EU calls for proof-of-work mining ban
Last month, Erik Thedeen , vice-chairman of European Securities and Markets Authority(ESMA), called to demand a ban on Proof of Work (PoW). Theeden spoke out about the serious environmental risks mining poses. Vice chair of ESMA, Theeden, stated that EU regulators should encourage environmentally friendly Proof-of-Stake mining (PoS), due to its lower energy consumption.
After China banned Bitcoin ( BTC) mining in 2020, governments and government agencies have remained silent about crypto mining. However, the landscape has changed since the beginning of the year. Theeden’s comments were made ahead of the U.S subcommittee hearing about crypto mining and environment. Theeden was also supported by the U.S. lawmakers, who favored PoS due to its favorable energy profile.
Several key statistics that were shared at the hearing have been questioned in recent weeks. CoinShares published a report about crypto mining at the beginning of the month that included a different set of PoW mining statistics. These numbers indicate that independent research is required into PoW mining. Some people are suggesting a campaign against Bitcoin. One could have considered the subcommittee hearing last month on Capitol as an anti Bitcoin hearing.
CoinShares Asks U.S Government Mining Statistics
The CoinShares report contained some key statistics, including:
In 2016, the U.S. and China emitted 5,830 Mt (Metric Tons) and 11,580 Tt (Metric Tons) of CO2 emissions, respectively.
In 2020, the Bitcoin mining network produced 36 Mt CO2 and 39 Mt in 2021. This is less than 0.8% of the global total of 49,360 Mt CO2 emission.
Estimates of annual CO2 emissions from printing and minting fiat currency are approximately 8 Mt.
It is estimated that the gold industry will produce between 100 to 145 Mt CO2 emissions each year.
The global banking system’s power consumption is estimated at 264 TWh (2019). This is equivalent to 130 Mt CO2 emissions per year.
However, the sub-committee briefing memo stated that global 2021 CO2 emission from ETH and BTC mining are equivalent to tailpipe emissions from more then 15.5 million gasoline-powered cars on the roads each year. According to reports, ETH transactions added more than 90 pounds of carbon dioxide and BTC added more than 1,000 pounds.
These figures, combined with those from the United States Environmental Protection Agency ( EPA), show that a passenger car emits approximately 4.6 million tonnes of CO2 annually. This puts the annual U.S government crypto mining CO2 emissions at 71.3 millions metric tons. This is well below the emissions from both gold and banking industries.
According to Cambridge Centre for Alternative Finance the U.S. accounted for 35.4% global hashrate as of August 2021. These numbers would indicate that Bitcoin mining worldwide would produce approximately 185 million tons of CO2. This global figure is well below the CO2 emissions from U.S. oil and gas facilities. Statista shows that CO2 emissions reached 316 Mt in 2020. This is a decrease of 347.4mMT in 2019.
U.S. Agencies Join the U.S Government to Alarm Bitcoin Mining
Even taking into account the U.S. government figures, Bitcoin’s effect on the environment is minimal relative to other industries. However, the Inland Revenue Services of the U.S. sided with PoS miners. Fitch Ratings raised concerns about Bitcoin mining and the environment.
It is not surprising that other countries have joined the anti-PoW mining train.
Hungary’s Central Bank calls for a ban on crypto trading and mining
Friday’s Governor Gyorgy Matolcsy presented an EU-wide ban on crypto trading. The central bank governor referred to China’s crypto ban as well as the Bank of Russia’s proposed ban crypto trading and mining. He stated, ” It is obvious that cryptocurrencies could serve illegal activities and tends to build up financial Pyramids.”
Matolcsy called on the EU to prevent the rise of financial bubbles or pyramids. He suggested that EU citizens and businesses could also own cryptos in foreign countries.
