Crypto Mining’s energy consumption to be slumped by EU’s Action

The need to stop increasing energy consumption in crypto mining.
The regulatory procedures that are undertaken.
The cause of the recent situation

The European Commission has announced an action plan for globally expanding the EU’s energy systems. It has launched the REPowerEU Plan and also European Green Deal. The EU is suggesting halting the process of mining crypto as it is a high energy intensive process.

Its sole aim is to “help improve the efficient use of energy resources, facilitate the integration of renewables into the grid, and save costs for EU consumers and energy companies.”

The REPowerEU Plan got started in May as an answer to Russia’s invasion of Ukraine, which has resulted in deep consequences on European energy supplies. The European Commision said- “Controlling the energy consumption of the ICT sector” is a very important part of the strategy.

It was made to achieve the motive to help- “rapidly reduce [the EU’s] dependence on Russian fossil fuel by fast-forwarding the clean transition and joining forces to achieve a more resilient energy system and a true Energy Union.”

As to fulfill the requirements of electricity in nations, crypto mining processes should be paused as “there is need for load shedding in the electricity systems.”

According to the official website of the EU, REPowerEU is the European commission’s plan to make Europe capable of its dependence on Russia for fossil fuel before 2030, with Russia’s Invasion of Ukraine.As a matter of fact, 85% of Europeans think that if acting a Union, EU can achieve its independence faster from Russia’s oil and gas.

Nearly an investment of ⋲210 billion is needed in period till 2027 to recover the cost of allover imports from Russia’s fossil fuel, which is costing a heavy load of approx ⋲100 per year.

According to the “Commission Staff Working Document” states that Europe comprises 10% of all worldwide crypto mining, in which Ireland and Germany are at the top. The universal activity of crypto mining, the document mentions the upgradation of “technical tools to assess the electricity consumption and carbon footprint of crypto mining at the international level”.

Due to the shortage of energy because of international conflicts, the European Commission has decided “to implement targeted and proportionate measures to lower the electricity consumption of crypto-asset miners and also in a longer term perspective, to put an end to tax breaks and other fiscal measures benefitting crypto-miners”.

The document remarks about the major energy consumed by the Bitcoin (BTC) which is based on proof-of-work protocols and it says that “mining is not a prerequisite for blockchain and that it is possible to base blockchain technologies on consensus mechanisms that consume far less energy than Proof-of-Work because they do not involve a mining process.”