The European Union Plans to Eliminate Bitcoin Mining Once and for All with New Draft Law

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Bitcoin mining was once the only way to get shiny new coins. Other cryptocurrencies tried different methods, but the mining industry was steamrolling so people just bought into the whole idea. Years later it was discovered that it came at a massive environmental cost, so countries like China banned it from use.

Others would follow resulting in many cryptos changing their system to proof-of-stake. Ethereum did so recently, leaving only Bitcoin to rely on the inefficient model. Which is a big problem in addition to the unpredictable volatility, especially now as the EU is looking into ways at banning Bitcoin mining once and for all.

New Draft Law Will Outlaw Mining

According to a newly drafted law in the EU, Bitcoin mining will soon be a thing of the past. The EU is set to release the energy efficiency label soon, outlawing Bitcoin mining and encouraging the development of environmentally-friendly crypto systems. Just to be clear – this has nothing to do with the way things stand in the crypto legality department. So far, cryptocurrencies are still not regulated in the European Union. But, it’s a move in the right direction, going out with the old and in with the new.

It calls for the international political stage to apply pressure on the remaining crypto miners. In the midst of an energetic crisis and with winter knocking on our doors, the last thing Europe needs are power hungry systems that will put unnecessary burden on the grid. That’s precisely what this new draft law concerns itself with, as the use of cryptocurrencies is growing significantly.

As the report states, harnessing the use of cryptocurrencies should be done with care. It’s an exciting technology for sure, but the EU proposes that it is built on the most efficient and modern systems. In translation, mining is old news, proof-of-stake is new.

Too Big of an Impact on the Climate

In addition to the newly drafted law, the EU will also release a report that examines the impact Bitcoin mining will have on the climate by 2025. These concerns are not new. Many experts have been warning about the negative impact crypto mining brings. Even Elon Musk controversially stopped Bitcoin payments in Tesla a few months after adopting them, citing environmental concerns. He has also pledged to look for a solution to the energy problems and alternatives too.

The Bitcoin Mining Council, though, says that the reports have been exaggerated. The council consists of former Twitter CEO Jack Dorsey, Michael Saylor, and Fidelity Investments. They have sent an open letter to US legislators, saying that there’s much misinformation about Bitcoin and energy use. Saylor went so far to call them misconceptions, giving his support to Bitcoin mining.

But, the crypto industry is already shifting to a new system as we’ve seen in Ethereum’s case. We also might have a global energetic crisis on our hands this winter, so the last thing we need are grid complications caused by mining.

October 19, 2022: • No Comments

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