The legal status of Bitcoin mining in the European Union depends on the results of today's vote in the European Parliamentary Committee on Markets in Crypto Assets (MiCA).
A controversial line on the โminimum environmental sustainabilityโ of crypto mining has been reintroduced to the account after being previously removed. The new line would require blockchain operators to submit an implementation plan detailing how they will meet environmental sustainability. If a plan is not submitted, the mining or trading of coins in the EU may be prohibited.
Although not specifically stated, 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.
From Bitcoin (BTC) is decentralized, however no implementation plan can be issued on its behalf. The absence of such a plan may threaten the existence of Bitcoin mining operations throughout the EU.
The EU accounts for around 12-14% of the global hash power in the Bitcoin network, with Germany and Ireland contributing the majority of that. according to last year's data from the University of Cambridge and extra.
Concerns about the energy consumption and carbon emissions of Bitcoin mining are now at the forefront of the debate on how the EU should regulate it. However, those concerns start to seem misplaced when confronted with the raw data.
According to a report from the Frankfurt School last November, as of August 2021, the Bitcoin network annually required 90.86 Terrawatt hours (Tw/H) of energy. That's about 0.05% of total world consumption. The network is responsible for only around 0.08% of total global carbon emissions, although these metrics are difficult to calculate precisely.
French parliamentarian Pierre Person warned that a mining ban would drive talent and innovation out of the region. He said in a tweet on Saturday that for forbidding Bitcoin and ether (ETH), and โcomplicating the use of NFT and DeFi, the European Parliament is mortgaging our monetary and financial sovereignty.โ
Related: Consolidation and centralization: how Europe's new AML regulation will affect cryptocurrencies
If the bill passes as is, Ethereum will not be involved for long. the The network is expected to complete Ethereum 2.0 "Merge" sometime this year in a proof of stake (point of sale) network that will not require physical mining rigs to reach network consensus. However, there may be more serious ramifications for Bitcoin miners.
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