An EU official has stated that there is no legal basis to ban or limit Bitcoin mining amid concerns over growing electricity consumption for cryptocurrencies and blockchain technology.
European Commissioner Mariya Gabriel, who oversees digital economy and society, addressed the issue in response to a question posed to the parliament on 9th March 2018.
EU aware of concerns regarding electricity consumption
According to Ms Gabriel’s answer on behalf of the Commission, the EU is fully aware of the electricity requirements that come with cryptocurrencies and blockchain technology, particularly mining for Bitcoin.
However, she also pointed out that the vast majority of mining does not take place in the EU.
“These systems where mining is required to build a consensus and establish trust between the users of the blockchain increasingly require significant electricity-consuming computing power,” said Ms Gabriel. “This issue is particularly acute for Bitcoin.
“Mining activity seems to be currently concentrated in China (two thirds according to certain estimations). Nevertheless, it cannot be excluded that some part of the mining is done in the EU.”
Knowing when to intervene
Even though Gabriel admits that some Bitcoin mining takes place within the EU, she also points out that “if the energy consumed for this activity is produced according to law, there is no legal basis to forbid it or even limit it.”
However, mining is still considered an electricity consuming economy activity and subject to EU rules and policies concerning energy efficiency, the power sector, and greenhouse gas emissions.
The EU Commission has no plans to put in place a means to track the mining of cryptocurrency though. Its potential impact on overall energy demand does mean a close eye will be kept on cryptocurrencies and blockchain technology.
“The mining business model seems to be based on expectations of high valuation of the cryptocurrencies,” added Gabriel. “As long as the price of electricity covers the electricity production costs, the growing electricity consumption, and cost, is likely to modify the demand for and value of cryptocurrencies.”
EU’s increasing involvement in cryptocurrencies and blockchain technology
Over the past year or so, the EU has shown more and more interest in cryptocurrencies and blockchain technology. For example, in April 2017, it was revealed that the European Commission (EC) would tender offers for a service contract to establish a European Union Blockchain Observatory.
The goal of the project is to strengthen technical expertise and regulatory capacity, establish an EU resource for blockchain topics, develop use cases, and determine what role – if any – government authorities can play.
Ms Gabriel also referenced blockchain technology in her parliamentary response to the Bitcoin mining electricity consumption question. She said that many promising applications of blockchain technology do not have extensive need for processing power.
Therefore, it is clear that the EU does not want to stand in the way of blockchain technology. In fact, recent comments and projects seem to encourage its development for the benefit of EU citizens.