Regardless of its massive electricity demands, cryptocurrency mining is captured under normal EU regulation, explained European Commissioner Mariya Gabriel on Friday. Gabriel called cryptocurrencies a “new factor driving energy demand,” which will be “kept under review” by the European Commission.
On March 9, 2018, one day after the European Commission released its FinTech action plan[1], Mariya Gabriel[2], a Bulgarian politician who serves as commissioner for digital economy and society, issued a statement[3] in response to growing concerns about electricity consumption related to cryptocurrency mining and blockchain technology.
"Mining activity seems to be currently concentrated in China (two thirds according to certain estimations[4])," wrote Gabriel. "Nevertheless, it cannot be excluded that some part of the mining is done in the EU."
"If this is the case, and if the energy consumed for this activity is produced according to law, there is no legal basis to forbid or even limit it," she explained. The European Commission has not taken any steps to track or curtail cryptocurrency mining in the 28-country association[5] (which includes the United Kingdom[6], for now).
"As an electricity consuming economic activity within the EU, [cryptocurrency mining] is subject to EU rules and policies with respect to energy efficiency, the power sector and greenhouse gases emissions, with the greenhouse gas emission of the power sector as such largely covered by the EU emission trading system," said Gabriel.
She assessed that the "mining business model" appears to be predicated on "expectations of high valuation of the cryptocurrencies," while anticipating that rising electricity consumption and costs could "modify the demand for and value of cryptocurrencies."
Interestingly, Gabriel noted that PoW mining is the particular area of concern, perhaps implicitly acknowledging the cost-saving potential of other consensus algorithms like PoS.
The commissioner's remarks had a positive conclusion. She said, "It is important to note that many promising applications of blockchain technology do not have extensive need for processing power."
Matthew is a writer with a passion for emerging technology. Prior to joining ETHNews, he interned for the U.S. Securities and Exchange Commission as well as the OECD. He graduated cum laude from Georgetown University where he studied international economics. In his spare time, Matthew loves playing basketball and listening to podcasts. He currently lives in Los Angeles. Matthew is a full-time staff writer for ETHNews.
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References
- ^ FinTech action plan (www.ethnews.com)
- ^ Mariya Gabriel (www.ethnews.com)
- ^ statement (www.europarl.europa.eu)
- ^ certain estimations (www.ccn.com)
- ^ 28-country association (europa.eu)
- ^ United Kingdom (www.bbc.com)
- ^ Editorial Policy (www.ethnews.com)
- ^ Twitter @ETHNews_ (twitter.com)
