EU Concerned on Rising Power Demand for Crypto MiningMar 13, 2018 at 21:41
The European Commission has expressed concerns about rising electricity consumption in the European Union (EU) due to increased cryptocurrency mining activities in the region and its likely effects on climate change mitigation programs.
According to a notice posted on the European Parliament website, European Commissioner Mariya Gabriel, who oversees digital economy and society expressed that they are aware of the concerns on growing electricity consumption for cryptocurrencies and blockchain technology in general.
She stated that there is no legal basis to prevent or limit energy consumed within the EU at present. However, the official expressed that since electrical consumption is an economic activity, it is subject to EU rules that apply to energy efficiency and its effects on greenhouse gas emissions.
At present, greenhouse gas emissions in the power sector are covered by the EU emission trading system.
Gabriel’s statement also mentioned that since the cryptocurrency mining business model is based on delivering high valuation of cryptocurrencies, the increasing electricity consumption and cost is also likely to modify the value and demand of the virtual assets.
However, the commissioner did not invoked the need to track cryptocurrency mining as it is not considered as an illegal activity but noted that a review of the activity will be made regarding its impact on energy demand.
Despite the planned review, she mentioned that there are many promising applications of blockchain technology available today which does not have an extensive need for power.
Last year, the European Commission already announced plans to establish an EU Blockchain Observatory in response to a mandate to strengthen technical expertise and regulatory capacity of the said technology in the region.
The project is expected to include an observatory and a forum to gather input on distributed ledger technology and blockchain technology. It is also being developed with a goal of improving expertise in the technology for future applications as well as to determine what will be the role of the government for policy recommendations.
It can be recalled that last January, International Monetary Fund managing director, Christine Lagarde told the World Economic Forum on bitcoin mining’s large demand for power citing that it will be an issue as nations are dealing with climate change.