A Paragraph on Environmental Sustainability Was Added to the MiCA Bill. How Will It Affect Miners?
The legal status of cryptocurrency mining in the European Union depends on the results of a vote in the European Parliament Committee on Markets for Crypto Assets (MiCA), in whose bill the clause on environmental sustainability was returned.
According to the document, blockchain operators will be required to submit an activity rollout plan that will detail compliance with environmental sustainability requirements. Failure to provide such a plan may result in the mining or trading of cryptocurrencies being banned in the European Union.
The bill will directly affect Proof-of-Work (PoW) chains, although this is not clearly spelt out in the document. PoW is used by Bitcoin, Ethereum and some other blockchains. But decentralized networks will not be able to provide the necessary plan due to the nature of their management. And this, in turn, will jeopardize mining in the EU.
And according to a November 2021 report from the Frankfurt School, as of August, the Bitcoin network required 90.86 Terawatt hours (TWh) of energy annually, which corresponds to approximately 0.05% of total global energy consumption. Thus, the grid accounts for only about 0.08% of total global carbon emissions, although these figures are difficult to calculate accurately.
If the bill is passed as it is, many blockchains will experience certain difficulties. For example, by the end of 2022, the Ethereum network should merge with Ethereum 2.0, based on Proof-of-Stake (PoS), and will no longer use mining installations. And for Bitcoin miners, the situation is a little worse.
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