryptocurrencies

If the bill is passed as it is, Ethereum will not be involved for long. The network is expected to be complete”Unify“At some point this year, this will make it proof of stake (PoS) the network will not require a physical mining device to reach network consensus. However, there could be more serious ramifications for Bitcoin miners.