Despite the European Union rejecting a proposal banning crypto mining earlier this year, more regulations could soon be implemented to mitigate the environmental impacts of crypto mining.
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Bitcoin (BTC) has seen a 41% increase in energy consumption Year-on-Year (YoY) despite dramatic improvements in energy efficiency and a more diverse and sustainable energy mix — but there are concerns the rise could see regulators clamp down on mining.
The data comes from a Q3 2022 report by the Bitcoin Mining Council (BMC) which represents 51 of the world’s largest Bitcoin mining companies.
The report found Bitcoin mining to consume 0.16% of global energy production, slightly less than the energy consumed by computer games according to the BMC — and an amount it considered to be “an inconsequential amount of global energy.”
Bitcoin mining also emitted 0.10% of the world’s carbon emissions which the BMC deemed to be “negligible.”
The increase in Bitcoin energy consumption comes as the network’s hashrate increased 8.34% in Q3 2022 and 73% YoY, despite fewer blocks being produced and downward price pressure.
In Q3 2022, #Bitcoin mining efficiency increased 23% YoY, and sustainable power mix was 59.4%, above 50% for the 6th quarter in a row. The network was 73% more secure YoY, only using 41% more energy, and is now 99% of all crypto hashing power.https://t.co/B0jlkWHYgg
— Michael Saylor⚡️ (@saylor) October 18, 2022
Blockchain data analytics firm Glassnode is of the view that the “hashrate rise is due to more efficient mining hardware coming online and/or miners with superior balance sheets having a larger share of the hash power network.”
While the report also claimed Bitcoin mining efficiency to have increased 23% YOY and 5,814% over the last eight years, further increases in overall energy consumption may draw the ire of regulators examining the issue.
Pressure is ramping up on Bitcoin miners from environmentalists who claim its power consumption is harmful to the environment. Greenpeace is currently running the “change the code not the climate’ campaign to encourage the Bitcoin network to move to proof of stake, however the official account has only amassed 1100 followers so far.
FACT: #Bitcoin mining is driving millions of tons of new global warming pollution in the US
MYTH: Burning “waste” methane can green bitcoin
REALITY: Burning waste gas does nothing to reduce fossil fuel consumption and is even keeping old gas wells open https://t.co/o4Er21GVoo
— Greenpeace USA (@greenpeaceusa) October 17, 2022
On Oct. 18, the European Union (EU) released documentation outlining an action plan to implement the European Green Deal and the REPowerEU Plan — with both planning to keep a close eye on crypto mining activities and their environmental effects.
The European Blockchain Observatory and Forum (EUBOG) also suggested the EU adopts mitigation measures to lessen the adverse impacts on the climate caused by the digital asset sector.
This suggestion has already been put into effect to some degree, with the EU asking for its member states “to implement targeted and proportionate measures to lower the electricity consumption of crypto-asset miners” to combat the severe cut in the energy supplied from Russia.
The push for tighter regulation comes despite the EU rejecting a proposal in March that would have enforced a total ban on crypto mining.
As for the United States, regulatory movements appear to be a step behind its EU counterpart.
In September the White House Science Office published a 46-page document that looked into the climate and energy implications of crypto-assets, however, mixed conclusions were reached and no significant plan is in the works yet.