Nuked A de facto ban on Bitcoin and ether died in the European Union parliament today. The proposal attempted to clean up pollution from the most energy-inefficient cryptocurrencies. But cryptocurrencies are still likely to face scrutiny from policymakers.
The EU parliament’s committee on economic and monetary affairs voted on Monday to move forward with a legislative framework for regulating digital assets. In the process, it decided to drop a proposed rule that would have prohibited people from using an energy-hungry process to generate cryptocurrencies including Bitcoin.
The EU is already grappling with an energy crisis that sent electricity rates soaring over the past year. The bloc is trying to wean itself off gas supplies from Russia.
The Bitcoin network would rank 27th in the world for its annual electricity use if it was a country itself. Most of that electricity is used in a deliberately energy-inefficient process for verifying transactions called’proof of work’.
Previously versions of the framework included language that would have phased out proof of work in favor of less energy-intensive verification methods. That sparked outrage from the crypto industry, who saw it as a killer blow to Bitcoin.
The Ethereum network has planned a move from proof of work to a different process called proof of stake that nixes puzzle-solving. The move would solve the energy efficiency problem for Bitcoin, too. Without buy-in from miners, any ban on proof-of-work is essentially a ban on Bitcoin.
China used to host the vast majority of cryptocurrency miners, until it kicked them out last year. Since then, Bitcoin’s planet-heating pollution has likely grown, according to research.
Ireland and Germany have the most, with just under five percent each of the world’s share of Bitcoin mining. The numbers are’likely significantly inflated’ because of VPNs.
The EU set a target last year of cutting its greenhouse gas emissions by more than half by the end of the decade. New measures set out by the European Union last week would drastically cut reliance on Russian gas in coming years.
The EU parliament, Commission, and council will have to come to an agreement before the proposal can become law. There’s a chance a de-facto ban on proof of work could be brought up again during those negotiations.
