{"id":419594,"date":"2022-03-21T15:43:22","date_gmt":"2022-03-21T12:43:22","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/eu-vote-on-bitcoin-mining-what-does-it-mean-for-the-industry\/"},"modified":"2022-03-21T15:43:22","modified_gmt":"2022-03-21T12:43:22","slug":"eu-vote-on-bitcoin-mining-what-does-it-mean-for-the-industry","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/eu-vote-on-bitcoin-mining-what-does-it-mean-for-the-industry\/","title":{"rendered":"# EU vote on Bitcoin mining: What does it mean for the industry?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2c29ef0e281\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2c29ef0e281\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/eu-vote-on-bitcoin-mining-what-does-it-mean-for-the-industry\/#%E2%80%9D_EU_vote_on_Bitcoin_mining_What_does_it_mean_for_the_industry_%E2%80%9C\" >&#8221; EU vote on Bitcoin mining: What does it mean for the industry? &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/eu-vote-on-bitcoin-mining-what-does-it-mean-for-the-industry\/#A_wake-up_call\" >A wake-up call?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/eu-vote-on-bitcoin-mining-what-does-it-mean-for-the-industry\/#Soon_to_be_part_of_Europes_sustainable_%E2%80%9Ctaxonomy%E2%80%9D\" >Soon to be part of Europe\u2019s sustainable \u201ctaxonomy\u201d<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/eu-vote-on-bitcoin-mining-what-does-it-mean-for-the-industry\/#A_climate_crisis_looms\" >A climate crisis looms<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_EU_vote_on_Bitcoin_mining_What_does_it_mean_for_the_industry_%E2%80%9C\"><\/span>&#8221; EU vote on Bitcoin mining: What does it mean for the industry? &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-2a0745c6>Proof-of-work (PoW) crypto mining won\u2019t be banned in the European Union \u2014 not this year at least. That\u2019s the conclusion from last week\u2019s closely watched committee vote in the European Parliament (EP).\u00a0<\/p>\n<p>A last-minute amendment presented by an ad hoc coalition of <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social<\/a> democrats and Greens would have established a de facto ban on proof-of-work mining \u2014 the type of consensus mechanisms used by native cryptocurrencies like Bitcoin (BTC) and Ether (ETH) \u2014 has been decisively rejected. The crypto community can breathe easily, but some still worry that the industry\u2019s problem with its energy-intensive consensus protocols remains.\u00a0<\/p>\n<p>\u201cMy first reaction to the Economic and Monetary Affairs committee vote outcome was a sigh of relief,\u201d Joshua Ellul, director at the Centre for Distributed Ledger Technologies and senior lecturer at the University of Malta, told Cointelegraph, adding:<\/p>\n<blockquote><p>\u201cIt is definitely a sign that crypto and distributed ledger <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> is no longer a niche bringing together technologists, investors, hobbyists and idealists \u2014 it is a technology that is here to stay.\u201d<\/p><\/blockquote>\n<p>But, Ellul also believes that the community should not rest easy with last week\u2019s win. Miners who support PoW blockchain projects should be \u201cinvestigating renewable energy sources,\u201d not only in anticipation of other possible regulatory actions but also to minimize their carbon footprint.\u00a0<\/p>\n<p>The committee vote was part of the European Union\u2019s ongoing Markets in Cryptocurrency Assets (MiCA) process designed to bring harmonization, clarity and regulation to Europe\u2019s cryptocurrency markets.\u00a0<\/p>\n<p>\u201cIn all likelihood, the de-facto PoW-ban amendment would not have found its way into the final MiCA agreement,\u201d Patrick Hansen, head of strategy at crypto firm Unstoppable Finance, told Cointelegraph. But, that doesn\u2019t mean that energy profligacy and carbon footprint are dead issues. Hansen added:<\/p>\n<blockquote><p>\u201cThe macro-environment \u2014 Ukraine, inflation, etc. \u2014 is changing rapidly, and energy consumption reduction might soon become an absolute policy priority.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"A_wake-up_call\"><\/span>A wake-up call?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>\u201cThis is good <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> for the crypto sector,\u201d Yu Xiong, professor of business analytics and director of the Center for Innovation and Commercialization at the University of Surrey, told Cointelegraph, regarding the EP committee vote. It is another sign that cryptocurrencies and blockchain technology are being widely accepted by the public, but also \u201cdefinitely provided a warning to those mining activities that use PoW. Prepare for transformation because nobody can predict if there will be another such vote in future.\u201d<\/p>\n<p>Ethereum will \u201chopefully\u201d successfully transition to a more eco-friendly proof-of-stake (PoS) consensus mechanism later this year, he added. Otherwise, the vote provides time for other projects that use PoW to undertake their own transformation to reduce energy consumption and their carbon footprint.<\/p>\n<p>Like some others active in the crypto space, Xiong believes that enlightened regulation \u2014 of the sort MiCA presumably offers \u2014 will be an overall plus for the crypto industry. Or, as European People\u2019s Party spokesperson Markus Ferber <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.eppgroup.eu\/newsroom\/news\/crypto-wild-west-needs-a-european-sheriff\">put it<\/a> recently:\u00a0<\/p>\n<blockquote><p>\u201cThe markets for crypto assets have been like the Wild West for too long and need a European sheriff [&#8230;] The new rules for crypto currencies will fill the existing regulatory vacuum by putting in place a clear framework to protect investors and ensure market integrity.\u201d\u00a0<\/p><\/blockquote>\n<p>All said, the 32 to 24 vote to reject the amendment was preceded by a certain amount of trepidation in the crypto community. \u201cThe MiCA situation is worse for crypto than anything in the USA,\u201d <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/jchervinsky\/status\/1503130996203479051\">noted<\/a> Blockchain Association policy chief Jake Chervinsky, who said the amendment looked \u201clike a pretext for a Bitcoin ban.\u201d Meanwhile, Jean-Marie Mognetti, CEO of CoinShares, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/jmmognetti\/status\/1503047004032753669?t=8FXEDsQoVRJVZeAz0ZPCIQ&amp;s=03\">described<\/a> the bid to ban PoW protocols as \u201cmore than just bad news\u201d but rather \u201ca thoughtless, uninspired proposal that does not reflect the realities and the future of the industry.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Soon_to_be_part_of_Europes_sustainable_%E2%80%9Ctaxonomy%E2%80%9D\"><\/span>Soon to be part of Europe\u2019s sustainable \u201ctaxonomy\u201d<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Separate from the amendment tussle, the ECON committee also asked the European Commission to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ec.europa.eu\/info\/business-economy-euro\/banking-and-finance\/sustainable-finance\/eu-taxonomy-sustainable-activities_en\">include<\/a> cryptocurrency mining activities in its EU taxonomy \u2014 a classification system \u2014 for sustainable activities by January 1, 2025. The EU would then determine whether crypto mining could be classified as a \u201csustainable\u201d activity. If deemed non-sustainable, European institutional investors and others might be inclined to give the crypto sector a wider berth.\u00a0<\/p>\n<p>\u201cThe taxonomy has a huge influence over where companies, investors and states [can] invest their money and subsidies,\u201d <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/paddi_hansen\/status\/1500876304937275393\">explained<\/a> Hansen recently. And, as more environmental laws pass, the more that influence will grow. Meanwhile, he added that PoW crypto mining could very likely be listed as \u201cunsustainable\u201d under the taxonomy.\u00a0<\/p>\n<p>But, this is still some time in the future and might be of limited scope. \u201cI don\u2019t think that the addition to the sustainability taxonomy from 2025 onwards will have a big impact on crypto adoption,\u201d Hansen told Cointelegraph. \u201cDepending on how it is defined, it might make investments in mining companies more difficult in the future, but we are still years away from that and mining is not an important economic activity in the EU anyway.\u201d<\/p>\n<p>More importantly, Hansen added, it will affect only the mining companies and \u201cnot the entire crypto industry as for the alternative amendment that was voted against.\u201d<\/p>\n<p>Xiong described crypto mining\u2019s inclusion in the EU taxonomy as \u201creasonable.\u201d It will put more pressure on miners to transition to more eco-friendly alternatives and he anticipates that fewer networks will use PoW consensus mechanisms come 2025. \u201cEventually, only PoS will be adopted by blockchain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lications,\u201d predicted Xiong.<\/p>\n<p>Ellul said that the 2025 deadline offers some breathing room. \u201cI hope that it encourages more renewable energy sources.\u201d One problem with the PoW-energy debate, he added, is that it is highly polarized: \u201cOne extreme is that \u2018no matter what the cost, PoW should remain,\u2019 while the other is that PoW is going to kill us all.\u201d<\/p>\n<p>A less-heated middle position might be useful, he suggested.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"A_climate_crisis_looms\"><\/span>A climate crisis looms<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Were any lessons learned in this latest regulatory skirmish? According to Xiong, one lesson is that crypto and blockchain developers must \u201conly embrace environment-friendly crypto\u201d because any carbon emissions-related activities in this sector \u201cwill be quickly picked up by watchers.\u201d<\/p>\n<p>Indeed, Eero Hein\u00e4luoma, a European Parliament member and a backer of the anti-PoW amendment, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.socialistsanddemocrats.eu\/newsroom\/far-right-support-conservatives-block-progressives-push-cut-colossal-carbon-footprint\">said<\/a> that \u201cThe carbon footprint of a single bitcoin transaction equals a transatlantic return flight from London to New York. This is 1.5 million times the energy used up by a VISA transaction. If we don\u2019t curtail this massive carbon footprint by putting crypto-currencies on a more sustainable path, our efforts to combat the climate crisis and boost our energy independence risk being in vain.\u201d<\/p>\n<p>However, not all in the crypto community are swayed by these sorts of comparisons. Mognetti <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/jmmognetti\/status\/1503047011393839108\">noted<\/a>:\u00a0<\/p>\n<blockquote><p>\u201cAt an annualized emissions rate of 41 million tons CO2, the global Bitcoin mining industry has a small environmental footprint relative to the aviation industry, marine transport sector, air conditioners, electric fans, data centers, and tumble dryers.\u201d<\/p><\/blockquote>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-03\/d9443609-fd39-42a7-a5bf-278e059dbcfa.jpeg\"><figcaption style=\"text-align: center;\"><em>Source: Twitter<\/em><\/figcaption><\/figure>\n<p>Ellul agreed that the energy issue can\u2019t be viewed in isolation. \u201cMost everything of utility in the modern world requires energy and many other activities are power-hungry, too.\u201d One example: Ireland\u2019s power operator <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.reuters.com\/article\/us-data-centre-esg-breakingviews-idUSKBN28Y1H1\" data-amp=\"https:\/\/mobile-reuters-com.cdn.ampproject.org\/c\/s\/mobile.reuters.com\/article\/amp\/idUSKBN28Y1H1\">estimates<\/a> that by 2028, 30% of Ireland\u2019s electricity will be consumed by the country\u2019s data centers.<\/p>\n<p>Overall, the European Parliament committee vote \u201cdid not result in stifling technology this time, but indeed it raises questions about the future,\u201d Ellul told Cointelegraph. Meanwhile, Hansen added that even if the committee vote had been lost, the mining ban would surely have been dropped from the MiCA bill later when the three key EU entities \u2014 Parliament, Council and Commission \u2014 reconcile their legislative texts in the EU\u2019s unique \u201ctrilogue\u201d process. Still, a defeat in the ECON committee would have looked bad, said Hansen:\u00a0<\/p>\n<blockquote><p>\u201cThe mere symbol of the EU Parliament calling for a PoW ban would have had a very detrimental effect on the market.\u201d<\/p><\/blockquote>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/eu-vote-on-bitcoin-mining-what-does-it-mean-for-the-industry\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; EU vote on Bitcoin mining: What does it mean for the industry? &#8220; Proof-of-work (PoW) crypto mining won\u2019t be banned in the European Union \u2014 not this year at least. That\u2019s the conclusion from last week\u2019s closely watched committee vote in the European Parliament (EP).\u00a0 A last-minute amendment presented by an ad hoc coalition&#8230;<\/p>\n","protected":false},"author":1,"featured_media":419595,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDMvNGQyMGNiN2YtMDg0Mi00Yjc1LTkxYjItNThmOWM5Y2NmN2Y4LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74989,75604,75042,74876,75578,74355,117,28340,72705,71511,55229,70934],"class_list":["post-419594","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-mining","tag-euro","tag-mining","tag-proof-of-stake","tag-proof-of-work","tag-adoption","tag-business","tag-europe","tag-european-union","tag-government","tag-law","tag-regulation"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/419594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=419594"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/419594\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/419595"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=419594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=419594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=419594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}