The European Union will pay almost 1 million euros (in fiat or crypto?) to evaluate the environmental impacts of cryptocurrencies and bitcoin mining activities. Does this mean that Brussels prefers strict regulation of these activities instead of banning ? In any case, crypto-enthusiasts will not fail to follow the evolution of this study, especially the publication of the first reports. The fate of bitcoin mining activities and cryptos in Europe will in fact depend on it.
Mining of bitcoin and other cryptos in the sights of the EU
In July 2022, one of our colleagues reported that the Joe Biden administration conducted a study onenvironmental impact of Proof-of-Work (PoW). The goal is to minimize CO2 emissions and ensure that cryptocurrencies become eco-friendly. Or more precisely “ responsibly developed “.
14 months later, Europe follows in the footsteps of the United States, and announces serious investigations on the impacts of cryptos on the climate.
“ Can cryptocurrencies go green? The EU is funding a study on the environmental impact of blockchain. »
According to CNNthis study which will extend over a duration of 13 months will only be limited to the environmental impact of cryptocurrencies.
You are no doubt aware that crypto-skeptics constantly peddle that cryptocurrencies consume too much energy. The Proof-of-Work of bitcoin, above all, only promotes unnecessary emissions. However, the opposing camp thinks that the assessment put forward by bitcoin’s detractors is overestimated.
Troy Cross, a fellow at the Bitcoin Policy Institute, probably gave skeptics a cold shower in his latest report on the energy footprint of bitcoin mining. For this professor at Reed College, PoW mining could reduce the carbon footprint of the Bitcoin networkor even lower energy production costs.
So the European Union must quickly find out which of the two camps is right. Deciding on this delicate subject requires more time and must be left to environmental experts and the best bidders.
If you are one of those affected, know that the Deadline for submission of bids has been set for November 10 next.
Analyze the different crypto validation mechanisms
Here is a description of the study in question taken from the Tenders Electronic Daily page :
“ There is evidence that cryptoassets can cause significant damage to the climate and environment and generate negative economic and social externalities, depending on the consensus mechanism used to validate transactions. Growing demand for crypto-assets and the expansion of cryptocurrency mining, including within the EU, could undermine EU efforts to achieve the climate and sustainability goals, in accordance with theParis agreement. The action aims to strengthen the EU’s capacity to assess and mitigate the impact of crypto mining and develop specific sustainability standards. »
This ” preparatory action » aims to identify a methodology allowing:
- measure climate and environmental impact mechanisms adopted by cryptos;
- assess the adaptability of environmental sustainability standards for crypto-assets.
A prospect of revising the regulations in force concerning cryptos will come after having identified this methodology. Are we heading towards a MiCa bis?
In August, we reported some very enticing data regarding BTC. The Bitcoin Mining Council (BCM) document notably highlighted a 70% increase in Bitcoin mining hash rate, year-on-year in the first quarter of 2023 and an increase of 1% in its sustainable power. At that time, the global BTC mining network used a sustainable energy mix estimated at more than 63%.
In other words, bitcoin, with which energy-intensive Proof-of-Work is often associated, continues to perform. Its impact on the climate and the environment would diminish as a result.
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