Sweden is leading the push against crypto mining due to concerns that it is sucking up needed renewable energy.
Sweden and Hungary are pushing for a ban on cryptocurrency mining in the European Union.
A main concern: energy-intensive mining consumes renewable energy that could be used by the public, as the EU faces an energy crisis and electricity bills soar in many member countries.
But if the EU decides to ban crypto mining, will it affect the price of your Bitcoin and other cryptocurrencies?
Crypto mining consumes a lot of energy
The process of mining, or creating new coins, typically requires a powerful graphics processing unit (GPU) or dedicated hardware, powerful cooling, and lots of electricity.
Bitcoin mining consumes about 91 terawatt-hours of electricity per year, or about 0.5% of all electricity use worldwide, according to The New York Times.
To put this in perspective, electricity use is enough to power Finland, a European country of 5.5 million people.
Of course, this number includes mining around the world, not just what is done on European soil, but it is a significant number nonetheless.
EU Regulator Calls for Crypto Mining Ban
Several countries, including Sweden and Hungary, are pushing to ban crypto mining in all 27 EU member states. The two countries cite different reasons: Sweden is concerned about energy use, while Hungary says it wants to prevent illegal activities through cryptocurrencies.
Germany, Spain and Norway support the idea of a ban. This follows a proposal from central bank of russia ban cryptocurrencies in that country. The ban did not pass, but Russia increased some regulations in a plan to deal with cryptocurrencies like currency.
We may be seeing a similar development and new regulations in the EU as there is no indication yet that a full ban on crypto mining will be passed.
EU countries are not a big player in the crypto mining space
In theory, at least, less mining could make Bitcoin and other cryptocurrencies scarcer and prices higher. But that’s just one of many factors that affect prices.
The overall mining contribution from EU member states in August 2021 was less than 10%. And that number is likely inflated due to miners’ use of virtual private networks (VPNs) and proxy servers, according to the Cambridge University Mining Map.
Consider what happened after China, which at the time did 34% of the world’s Bitcoin mining, banned crypto mining. Bitcoin price fell for a while after that, but reached all-time highs in November 2021. Miners simply moved to countries with cheaper and more abundant electricity and resumed mining.
If this is any indication of what the future holds, the EU crypto mining ban is unlikely to affect crypto prices significantly in the long run.
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Kliment Dukovski owns Bitcoin as of the date of publication.