Europe advances crypto-coin regulation – without potential ban on Bitcoin
- Reference: 1647415751
- News link: https://www.theregister.co.uk/2022/03/16/eu_parliament_cryptocurrencies/
- Source link:
The European Union is considering ways to regulate digital coins, particularly to stamp out money laundering, and as such in 2020 drew up a draft [1]framework dubbed the Markets in Crypto Assets (MiCA) to achieve this. During the development of this red tape, an amendment was proposed that, depending on its interpretation, could have made it illegal for app and web services to handle transactions involving proof-of-work coins, such as Bitcoin and Ethereum.
Proof-of-work algorithms underpin these cryptocurrencies, how they are mined, and how transactions are confirmed by the network. These algorithms have been criticized for being computationally intensive and consuming large amounts of energy, prompting some lawmakers to propose restrictions. Under the European Green Deal, member states are trying to slash greenhouse gas emissions, and are heavily scrutinizing activities like running proof-of-work algorithms.
[2]
Specifically, the amendment would have outlawed, by 2025, the crafting and trading of cryptocurrencies within the European Union if they used "environmentally unsustainable consensus mechanisms." The coins could be exchanged as normal if they met some "minimum environmental sustainability standards," which crypto-fans took to mean: proof-of-work mining is out.
The consequences would have touched every corner of the crypto ecosystem – from miners to exchanges, and custodians to traders
Restricting use of this code would have been disastrous for the likes of Bitcoin and Ethereum, all but preventing cryptocurrency businesses and netizens from mining and exchanging the digital assets. Newer cryptocurrencies use proof-of-stake algorithms that are less computationally demanding. Bitcoin and Ethereum, however, still run on proof-of-work.
At the start of March, MEP Stefan Berger, a member of the center-right European People's Party Group, [3]confirmed the rule restricting the use of proof-of-work algorithms had been deleted from a revision of the proposed MiCA. Days earlier he [4]said he didn't want people to misinterpret the amendment as a ban on proof-of-work, and a vote on the framework due to be held late February was postponed to straighten out the issue.
[5]
[6]
On Monday this week, the European Parliament's Economic and Monetary Affairs Committee voted 31 to four, with 23 abstentions, to adopt the MiCA text without the controversial amendment as its position, and voted 33 to 25 to move the framework into negotiations with member state governments to form the final version of the law bill.
Ian Taylor, executive director at CryptoUK, an independent cryptocurrency trade association, told The Register the proposed rule "would have meant a de facto EU ban on Bitcoin and Ethereum."
[7]
"If the amendment to MiCA, which proposes an overarching view on crypto regulation across 27 member states, had been voted through, the consequences would have touched every corner of the crypto ecosystem – from miners to exchanges, and custodians to traders," he said. "It is like trying to ban the internet because it takes up 70 percent of phone line bandwidth."
[8]UN mulls Russia's pitch for cybercrime treaty
[9]Intel blasts Bitcoin mining, unveils own mining kit
[10]Carked it, Diem? Zuckerberg's grand cryptocurrency thing may sell off assets for $200m
[11]Mozilla founder blasts browser maker for accepting 'planet incinerating' cryptocurrency donations
Berger, who is championing the MiCA, said the draft framework will pave the way for an "innovation-friendly" set of crypto-coin standards worldwide.
"The regulation being created is pioneering in terms of innovation, consumer protection, legal certainty and the establishment of reliable supervisory structures in the field of crypto-assets. Many countries around the world will now take a close look at MiCA," he [12]said in a statement. ®
Get our [13]Tech Resources
[1] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020PC0593
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YjHDYu1V0zBclh4SLpW9IAAAABM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://twitter.com/DrStefanBerger/status/1498708680417714178
[4] https://twitter.com/DrStefanBerger/status/1497151798355898368
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YjHDYu1V0zBclh4SLpW9IAAAABM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YjHDYu1V0zBclh4SLpW9IAAAABM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YjHDYu1V0zBclh4SLpW9IAAAABM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2022/03/07/russia-un-cybercrime-treaty/
[9] https://www.theregister.com/2022/02/26/intel_bitcoin_chip/
[10] https://www.theregister.com/2022/01/27/diems_day_done/
[11] https://www.theregister.com/2022/01/05/mozilla_accepts_cryptocurrency/
[12] https://www.europarl.europa.eu/news/en/press-room/20220309IPR25162/cryptocurrencies-in-the-eu-new-rules-to-boost-benefits-and-curb-threats
[13] https://whitepapers.theregister.com/
"Ban Cryptp"
You'd have to ban trading cards, investing in wine, or any other area of business which takes fiat currency and turns it into something else.
Re: "Ban Cryptp"
Guidelines for Living #237b: Anyone who uses the term "fiat currency" can be safely ignored.
A missed opportunity
It is like trying to ban the internet because it takes up 70 percent of phone line bandwidth.
The latest in an infinitely long line of analogies crafted to deliberately miss the point. I've come to the conclusion that Cryptocurrency fans are not trying to fool us, they've fooled themselves. Better than acknowledging that a system designed to require ever increasing amounts of energy just to stay afloat is unsustainable and unethical.
Proof Of Work systems do not expect to become more efficient over time. Any gain in efficiency must be countered with an increase in workload, or the whole thing collapses. It's a perversion of market economics.
Re: A missed opportunity
You crypto haters will keep peddling this nonsense, won't you? The reality is that the energy used by bitcoin mining is insignificant in the big picture, compared in an apples-to-apples way, bitcoin is more energy-efficient than equivalents, the majority of bitcoin is already mined using renewable energy, and bitcoin is actually helping to drive renewable energy adoption by monetizing excess green energy in places where it wouldn't otherwise be economically viable.
Re: A missed opportunity
This is complete and utter nonsense, you've turned the truth on its head in your desperate attempt to justify this awful trend.
Re: A missed opportunity
"compared in an apples-to-apples way, bitcoin is more energy-efficient than equivalents"
If you mean compared to other PoW systems, that may well be true: they are all awful, some are more awful than others. Ban them all.
If you mean compared to e.g. a credit card or cash, I cannot fathom what goes on in a mind that could claim something like that. Traditional financial transactions are not only more energetically efficient than PoW systems; they are more efficient by several orders of magnitude . You can literally run a typical shop's yearly transactions with the same energy it takes to make a single bitcoin transaction.
Re: A missed opportunity
My thoughts exactly. I dislike cryptocurrencies because they seem to be largely used for criminal activities, but I wouldn't ban them on that basis. For decades, we've allowed all kinds of technology that had been largely used for copyright infringement, and that was fine. I'd be okay with banning PoW cryptocurrencies specifically, while leaving other systems alone.
However, PoW systems are just fundamentally flawed. Ian Taylor's analogy doesn't make sense, exactly for the reason you describe: PoW systems are specifically designed to consume resources. If the Internet was explicitly designed to consume excessive bandwidth as its primary goal (rather than as a side effect of inefficient encodings and too many cat videos), damn straight we'd ban it.
Ethereum moving away from PoW looking like a good idea.
I am crypto fan and holder but PoW is impossible to defend from an environmental point of view. Once Ethereum moves to PoS this year this will hopefully be a big step forward.
just ban this conmans dream shit
it only enables criminal activity, ban the fucking lot, it's just wasting power and storage
It is absolutely not
" It is like trying to ban the internet because it takes up 70 percent of phone line bandwidth. "
The phone line takes a ridiculously small amount of energy compared to the amount of data being transferred. This is a strawman argument without any basis in reality, but I expect no less from someone purporting to defend the best method criminals have to whitewash their ill-gotten gains.
Banning crypto would put paid to many, many pyramid schemes and other scammer attemps to make an easy buck. I'm not saying crypto is only used by criminals, but when criminals have massively adopted something and use it so successfully, there might be a good reason to put a serious crimp on it.
Re: It is absolutely not
Banning crypto would put paid to many, many pyramid schemes and other scammer attemps to make an easy buck. I'm not saying crypto is only used by criminals, but when criminals have massively adopted something and use it so successfully, there might be a good reason to put a serious crimp on it.
Scams and crime are everywhere, but the there is no evidence that the proportion of crypto activity involving crime is higher than in non-crypto; in fact, it's [1]probably lower .
[1] https://www.forbes.com/sites/haileylennon/2021/01/19/the-false-narrative-of-bitcoins-role-in-illicit-activity/
Re: It is absolutely not
in fact, it's probably lower.
First, it's an estimation and next, remove all transactions who are purely speculative and the percentage will go much higher.
Cryptocurrencies are made to speculate, for criminal activities, are a waste of energy and participate to the threat against the whole humanity. The sooner they will be ban the better.
Bad move. Banning Crypto would have been a bold move, but I'm not surprised politicians didn't do it. Promising them a way to get money with minimum traces is too appealing to them.