The cryptocurrency market continues to be evaluated by international communities for final regulation .
The European Community does not take vacations this 2023, and it seems that there is a new prey after forcing Apple to eliminate the lightning port on the iPhone .
Now, and as part of a continental strategy to preserve energy efficiency, Europe is seeking to ban cryptocurrency mining.
According to a statement shared by European representatives, the objective of this approach is the possibility of transforming energy systems to make them efficient and that they are evidence of the move to more “green” policies.
“The goal is to make our energy system more efficient and ready to increase the share of renewable energy sources. For this, we need more innovative digital solutions and a much more intelligent and interactive network than the current one. Today’s Action Plan will help unlock the potential of digitalisation in the energy sector and the significant energy savings it can bring, benefiting all consumers,” said Kadri Simson, EU Energy Commissioner.
The mining of cryptocurrencies, Bitcoin and Ethereum
By its nature, the extraction of bitcoin requires permanently active computational power to generate a profit for whoever is able to solve this process and designate an amount of extracted crypto assets. This has caused thousands of people to build their own “farms” for mining cryptocurrencies and, with it, energy consumption has skyrocketed.
A few weeks ago, Ethereum took a technological leap focused on energy efficiency under the name “The Merge”, a condition that distances it from the computational power that bitcoin requires for mining. This technology has been supported by the EU, instead of collective and indiscriminate mining.
The European study indicates that cryptocurrency mining accounts for 0.4% of global electricity consumption. The information and communication technology segment consumes 7% of global energy in 2022, and an increase of up to 13% is forecast in 2030.
The EU and bitcoin mining
The statement sets out certain commitments that Europe seeks to achieve with this first big look at cryptocurrency mining activity:
Helping consumers increase control over their energy usage and bills through new digital tools and services, with a strong governance framework for a common European energy data space
Control the energy consumption of the ICT sector, inter alia through an environmental labeling system for data centres, an energy label for computers, measures to increase the transparency of the energy consumption of telecommunications services and a label energy efficiency for blockchains;
Strengthening the cybersecurity of energy networks through new legislation including a Network Code for cybersecurity aspects of cross-border electricity flows under the EU Electricity Regulation and the Council Recommendation to enhance resilience of critical infrastructures.
Blockchain label
The project seeks to establish certifications for good energy practices. In the Q&A shared in the statement , the European representation points out that the energy consumption for the extraction of cryptocurrencies has increased by 900% during the last 5 years. This has forced the EU to share extreme measures, while facing an energy crisis aggravated by the Russian invasion of Ukraine and the tense trade relationship between the Putin government and Europe.
“In case a load cut is necessary in the electrical systems, the Member States must also be prepared to stop the mining of crypto assets,” the document mentions. “In addition, the Commission will also cooperate internationally and draw on the expertise of standards bodies to develop an energy efficiency label for the blockchain.”