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Europe urges member states to be “ready” to stop cryptomining

While pleased with Ethereum’s steps towards a more environmentally friendly operation, the European Commission is very critical of the operation of the Bitcoin blockchain.

The war between the two Bitcoin and Ethereum blockchains has only just begun. On the one hand, the Bitcoin blockchain secures itself through a so-called “proof of work” operation (or PoW for “proof of work”) (also called mining), but this process uses a lot of energy. On the other hand, since September 15, the Ethereum blockchain has switched to a so-called “proof of stake” operation (or PoS for “proof of stake”), which has enabled it to reduce its energy consumption by 99%. Many players have welcomed the takeover of Ethereum as proof of effort, including some who were less expected in this niche. “I look forward to of the passage of Ethereum to the proof that the effort is much less energy-consuming”, declared Economy Minister Bruno Le Maire on Monday in our columns.

An energy efficiency label for blockchains

Europe is also considering the operation of these two blockchains. On Tuesday, the EU Commission presented an action plan that reflects on the energy sector’s digital transition. Among his proposals are controlling energy consumption in certain digital sectors and calling for the creation of an “energy efficiency label for blockchains”.

If the institution does not say more about this famous brand, it has given some details about its vision of the crypto ecosystem. Based on the latest figures from the University of Cambridge, the European Commission specifies that energy consumption linked to cryptocurrencies has “more or less doubled compared to two years ago, to reach approximately 0.4% of world electricity consumption.

The “relatively outdated” proof of work

In this context, care must be taken to use only the most energy efficient versions of the technology. Most of the energy consumption is related to the relatively outdated proof of work consensus mechanism, which is nevertheless used by the most popular cryptocurrency (Bitcoin)),’ the document points out.

The document also reminds that the MiCa regulation will force market players to be more transparent about their environmental footprint.

“Given that Europe currently accounts for only around 10% of the world’s proof of work mining activity, international cooperation is needed to address the high energy consumption of proof of work mining,” the document underlines.

“Ready to stop mining”

Faced with the current energy crisis, the European Commission calls on Member States to “implement targeted and proportionate measures to reduce the electricity consumption of crypto-asset miners”. In addition, it clarifies that “in the event of the need for load reduction of electrical systems, Member States must also be prepared to stop the mining of crypto-assets”.

Before 2025, the European Commission intends to publish a report on the environmental impact of crypto players.

“This report will also include an assessment of policy options to mitigate the negative climate impacts of technologies used in the crypto-asset market, particularly with regard to consensus mechanisms,” the document notes.

While the European Commission has welcomed the transition to “proof of work” of the Ethereum blockchain, the institution states that it intends to promote “environmentally friendly consensus mechanisms through the European infrastructure of services blockchain”.



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