With the growth of the crypto-currency market over the years, some problems have developed for governments. One of the biggest is the apparent lack of security of crypto-currencies, but mining is also one of the most recurring problems. While crypto-currency mining may not seem like a problematic activity, it can be in terms of power supply.
At the time, the European Union began discussions to take action in the future. But the European Union is not alone in its decision to make changes in mining. Many other countries have made this decision because energy consumption is so high that, during the winter, the electrical system can collapse.
Therefore, in order to get ahead of the winter, the European Union decided to start taking some measures to solve this problem. All this information is quite recent, as just a few hours ago, the European Commission stated that EU member countries will have to prepare for crypto-currency mining to be blocked in the not-too-distant future due to security measures.
European Union plans to limit crypto-currency mining
Banning crypto-currency mining is not new, it is something that other countries have already done. In some cases, such as in China, it has been completely banned due to government interests. It is worth noting that before this ban, China was the country with the highest mining output in the world.
After the ban on crypto mining in China, the world’s largest mining center moved to the United States, but even though the United States is the country that generates the largest amount of crypto currency, this does not mean that the impact of energy consumption is negligible in other countries.
In the case of the European Union, it is believed that crypto-currency mining could generate some conflicts, such as increased energy prices. Moreover, in countries like Spain, energy prices have recently become increasingly expensive. Last year, a household’s electricity bill was about 50 euros, and this year it has at best doubled.
And it is not only about the possible increase in energy prices, but also about the possibility of power cuts. If such an event occurs in winter, many people could be exposed to very low temperatures, which could lead to various problems.
The European Union sets priorities and while crypto-currency mining has been allowed without major problems for some time, the priority this winter is to power homes, businesses and shops. Therefore, the needs of citizens must be met first, because if mining is allowed, power shortages and supply interruptions will become more frequent.
Is this the end of crypto-currency mining in the EU?
It may be a little early to say for sure whether or not this is the end of mining in the EU, as it’s not yet clear what approach regulators will take in the next few actions. What we do know is that they will be a bit stricter, especially as winter is fast approaching.
Among the points that are going to be addressed are the tax exemptions and the various measures that, until now, benefit crypto-currency miners. They carry out an economic activity that is not regulated in any of the EU countries, which is why they do not specifically declare taxes.
Therefore, it can be expected that in the medium to long term, regulators will decide to act to implement some restrictive mining measures, so that the state can also enjoy the benefits of mining.
And you might think that mining in the EU is not a problem, but in fact it is. If we look at the above data on energy consumption, we realize that the consumption in crypto mining has increased by 900% only in the last 5 years, when the crypto market has grown too much.
If we compare the amount of energy used in mining, this is only 0.4% of the energy used in the world, but if it is not stopped now, it could become a serious problem in the not too distant future.
Also, overloading of electrical systems is a real problem, not to mention that some miners are illegally connecting to electricity sources, creating many more problems, and this is what the European Union wants to prevent.