BTC and ETH will not be banned in the EU
The ban on Bitcoin in the European Union will not be voted on in the EU Parliament for the time being. In a corresponding final draft treaty for the guidelines for the provision of crypto services (MiCA), this passage was finally deleted and removed from the paper without replacement. An earlier version of the report had, at the insistence of MEPs from the Greens, Social Democrats and Left, still anchored a ban on crypto-services based on the reserve currency. According to this, all services based on “ecologically unsustainable consensus mechanisms” were to be banned within the EU. This is now off the table for the time being, which benefits not only Bitcoin but also Ethereum.
Enemy image PoW
The now deleted passage would also have brought the energy-intensive Proof of Work (PoW) of the Ethereum blockchain into the focus of EU politicians. ETH is planning to switch from PoW to PoS anyway, but with the current development, the pressure is not so great to have to push the switch and implement it promptly.
The MiCA draft was handed over by MEP Stefan Berger (CDU) to the responsible Committee on Economic and Monetary Affairs (ECON), which will vote on the draft treaty in about a week. According to Stefan Berger, the “proof-of-work concept” in mining is no longer included in the directive.
This means that an end for bitcoin in Europe has been averted for the time being. Already in the past, the large energy demand had triggered heated debates about the sustainability of cryptocurrencies. The higher the Bitcoin price rises, the more so-called Bitcoin miners compete to mine new coins. This increases the complexity of the computing tasks and thus the energy consumption.
The first countries are already calling for regulations and sanctions. What appears to be unfavourable for the BTC price at first glance turns out to be an opportunity for the crypto industry on closer inspection. With the threat of measures or bans as a “rod in the window”, the pressure on developers to push new concepts, calculation methods and networks increases.
CO2 balance of cryptos
According to calculations by Mike Berners-Lee, professor at the Institute for Social Futures at Lancaster University, all cryptocurrencies emitted around 68 million tonnes of CO2 in 2019 alone. In just ten years, cryptocurrencies would have already left 0.12 per cent of the entire world’s CO2 footprint.
Cryptos based on “ecologically unsustainable consensus mechanisms” will surely evolve into more sustainable and resource-efficient versions of themselves in the near future or disappear from the market sooner or later. This development is not only understandable in the face of cryptocurrencies – every new technology is often subject to radical changes in its early stages, and the pace of these changes varies depending on how widespread they are.
The bottom line is that with the China ban, legal stumbling blocks, rising energy prices and geopolitical changes, miners and developers have no choice but to favour fast, resource-efficient cryptos.