The legal status of Bitcoin mining in the European Union depends on the results of a March 14 vote in the European Parliament’s Committee on Markets in Crypto Assets (MiCA).
A controversial line regarding the “minimum environmental sustainability” of crypto mining is: reintroduced on the account after being closed earlier. The new rule requires blockchain operators to submit a rollout plan detailing how they will meet environmental sustainability compliance. Failure to submit a plan could result in coins not being mined or traded in the EU.
While not specifically mentioned, the bill would directly affect proof-of-work (PoW) chains. PoW is the consensus algorithm used by the Bitcoin network, Ethereum and several other crypto assets.
However, since Bitcoin (BTC) is decentralized, no rollout plan can be drawn up on its behalf. The lack of such a plan could threaten the existence of Bitcoin mining activity across the EU.
The EU accounts for about 12-14% of the global hash power on the Bitcoin network, with Germany and Ireland contributing the bulk of that according to last year’s data from Cambridge University and statistic†
Concerns over energy consumption and carbon emissions from Bitcoin mining are now at the forefront of the debate over how the EU should regulate it. However, those concerns start to seem misplaced when confronted with the raw data.
According to an report by Frankfurt School last November, as of August 2021, the Bitcoin network required 90.86 Terrawatt hours (Tw/H) of energy annually. That’s about 0.05% of total global consumption. The network is responsible for only about 0.08% of total global CO2 emissions, although these statistics are very difficult to calculate accurately.
French MP Pierre Person warned that a mining ban would drive talent and innovation out of the region. He said on March 12th 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 Will Affect Crypto
If the bill is passed unchanged, Ethereum will not be involved for long. The network is expected to complete “The Merge” this year, making it a proof-of-stake (PoS) network that does not require physical mining rigs to achieve network consensus. However, there could be more serious consequences for Bitcoin miners.