BTC energy use rose 41% last year, raising regulatory concern
Despite the European Union's rejection of a proposal to ban crypto mining earlier this year, more regulations to mitigate the environmental impacts of crypto mining could be implemented soon.
Despite dramatic improvements in energy efficiency and a more diverse and sustainable energy mix, Bitcoin has seen a 41% increase in energy consumption year on year (YoY), raising concerns that regulators will crack down on crypto mining.
The information comes from the Bitcoin Mining Council (BMC), which represents 51 of the world's largest Bitcoin mining companies.
According to the report, Bitcoin mining consumes 0.16% of global energy production, which is slightly less than the energy consumed by computer games — and an amount it considers to be "an insignificant amount of global energy."
Bitcoin mining also contributed 0.10% of global carbon emissions, which the BMC deemed "negligible."
Despite fewer blocks being produced and downward price pressure, Bitcoin energy consumption has increased 8.34% in Q3 2022 and 73% year on year.
According to Glassnode, a blockchain data analytics firm, the "hash rate 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 claims that Bitcoin mining efficiency has increased 23% year on year and 5,814% over the last eight years, further increases in overall energy consumption may aggravate regulators looking into the issue.
Environmentalists are putting pressure on Bitcoin miners, claiming that their power consumption is harmful to the environment. Greenpeace is currently running a campaign called "change the code, not the climate" to encourage the Bitcoin network to switch to proof-of-stake. However, the official account currently has only 1100 followers.
The European Union released documentation on Oct. 18 outlining an action plan to implement the European Green Deal and the REPowerEU Plan, both of which intend to keep a close eye on crypto mining activities and their environmental effects.
The European Blockchain Observatory and Forum (EUBOG) also suggested that the EU implement mitigation measures to mitigate the negative effects of the digital asset sector on the environment.
This suggestion has already been implemented to some extent, with the EU requesting that its member states "implement targeted and proportionate measures to reduce the electricity consumption of crypto-asset miners" in order to combat the severe reduction in energy supplied by Russia.
Despite the EU rejecting a proposal in March that would have imposed a total ban on crypto mining, the push for tighter regulation continues.
In the United States, regulatory developments appear to be lagging behind those in the EU.
The White House Science Office released a 46-page report in September on the climate and energy implications of crypto-assets. However, conflicting conclusions were reached, and no significant plan is currently in the works.
