In these days, in the past and certainly also in the future, you will hear a lot of talking about Bitcoin mining and its energy hunger.
Europe in particular seems to have taken this issue very seriously, especially in light of the galloping energy crisis and the consequences of the war.
All this scares miners, who may be forced to close their doors, but also Bitcoin in general, which is pushed towards proof of stake.
Ultimately, fear can’t do other than also flow into investors, who wonder what will happen to their beloved digital gold in case it is forced to make substantial changes.
In this article the goal is to take stock of the situation, try to understand how to solve the problem and what consequences each decision will have.
It goes without saying that no one has a crystal ball here, so it’s bar talk and speculation, but it remains highly probable scenarios given the tracks you are marching on.
Is Bitcoin really at risk? Can they really force him to go proof of stake? What would happen to the price in that case? All these questions and many more will be answered here.
Why Europe plans to ban Bitcoin mining
Let’s start by understanding one thing well, the fact that Europe can and wants to ban Bitcoin mining, does not mean that it will ban the coin from circulation.
That said, it is clear that Bitcoin is becoming a major problem in the modern world, especially in light of the latest events.
Its extraction method is based on proof of work, basically very powerful computers that operate in a continuous cycle using big kilowattons.
The proof of stake, on the other hand, means that the network is run by people who block large quantities of Bitcoin on the blockchain, cutting out the work of PCs.
It doesn’t take a great mathematician to figure out that if you take those gnarly computers out of the equation, the world could use this surplus of saved energy.
Yes, because, although there is no uniformity of thought on this, it is estimated that Bitcoin alone absorbs more energy of a small state, a really huge quantity.
Could mining be banned?
This is a question to which it is really difficult to answer, as there are too many factors at play that go beyond the capacity.
The Bitcoin hashrate is that line that always goes up and never seems to go down (except when China has decreed the ban) and indicates the difficulty of the operations performed by the various mining PCs.
The Bitcoin code becomes more and more difficult with the increase of the minant parts, which means an increase practically constant throughout recent history.
So, if any member of the European Commission is bothered to take a peek at the data, then it is very likely that it will be realized that the problem will become always greater.
So, if Bitcoin has more and more hunger and energy is scarce every day, how many probabilities are there that Europe really will ban mining?
Impossible to say, but they easily go hand in hand with that hashrate graph, meaning they go up steadily day after day.
How close we are actually to the ban is not given to know but, unless an epochal turning point in the capacity to produce cheap energy seems an inevitable fate.
How serious would the Bitcoin mining ban be?
Here, too, one can only speculate, but it is very likely that the repercussions of this decision would be much greater than those taken by China.
Europe on the other hand has always been a staple of this business, although it is not as relevant as America or, at the time, China.
The real problem would be related to the fact that a large portion of the free world would suddenly find itself against the largest representative of cryptocurrencies.
This certainly would not please big investors but, probably, would further distance the skeptics and the possible mass adoption.
If something becomes illegal in some form, people tend to consequently increase their distrust of this particular thing, no matter if mining is different from money.
Many people have no idea what Bitcoin is or how it works, so its illegality would probably be seen as a sign of danger.
Bitcoin mining and decentralization
Bitcoin is the cryptocurrency par excellence because is the most decentralized, safe and relevant in the market, in addition to the fact that it was also the first to appear.
The beauty of Bitcoin is the fact that, in addition to being decentralized due to the many nodes that keep it healthy, it is also because it is scattered in the 4 corners of the world.
Mining is in fact an industry that is sent to boast almost everywhere (albeit in different proportions) and this is one of the great strengths that distinguish it.
Putting a noose on Bitcoin’s throat is difficult because it is subject to so many different legislations that even a law in a single country would not be a drama.
This remains true even if Europe votes to ban, Bitcoin would certainly survive, but it would start to centralize itself a little too much.
Where would the mining farms that emigrate from Europe go? Most likely in the United States, where those who fled China have left.
Someone else in Kazakhstan or Iran but, in the end, they would join other important and already extensively tested to avoid problems.
So, the logical consequence of this would be a “centralization of mining“, which would become even more pronounced if someone else followed the European example.
Could this happen? There is no certainty but it is not hard to believe that many countries might want to get rid of this burden.
What would it cause? Nothing in direct terms, but the fairytale of democratic and decentralized money may start to creak heavily.
Read also: What Sets Bitcoin Apart from Other Cryptocurrencies?
How Bitcoin can avoid the ban?
First of all, Bitcoin can really avoid the ban?
On the one hand there are the countries that cannot and do not want to support his hunger, on the other hand the fact that Bitcoin is closely connected with the proof of work.
The security of the network, the trust placed in it, the business behind it and even the very essence of this coin are all contained in this system.
Today miners are faced with possibility of having to pass to the proof of stake, which would solve the energy problem but would create an even greater problem.
Will investors still want to put their money in a cryptocurrency that has lost its essence? Perhaps, but it would still be reasonable to expect a first collapse and, perhaps, a future recovery.
Sure, there is who says that Bitcoin does not bother anyone because it uses renewable sources. True, but the world needs those kilowatts.
However, it remains crucial to understand that, the extraction of this coin, is a form of business that pays taxes just like a steel mill or a shopping center and runs huge capital.
What is sure is that, if the decision will be to cut off Bitcoin’s head, the European Union will gain a few kilowatts but all the parties involved will be left impoverished.
