Good day everyone,
I hope you are all well and had an excellent weekend, welcome to CryptoGod-1’s blog on all things crypto. In this post I will be looking at a recent report which has noted that Proof-of-Work (PoW) consensus networks, like Bitcoin, may be banned in the European Union (EU) by the year 2025.
Bitcoin Ban in EU
A recent report has outlined how Proof-of-Work (PoW) consensus networks such as Bitcoin could be banned within the European Union in the near future. The report was done by the European Central bank (ECB) and the European Securities and Markets Authority (ESMA). Daniel Batten, a managing partner at CH4 Capital, shared on his X (formerly Twitter) that the report paints a very dim picture of Bitcoin and other PoW blockchains. The analysis within advocates for an outright ban on Bitcoin and its mining processes in the region. The report emphasised Bitcoin’s environmental impact, addressing global worries over its high energy demands along with its carbon footprint. It also noted how the demands of PoW mining could 'threaten' the EU's energy security, while noting that Bitcoin is nothing more than a 'financial haven' for criminals.
These recent remarks tie into a 2023 ‘eTender’ submission titled ‘Developing a Methodology and Sustainability Standards for Mitigating Environmental Impacts of Crypto Assets.’ That eTender noted that the surge in crypto asset mining generates adverse economic and social consequences. Finally, it claims that the persistent use of PoW mining could lead to the EU being unable to fulfil their sustainability goals in line with the Paris Agreement.
The PoW mechanism underpins Bitcoin’s security and transaction validation process but has long been known to have high energy demands for its use. The report therefore will likely try to influence public opinion and policy-making within the EU. The eTender report has aimed to focus on providing actionable steps to mitigate the impact of cryptocurrency mining and develop specific sustainability standards.
The EU commission has revealed it intends to place a carbon tax on cryptocurrency mining within the EU, and this tax would be based on the network’s consensus mechanisms and possible environmental impacts. The overall idea seems to be one of getting miners to reduce their mining activity or to stop mining altogether.
Other measure the EU will hope to include will be the ability for member states to ‘shut off’ crypto mining for energy security at any time. Bitcoin mining will also be labelled as ‘harmful to the environment,’ and the EU will devise means to disincentivize institutional investment in Bitcoin by claiming that Bitcoin is nothing more than a financial haven for criminals. The pseudonymous nature and the lack of centralised control over Bitcoin have led to these concerns and claims that it is used for illegal activites. However, those who understand Bitcoin will know that those are also the exact reasons why Bitcoin is required - to stop banks and governments having control.
The claims note that Bitcoin is used for things such as money laundering and terrorism, and the European Commission is hoping to shed light on these issues along with the supposed risks they pose to the EU's financial system. Thankfully there was no such thing as money laundering or terrorism financing before Bitcoin was created in 2009 and we can all rest assured that nothing illegal happens in the traditional banking sector - checks notes - while entirely ignoring 2008 of course.
The EU is hoping that a crypto asset mining ban will not be tied to the European region alone. Instead the ESMA and ECB have reportedly revealed that once the ban is legal in the EU bloc they look for it to be accepted in other regions. Of course they have no authority in other regions, and similar to the United States making rash claims about other parts of the world, there would be little the EU could do if other regions did not follow suit. Infact, many would argue that the EU banning crypto mining would open up further avenues for the likes of the United States to benefit from mining in their nation with the additional competition from European miners.
While outrage surrounding Bitcoin and its electricity requirements for mining is nothing new, the latest report and development by the EU should be concerning. It is well known that PoW blockchain network consume a lot of electrical power, and Bitcoin is reported to require more electricity than a small nation. This is far from new news within the crypto space and industry practitioners have already formed the Bitcoin Mining Council (BMC). This focuses on the transition to more environmentally friendly options when it comes to the energy demands of the PoW protocol, and has been quite successful thus far in their approach. K33 research have noted that Bitcoin miners have made use of roughly 58% renewable energy sources in their mining operations, which is three times more than the world's average. This pattern indicates that Bitcoin is getting greener by the day, and with the upcoming Bitcoin halving it is expect miners will invest heavily in more energy efficient equipment to maximise their returns.
Potentially the biggest issue when it comes to this report is getting those in power to actually listen to the rationale that Bitcoin is not harming the environment nearly as much as other industries are. The report will likely lead to significant regulatory actions which could include a de faction ban on Bitcoin and Bitcoin mining by 2025. This would have huge implications on the cryptocurrency industry in Europe and would affect investors, businesses, and the blockchain itself.
So far the EU has taken a cautious and measured approach with cryptocurrencies, and has citied the need to balance innovation while also protecting citizens and the environment. Striking the right balance in Europe between regulation and technological advancement will be key to ensuring this report does not decimate the thriving cryptocurrency industry.
Personally, as a citizen of the EU my opinion on this report is quite clear and frank.
Go Fuck Yourselves ESMA and ECB.
Nobody is interested in the nonsense lies of the report bar the policy makers who are determined to remove any method for the everyday person to accumulate wealth outside of the traditional financial system. Let them try and ban Bitcoin. Let them try. I highly doubt anybody will care if they do, because it will not stop people using Bitcoin and mining Bitcoin. Maybe instead of complaining about Bitcoin and PoW, the EU and governments should focus their attentions on creating substantial green energy for their citizens. Instead they will push 'electric cars' to pretend they are environmentally friendly when the reality is the embedded energy gone into creating these new cars along with the fact the electricity used for them mostly comes from fossil fuel generated power showcases the ignorance and 'smoke and mirrors' style of authoritarian power these governments and the EU is trying to assert.
Have a great day.
Peace. CryptoGod-1.
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