European Union Commissioner Acknowledges there is No Legal Basis to Ban or Limit Bitcoin Mining
Mar 17, 2018 Posted / 6188 Views
Cryptocurrency mining is an energy intensive process requiring huge amount of electrical energy to realize any significant number of cryptocurrencies. During bitcoin mining a computer tries to solve a mythical equation which puts bitcoin transactions in a permanent ledger as they occur. Bitcoin miners set up computers solely to solve these equations and get paid a reward of about 12.5 bitcoin currently for every block successfully mined plus other fees.
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Bitcoin mining difficulty factor changes every two weeks making mining more and more difficult as the time go by. Bitcoin mining has shifted from small user computers to specialized mining computers. However, these computers have an increased energy demand coupled with the fact that they need to be running at all time to increase the chances of finding a block.
Many companies have ventured into bitcoin mining setting up large mining firms in countries with favorable conditions such as cheaper electrical power cost. It is reported that in some instances these firms use more electricity than the occupants of a city. The high energy demand is raising concern to policy makers who fears soon enough there would not be enough power for its citizens.
At the meantime there is no legal framework governing the operation of bitcoin mining within the EU. This signifies that mining is legal in the European union although some revenue collection regulations can affect bitcoin mining activities too.
The EU parliament is being more concern by the impacts of bitcoin mining on the existing energy supply capacities. The impact of a significant reduction in energy supply can be catastrophic to the economy affecting all its sectors.
Also, the greenhouse gas emissions from power generation facilities due to the increased energy demand from mining farms is also being assessed. The existing EU trading system regulation covers the emission of greenhouse gases into the atmosphere. Cryptocurrency valuation is affected by supply and intersection. These means that increase in the cost of mining which is a bottleneck to supply can modify the price valuation of the cryptocurrency.
Recently the European Commission announced plans to establish an EU blockchain watchdog in response to the demand made by the European Parliament the strengthen the technical expertise and regulation capacity by the EU. This move is expected to streamline activities of the blockchain industry within and outside the EU jurisdiction.
The EU wants to investigate the role the authorities can play to encourage business and security within the blockchain sector. This is an open invitation from start up firms with blockchain solutions from all the world to get a launchpad in a European Country. The EU wants to be a leader in enrolling blockchain to the normal running of the economy.
Better solution of the high energy requirement for cryptocurrency mining may involve finding new energy sources. Since mining bitcoin and a lot of other cryptocurrencies has a time limit. The established new energy sources funded by bitcoin mining companies can later be turned into another use.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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