Ether hit new highs, more people than ever are “Long Bitcoin” and a debate about the energy consumption of Bitcoin is raging.
From the ether?
Ether (ETH), the native cryptocurrency of the Ethereum blockchain network, hit a new high of $ 1,439.33, up $ 19 from an earlier record of $ 1,420 in 2018. The currency has been the ETH increased by well over 1000% in 2015 according to Messari. CoinDesk’s Will Foxley reports that ETH has a different value proposition than Bitcoin, which has served as the foundation of some of the biggest crypto trends including ICOs and DeFi in recent months due to its programmability, developer-friendly community, and heritage, was also brought to his knees.
Bank of America found that “Long Bitcoin” is the busiest trade among fund managers today, and eventually dropped “Long Tech”. Essentially, this means investors are placing bullish bets on Bitcoin – for a variety of reasons, in my opinion, including Bitcoin’s deflationary properties amid record money pressures as well as the herd mentality. The survey found that shorting the dollar is now the third most popular trade. Meanwhile, JPMorgan believes Bitcoin must top $ 40,000 again to keep from bleeding, while South Korean fintech Dunamu has released a digital asset index titled “Fear and Greed”.
Deliver the chain
The UK National Health Service used the distributed ledger Hedera Hashgraph and software company Everyware to track the temperature of COVID-19 vaccines in the cold store. NHS facilities in the UK hospitals of South Warwickshire, Stratford Upon Avon and Warwick will initially use this technology. A broader introduction is planned as the distribution of vaccines progresses.
ANOTHER BTC ETP: Starts on the Swiss SIX exchange, this time developed by CoinShares. (CoinDesk)
WHITELISTED: ENJ is the first gaming token to receive (self) regulatory approval in Japan. (CoinDesk)
UNISWAP UNIVERSITY: The Harvard Law Blockchain & FinTech Initiative, a student organization, is the youngest “university” delegate. ((Twitter)
LAST DAY: OCC’s Brooks resigns. ((Twitter)
FORGOTTEN MILLIONS: Binance has unlocked 16 million BNB to be released to employees in July 2020. (Decrypt)
666,666: A biblical message was encrypted in a current Bitcoin block height, which corresponds to the “mark of the beast”. ((Decrypt)
Consolidation and Rotation
With all eyes on ether, which has broken a new all-time high, market analysts are still confident that traders are assigning altcoins. Bitcoin posted gains for two days in a row but is still trapped in the $ 34,000 to $ 40,000 range, hovering near $ 37,000 at press time. “This phase of consolidation creates a solid base on which those who want to sell Bitcoin have plenty of time,” said the cryptocurrency exchange Diginex.
On the game
With Bitcoin at record levels, a number of critics have come out of the woods to counter-narratives of the recent market rally or reasons for banning the cryptocurrency. Of all the age-old criticisms of cryptocurrency, Bitcoin’s intensive energy consumption is the most harmful and perhaps the most sympathetic to outsiders.
On Sunday the London-based software engineer Stephen Deihl a Tweet thread Discussing the environmental impact of Bitcoin mining. Quote Wolfram Alpha Data, claims Diehl, that the “Bitcoin network wastes 78 TWh (terawatt hours) annually,” which is enough to supply “several million US households” with electricity.
This is a “giant smoldering Chernobyl that sits in the heart of Silicon Valley,” writes Diehl. He is not alone. Apple engineer Fredrick Jacobs joined the revolt Bitcoin’s financial incentives can lead to wasted, “often not green” energy.
It is undeniable that Bitcoin is a consumer good. As well as Mining gold has a number of external effects, as does bitcoin. In 2018, the World Economic Forum (WEF) estimated that the global Bitcoin network uses as much energy as Ireland. I’ve also heard Austria and Venezuela as points of comparison. This is incomprehensible to those who see little value in a distributed, non-censible currency. It is enough to turn any reasonable observer into a crypto Kaczynski.
As always, Bitcoin’s supporters have spoken out against these claims. This time the Schelling Point Bitcoin Champions came up with the idea that “Bitcoin is a battery”. Bitcoin is not only a store of value, but can also be viewed as a useful store of energy.
As Meltem Demirors, Chief Strategy Officer of CoinShares, writes, Bitcoin “makes energy changeable, portable, storable and transferable by converting it into money”. In other words, Bitcoin is a “battery” because it consumes energy and converts it into a currency that can later be used to pay for energy.
There are a lot of ideological and material assumptions in this battery idea. But is it wrong?
At its simplest, this is exactly the Bitcoin miner’s business model. The owners and operators of Bitcoin’s special mining machines deploy their systems wherever cheaper, readily available electricity is available. These machines solve complex math problems that secure the ~ $ 700 billion network and are rewarded with a Bitcoin subsidy.
This payout is then often used to pay the utility bills. Bitcoin advocate and author Knut Svanholm, an early promulgator of the “Bitcoin batteryThe concept said, “It’s important to remember that it doesn’t convert energy into value directly, but electricity into digital scarcity. Digital scarcity that can then be programmed to express value. “
This does not directly address the problem of bitcoin’s energy consumption, but is a defense of bitcoin as a scarce, valuable commodity worth powering up. A similar line of defense is to compare Bitcoin to other energy-intensive goods or services. What about Netflix? What about Twitter? Aren’t most internet-based platforms dependent on the power grid with their limited user friendliness?
Born at the end of the millennial generation, I am painfully aware of the environmental disaster that humanity is staring at. I turn off the light when I leave a room. I buy nuts and grains in bulk. In elementary school, I reported on recycling and kept the habit. I am committed to the idea of using less and preserving more.
For this reason, I want to take Bitcoin’s ecological footprint seriously.
The last line of defense (which I’ll cover) is the idea that Bitcoin is green to some extent. It is often claimed that most of Bitcoin mining comes from renewable sources. CoinShares estimated this in 2019 73% of Bitcoin’s “energy mix” is made from renewable energy. Others say that a fair amount of Bitcoin is mined using energy that would otherwise have been wasted – from natural sources, for example Gas flares.
“Bitcoin thrives on the fringes where energy is lost or restricted,” wrote Nic Carter in a CoinDesk comment entitled “Last Word on Bitcoin’s Energy Consumption.”
With this in mind, the WEF argued in 2018 that renewable energy providers such as wind or solar parks should consider turning on crypto miners when there is excess energy in sunshine and bright skies. “[I]When the grids are overloaded, abundant clean energy is wasted, ”they write. “There are no carbon emissions for every block added to the chain by this method.”
That’s not a bad idea. But I think there is a blind spot that could also explain one of the weakest claims that Bitcoin is green. In short, a block subsidy won by an environmentally friendly miner is not carbon free. There is a whole network of miners competing for the same subsidy that may not be hooked up to a hydropower port.
Bitcoin is inherently wasteful. It doesn’t matter what percentage of the hash power is green. Proof of work is wastefuland there will always be people offended by it. And ideas about coordinating the Bitcoin network to turn it on and off depending on the power generation will never work. Right now coordinating a network of Bitcoin miners is easy as there is no coordination – people hook up their miners and let them rip.
The environmental discussion is based on the presumption of whether Bitcoin has any value and whether that value is worth the cost. Unchained capital framed The energy value of Bitcoin in almost apocalyptic terms:
“Future economic stability is basically why there cannot be a more important source of demand for energy use than the security of the Bitcoin monetary system, especially when the alternatives (fiat and gold) are structurally flawed.”
It doesn’t have to be that black and white. But when it comes to the future of Bitcoin, it is worth asking what forces Bitcoin could disrupt.