The Bitcoin Mining Council (BMC) released a report based on the 51 most significant Bitcoin mining companies. It showed the enormous impacts of Bitcoin mining on the environment in the present times.
As per the report, an approx 41% increase in energy consumption year-on-year (YoY) despite the proactive measures taken to curb the high energy consumption. About a 23% increase in the efficiency of Bitcoin mining YoY, with the last eight years witnessing a massive increase of 5,814%.
Also, about 0.16% of global energy production is consumed in Bitcoin mining, slightly less than the consumption by computer games. About 0.10% of the global carbon emission comes from Bitcoin mining. The report termed the amount of energy consumption as an “inconsequential amount of global energy,” whereas the share of carbon emission was “negligible.
The energy consumption increase also comes from the network’s hashrate by 8.34% in the third quarter of 2022 and about 73% YoY, irrespective of lowered block production and downward price pressure, as reported by Todayq. Glassnode’s report cited efficient hardware and superior balance sheets possessing a larger share of the hash power network behind the rising hashrate.
The consistent increase in energy consumption has alarmed regulators globally, with Europe and the US announcing steps to combat the issue.
On October 18, The European Union (EU) released a series of documents to implement energy conservation-driven plans – the European Green Deal and REPowerEU Plan. The REPowerEU plan was announced in May amidst the considerable impact on European energy supplies due to the ongoing Russia-Ukraine war. The plan strives for energy sustainability and, as a measure, aims to limit energy consumption in the ICT sector, including blockchain.
Mairead McGuiness, the commissioner for financial stability, financial services, and the Capital Markets Union, said that Europe has long been concerned with the environmental hazards associated with crypto. She also urged US lawmakers to establish regulations to monitor the crypto industry. With reference to the Market in Crypto Assets (MiCa) bill implemented across Europe, she advocated a global and uniform crypto regulation for the larger good.
The European Securities and Markets Authority looks forward to implementing technical standards for the crypto-mining sector. The commission has urged its members to implement proportionate and appropriate caps on energy consumption by the crypto asset miners and eventually to put an end to tax breaks and other monetary perks enjoyed by the crypto miners. However, earlier this year, the EU also rejected a proposal for a ban on crypto mining.
Europe has been more active in the sight of energy regulation and crypto mining, whereas the action from the US hasn’t been that significant. In September, the US announced a 46-page document about the impact on climate and energy from the crypto-assets, but the conclusions were mixed, and no plans in lieu of it have been announced yet.