Tag: Energy

Hut 8 Mining Corporation Ramps Up Fight Against Power Supplier

by Blockchain News

The Bitcoin (BTC) miner Hut 8 Mining Corporation, which is located in Canada, has taken the struggle it has been having with the power supply for one of its mining sites to a higher level by filing a lawsuit in a court in Canada.

Hut 8 said on January 26 that it has submitted a Statement of Claim against Validus Power, an energy provider for a Hut 8 mining plant located in North Bay, Ontario. The lawsuit was brought in the Superior Court of Justice in the province of Ontario.

Since the beginning of November, these companies have been engaged in an ongoing dispute that stems from what Hut 8 claims is a failure by Validus to “meet its contractual responsibilities” under the power purchase agreement.

Hut 8 is seeking “monetary damages suffered as a consequence of the disagreement” and the implementation of certain elements according to the agreement signed by the two firms in its most recent lawsuit against the latter.

Late in 2021, Hut 8 and Validus began collaborating on several projects. Validus was the one that first supplied North Bay with 35 megawatts (MW) of electricity; however, that number climbed to around 100 MW by the end of 2021. Hut 8 was in charge of managing the project.

On November 9, Hut 8 served Validus with a notice of default, asserting that the latter had breached the terms of the power purchase agreement by failing to meet certain milestones by the dates specified in the agreement and by requiring that Hut 8 pay a higher price for the energy it purchased than what was specified in the agreement.

In the latter part of that month, Hut 8 sent an update in which it was disclosed that Validus had stopped delivering electricity to its North Bay location. Validus retaliated by sending Hut 8 its own default notice, in which it said that the latter had failed to pay for the electricity costs incurred by the former. Hut 8 refutes this assertion.

To this day, there has been no restart of business activity at the location. Hut 8 has said that it is investigating other options to lessen the effect of the dispute, including “organic and inorganic development potential.”

According to an investor presentation from December, the North Bay location had 8,800 crypto mining rigs and a hash rate capacity of 0.84 exahashes per second (EH/s) before it was taken down. This accounted for more than one-fourth of the facility’s overall output capacity.

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Ethereum Energy consumption, Carbon Footprint Reduce 99.99% after Merge

by Blockchain News

The Crypto Carbon Ratings Institute (CCRI), a research-driven institution providing carbon estimates for investments in cryptocurrencies and technologies, has issued a report showing that Ethereum Merge, which was successfully completed last night, has drastically reduced the blockchain network’s overall energy consumption.

According to the report issued on Thursday September 15, Ethereum’s energy usage and carbon footprint have both dropped even more than anticipated after the Merger upgrade.

The report said Ethereum now uses approximately 99.99% less energy after the merge was completed. It further mentioned that the blockchain’s carbon footprint has also fallen by over 99.99%.

In the past, the Ethereum Foundation estimated that the merge would cut the network’s energy consumption by approximately 99.95%.

The CCRI report disclosed that Ethereum’s overall electricity consumes just 2,600-megawatt hours per year, compared to 23 million megawatt hours before the merge. As a result, Ethereum’s estimated annual CO2 emissions have fallen from over 11 million tons to just under 870 —less than the combined total of 100 average American homes, per the U.S. Environmental Protection Agency (EPA).

In a statement yesterday, Uli Gallersdörfer, CCRI co-founder and CEO, said that Ethereum’s “green credentials” are now at par with other energy-efficient blockchain networks that started with a proof-of-stake consensus model, rather than transitioning to it as Ethereum just did.

However, Ethereum’s move to proof of stake (PoS) consensus model has not gone well with some industry stakeholders. Ethereum miners, who used to run powerful computers to secure the network and earn ETH rewards through mining, have moved on to mine cryptocurrency on other networks.

Miners have moved their powerful rigs to other blockchain networks like Ethereum Classic (ETC), Ravencoin (RVN), and Ergo (ERG) to do mining.

Why the Merge Is Important

Ethereum’s switch to proof of stake has been planned since 2014, before the official deployment of the blockchain. Due to its technical complexity and the increasingly large amount of money at risk, the upgrade has been delayed several times.

The Merge is part of what in the past was called “Ether 2.0,” a series of upgrades that reshape the blockchain’s foundations.

The move, known as “the Merge,” is of huge consequence. The major network upgrade, which saw Ethereum transition from PoW to PoS, was designed to address concerns about its environmental impact, dramatically improve its transaction speed, and boost the value of Ethereum, among other improvements.

Image source: Shutterstrock

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Bitcoin Mining Transforming Global Energy Crisis, Says Arcane Research

by Blockchain News

Arcane Research, a Norway-based digital asset analysis company providing data-driven analysis and bespoke research within the field of cryptocurrency, has published a report examining the relationship between Bitcoin mining and global energy.

The report states that the crypto mining industry has the capacity to transform worldwide energy production for the better, contrary to what is normally viewed as social and environmental harm associated with the sector.

The paper provides four ways in which mining can improve energy systems in a desirable and economical manner.

First, crypto mining is becoming a catalyst for the development of renewable energy projects. Bitcoin miners have recently started buying the cheapest sources of energy available, renewable (wind and solar) sources of energy.

In this way, cryptocurrency mining provides an economic incentive to build more renewable energy projects and help minimize fossil energy consumption.

On the second note, the constant energy produced by the flexible, reactive power of Bitcoin mining allows the industry to give back energy to the national electricity grid when demand is too high. In July, industrial miners in Texas collectively powered down to assist in protecting the grid during a heatwave as part of a state-wide demand response program.

Such reactivity will be especially important in the coming years as the world increasingly transitions from flexible fossil fuels to non-flexible renewables. Thanks to proof of work consensus powering crypto mining, renewable energy sources are becoming profitable through leveraging the portability, modularity, and agnosticism of Bitcoin miners.

Lastly, besides supporting renewable energy, crypto miners have also begun to help make oil drilling a cleaner and more efficient process.

Oil drilling normally produces natural gas that cannot always be economically harnessed for consumption. Such natural gas is beginning to become useful for crypto mining. This, therefore, helps oil companies such as Exxon, Chevron, Saudi Aramco, and Gazprom, among others, to make profits through Bitcoin mining and also reduce the greenhouse gas emissions associated with the byproduct.

Over recent years, Oil field Bitcoin mining has been growing fast, especially in the United States and Canada.

In March, Exxon, a major US multinational oil and gas corporation, announced plans to use Bitcoin mining for this purpose.

The crypto economy has demonstrated that it is here to stay, as a variety of interesting new areas for investments in the industry remain constantly evolving. Crypto mining is one such avenue for business profitability.

The rapid growth of the crypto economy is not only placing fresh demands on but also offering new hopes for electricity grids. Crypto mining offers energy firms new opportunities to create new revenue streams, improve demand response, and accelerate the expansion of the long-term renewable resource base.

Image source: Shutterstock

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Living on a volcano: The outlook of El Salvador’s crypto mining industry

by Cointelegraph

El Salvador, the first nation to adopt Bitcoin (BTC) as legal tender, has recently announced the relaunch of its wallet app Chivo, which is supposed to patch the previous version’s stability and scalability issues. The update is welcomed news for the Central American country’s crypto experiment, which faced some hurdles and harsh criticism over the last few months. While much of the observers’ attention has been focused on aspects such as retail adoption of crypto and geopolitical implications of Bitcoin’s legal status in El Salvador, the progress of the nation’s mining industry toward achieving President Bukele’s moonshot vision has been less discussed lately. Here’s what the current prospects of El Salvador’s mining industry look like.

“Endless” possibilities

In October 2021, when El Salvador had already become the world’s first country to adopt Bitcoin, one of its main energy sector officials shared his optimistic view on the prospects of crypto mining in the country.

President of the state-run Lempa River Hydroelectric Executive Commission Daniel Alvarez told journalists about the “endless possibilities” to produce energy via hydroelectric, solar, wind and tidal power plants with “willpower” being the only component needed to succeed. “We don’t spend resources that contaminate the environment, we don’t depend on oil, we don’t depend on natural gas, on any resource that isn’t renewable,” he also remarked.

El Salvador’s current energy capacity, however, is rather modest. Reportedly, it has only two geothermal power plants — one at the base of the Tecapa volcano and one in Ahuachapan — that already contribute to Bitcoin mining. Together, they generate slightly under 200 megawatts of electric power and only one of them allocates 1.5 megawatts — the only known figure to date — to Bitcoin mining. Hence, the El Salvador leadership’s ambitions would clearly demand massive developments of new facilities. It looks like they definitely have some ideas in that department.

The Bitcoin city megaproject

In November 2021, El Salvador’s President Nayib Bukele announced his plans to build a new Bitcoin city. The settlement is to be constructed in a ‘“coin shape” at the base of the Conchagua volcano whose geothermal energy would be used to mine Bitcoin. In Bukele’s vision, it should become a perfect combination of glittering neon lights and near absence of taxation:

“Residential areas, commercial areas, services, museums, entertainment, bars, restaurants, airport, port, rail — everything devoted to Bitcoin.”

Keeping up with the regional traditions, this ambitious construction project is to be backed by a bold financial scheme — $1 billion in bonds — half of which would go directly to city construction and the other one would be invested in Bitcoin. The bonds are supposed to last 10 years and pay 6.5% annual interest to their holders. Any investor with a bond share upwards of $100,000 ould qualify for Salvadoran citizenship.

The scheme is backed up by major crypto industry players. Canada-based blockchain technology enterprise Blockstream is responsible for issuing the bonds in the form of tokenized securities on Liquid blockchain while Bitfinex would host them on its platform. According to Samson Mow, chief strategic officer of Blockstram, by the end of the bond’s 10th year, its annual percentage yield will sit at 146% level, as, according to his forecast, BTC price would reach the $1 million mark within five years. That would make El Salvador “the financial center of the world” and “the Singapore of Latin America.”

The many challenges

There is a host of issues accompanying the Salvadoran Bitcoin turn: political backlash against President Bukele and his initiatives, pressure from the IMF and other international actors and the early troubles of the Chivo app. When it comes to plans of massively beefing up the country’s mining infrastructure, there is a number of stumbling blocks as well.

The Bitcoin city announcement saw the existing fiat-denominated El Salvador bonds plummet and raised a number of questions from investment experts, the main one being, “Why buy Bitcoin-backed Salvadoran bonds if you could just buy Bitcoin?” Some pointed out that the country already has a record of failed charter city plans, as well as the fact that the Conchagua volcano, which is supposed to power the city and its BTC mining operations, has recently shown some noticeable seismic activity.

Worse, still, some critics argue that El Salvador’s overall energy profile does not offer great crypto mining potential. One concern is that the country still has to import around 20% of its energy mainly from Honduras and Guatemala. According to some estimates, current industrial energy rates in El Salvador range from $.13 to $.15 per kilowatt-hour while the global average price of Bitcoin mining is around $.05 per kilowatt-hour.

The data from the recent study by DEKIS Research group at the University of Avila ranks El Salvador as number 73 in the global crypto mining potential ranking — while 35% of energy comes from renewable sources. For example, in the United States, this proportion stands at around 7.5%. The levels of national R&D expenditure, human capital index and energy prices put El Salvador closer to the least sustainable countries for mining operations.

Pivoting to renewables

Despite some obvious limitations, the notion of El Salvador’s “endless possibilities” when it comes to mining is not a mere bravado. Like many other Latin American nations, El Salvador possesses a hefty, if yet unrealized, the potential for renewable energy. Talking to Cointelegraph, Philip Ng, vice president of corporate development at green data centers provider Soluna Computing, emphasized the global trend in the direction of making renewable energy more accessible, also noting that it should benefit countries like El Salvador:

Renewable energy is now astonishingly affordable, with the cost to build wind falling 72% since 2009 and solar falling 90% over the same period […] Renewable technologies offer a profound opportunity for South American power markets. Renewable energy assets can be built at a significantly smaller scale when compared with conventional energy. The result is that grids no longer face large transmission and infrastructure buildout costs when trying to add cheap and clean power.

Ng offered the example of Chile, whose recent investments in renewable energy have allowed the country to transition from a net importer of carbon fuels to an exporter of renewable energy. A crucial step in triggering such transition is demand, which is not an easy thing to grow in countries with relatively small populations.

One solution could be to establish a “consumer of last resort,” or a layer of users that would ensure that power producers have a diversified revenue stream and don’t have to rely solely on the utilities. Bitcoin miners could become such a class of consumers. Establishing such an arrangement would also mean that power producers never have to curtail their excess production. A case in point is Kenya, where hydroelectric plants share excess renewable energy with crypto mining facilities.

Responding to Cointelegraph’s request, a Blockstream spokesperson said that an announcement regarding the status of El Salvador’s Bitcoin bonds project will follow at some point in Q1 2022. It is yet to be seen if Nayib Bukele’s exotic aspiration to build a coin-shaped city at the foot of a volcano will materialize in a pragmatic strategy that attracts foreign investments. But, even today it is clear that getting ahead in the renewable energy race will be vital for the success of El Salvador’s massive crypto mining projects.

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How Far Does Your Electron Travel?

by Forbes

Can blockchain solve one of the most problematic issues in renewable energy?

In recent months one of the biggest themes in energy has been the understanding that 100 percent renewable or carbon free energy is a very different proposition to 24/7.

First to cotton on to this were the big data tech giants like Google and Microsoft. They comprehended with total clarity the problems in the US of buying certificates to cover the total volume of energy consumed within a year, without consideration of time and place, and how it could destabilise the grid by sending wrong or even perverse incentives, and market signals.

Data giants arguably were in a better place than most to understand 24/7 and manage their power in a more nuanced way. With plenty of energy intensive operations that could be moved at choice, across the day and night, they could even do some useful load shifting. 

But outside of this elite band with their deep pockets, it has been interesting to watch the less technocratic but similarly determined manufacturing sector change and evolve, starting their own journey to greater sustainability.

One such example is Mercedes, which, for a number of years has been asking how to become more genuinely green. Patrick Koch, Head of Origination in Germany at Statkraft, has developed the Mercedes concept for Germany together with Klaas Bauermann and the two are at the forefront of this transformation. 

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“Like everyone else, Mercedes is on a journey and they are plotting their own way to get to a place that you can really call sustainable quality” Says Bauermann.

Helping the car marque on this journey has involved careful coordination of all of the electrical resources of different shapes and sizes to create solid daily intake, hour by hour, painstakingly ensuring every kilowatt hour is accounted for once and once only.

For German plants, there is the solar park near Ingolstadt and twenty-four wind farms, which according to Elke Pußkeiler, Head of Supply Chain at Mercedes, the company is keen to increase. But when the wind and sun aren’t producing enough energy to meet demand, the company needed to find a solution to the variability of its renewable energy sources. To overcome this they worked with energy supplier, Enovos, and the Norwegian energy producer and retailer, Statkraft. 

Norwegian Hydro kicks in when the load outstrips the local renewable supply and every single hour is produced physically and accounted for by a Guarantee of Origin (GoO), which proves the renewable origin of the electricity. This, as well as the synchronicity of production and consumption, are independently certified by the German TÜV (the Technical Inspection Association).

Says Bauermann, “The complexity surprised us as we started to address the challenges of bringing in high-quality energy. But the mission itself was established with a very clear brief: Firstly, source for Mercedes the cleanest energy, for every hour of operation and secondly maximize, the share of local physical production (PPA) PPA , which are like a physical PPA, while minimizing the share of unbundled GoOs”.

“We start with the requirements from Mercedes and, to an increasing extent, many of their supply chain companies. The tyres, gearboxes and all the component parts that go into the car, and start building out the variable energy contributions. 

“Green baseload and peak load contracts from Germany lay the foundation of supply. We then add as much wind and solar as possible, taking care not to significantly exceed the demand in any few hours. The last part is delivered from flexible hydropower in Norway, and our green battery that we use to make sure we cover Mercedes’s demand for every single hour. So it all adds up exactly.”

Predictably there is no nuclear on the Mercedes energy charts, which places the whole operation on a different footing from say Google who use nuclear, or ‘carbon free energy’ as Clean Energy Buyers Association likes to call it, as a flexible baseload.

Germany is less than a thousand kilometers from the huge hydropower stations of Norway and has barely 11 percent nuclear, so hydropower was never in question for this part of the task.

The Scandinavian hydropower gets sent, in high voltage direct current form (HVDC), by a newly built undersea connection that has only just been finished in March of this year.

NordLink, the new subsea interconnector between Norway and Germany, became operational with its 1,400MW link and there’s no doubt that it plays a crucial role for Mercedes.

It does raise an issue, although the power is delivered to the north of Germany, the passage through to the rest of the country is more theoretical and less physical in nature.

The importance of place

Sure, there is a national grid in Germany, but the level of electrical congestion in the north is one of the reasons for the building of a national interconnector, called Suedlink, between North Germany and South Germany. This part of an electron’s journey is a less happy story and remains far from complete: Suedlink is still under construction, with an uncertain future. The €16.7 billion price tag will push up electricity prices in Germany, despite the country already having the most expensive electricity prices in the world. While laying cable undersea is relatively easy, laying it two metres underground is a more expensive proposition. And none of the residents between Schleswig Holstein and Baden Württemberg want to see more power lines crossing their countryside, so tunnelling it remains the only, if most expensive option.

Clearly bringing the energy from north to south Germany has its issues. And while many energy commentators are unconcerned about this congestion issue, and see the process as electrons coming into and out of a big and somewhat theoretical lake, others are less certain about this view.

One seasoned investor with twenty years experience, and as many successful renewables projects under his belt, disagrees with the ‘lake’ notion, and says that the place of entry of electricity is vital. “From a financial, and market point of view, there is a clear right way to do it and also a very clear wrong way too.”

“The right way is to start with the interconnector and say how can we get our power to this point the cheapest way. The wrong way is to say where the wind is strongest and leave the rest to chance.”

“There is naivete about some developers and even some investors who expect the grid to be constructed to meet their needs, and are sorely disappointed when they find themselves having to curtail the energy coming from their much heralded project.”

It’s also possible that when the interconnectors are all built, there remain monopolistic control issues that prevent interconnectors being used to the full extent.

Certainly solving the congestion problems may turn out in the coming years to be a non-trivial issue.

In that eventuality, the importance of local energy markets, trading with blockchain enabled systems could be a solution. After all, an energy trading platform enabled by blockchain would allow for fast, secure and seamless energy trades to help solve congestion issues. 

It’s too soon to say whether the trade of renewable energy will continue to scale internationally or more locally, but you can see both trends in the market.

Ultimately it will depend on what the companies that are ordering it want to achieve and are willing  to pay for. Today, place appears to be of secondary importance for most companies. Tomorrow it may be a different story.

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Cathie Wood Buys More Robinhood And Tesla, Tells Investors To Take ‘Advantage’ Of Volatility

by Forbes

Topline

Widely-followed stock picker Cathie Wood of Ark Invest, looking to bounce back as her funds continue to underperform, is using recent market volatility to buy the dip on big growth names like Tesla and Robinhood—both of which have seen shares struggle amid the wider sell-off in January.

Key Facts

The founder and CEO of Ark Invest purchased a total of 2.58 million shares of popular stock trading app Robinhood after the stock plunged to a record low of less than $10 per share on Friday following a dismal quarterly earnings report.

Wood purchased more than 2 million shares for her $12 billion flagship ARK Innovation ETF, with a total stake in Robinhood worth nearly $200 million, according to Morningstar data.

Robinhood is down nearly 70% since going public last year but Wood has continued to buy shares of the company since late October—when the stock plunged below its IPO price of $38 per share.

Another of Wood’s big trades in recent days: Adding to her position in Tesla for the first time since June 2021, buying roughly 55,000 shares—worth nearly $50 million—of the electric vehicle maker.

Tesla’s stock has fallen over 20% so far this year amid a wider selloff in growth and tech stocks, but Wood’s latest purchase may be a sign that she thinks shares are down to a more reasonably priced level.

Elon Musk’s electric vehicle outfit is Wood’s biggest holding in her flagship fund, making up about 8% of the ARK Innovation ETF—a position worth over $900 million, according to Morningstar data.

Surprising Fact:

The Ark Invest founder also sold 70,000 shares worth of Spotify on Friday, amid the latest controversy surrounding the company. Several artists have boycotted the music streaming platform in light of false Covid-19 claims spread on Joe Rogan’s podcast. Wood still holds a sizable stake in Spotify—it is one of her flagship fund’s top ten holdings—worth almost $500 million, according to Morningstar. 

Crucial Quote:

Amid the wider sell-off in tech stocks, Wood told investors last week that “innovation is on sale,” though she remained unswayed by the recent market swings. “We use volatility to our advantage,” she said. “We concentrate towards our highest conviction names and that tends to work very well as we go through these corrections.”

Key Background:

After rising to fame in 2020, with her flagship fund surging nearly 150%, Wood’s performance has since gone downhill. The ARK Innovation fund fell 24% in 2021—losing over a fifth of its value–while the S&P 500 was up 27%. So far this year, the fund is down another 20%. With the Federal Reserve tightening its monetary policy and preparing to raise interest rates, investors have largely dumped riskier growth stocks, with shares of tech companies particularly hard-hit. The Nasdaq Composite index subsequently fell into correction territory in January, more than 10% below its record highs last November.

Further Reading:

Robinhood Shares Plunge Amid Gloomy Revenue Outlook Just One Year After Meme Stock Mania (Forbes)

Cathie Wood Doubles Down On Growth Stocks After Fund Loses A Fifth Of Its Value In 2021 (Forbes)

Stocks Just Had Their Worst Month Since March 2020: January’s Wild Ride In 8 Numbers (Forbes)

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Fossils vs. Renewables, PoW vs. PoS: Key policy issues around crypto mining in the U.S.

by Cointelegraph

On Jan. 27, a group of eight U.S. lawmakers, led by Senator Elizabeth Warren, sent letters to the world’s six largest Bitcoin mining companies, demanding to reveal the detailed data on their electricity consumption. This isn’t the first time Senator Warren requested this information from a mining operation — last month a similar letter was sent to Greenidge Generation, which uses a natural gas plant to power its facility.

These moves highlight the increasing regulatory pressure on crypto mining businesses in the United States. But, as last week’s Congress hearing showed, the growing scrutiny might turn out to be an opportunity to align the mining sector’s development with the broader political push for clean energy. Here are some of the key themes around crypto mining that have captured the lawmakers’ attention and that will likely inform the intensifying policy conversation.

Total energy consumption

A cornerstone of any environmental critique of Bitcoin and crypto in general, the question of how much energy cryptocurrency mining consumes was expectedly prominent at the hearing. In a 2018 paper published in the prestigious journal Nature, a group of researchers predicted that Bitcoin’s growth could singlehandedly push global emissions above 2 degrees Celsius within less than three decades — not a good look given the international community’s stated mission to prevent the planet’s temperature rise of the exactly same magnitude.

Cambridge University Bitcoin Electricity Consumption Index set the tone of comparing the yearly Bitcoin-driven consumption to various nation’s levels — and as for now, with its 131.1 TWh per year the most popular cryptocurrency consumes more energy than Ukraine (124.5 TWh) or Norway (124.3), according to this source. The current estimate of Ethereum’s annualized energy footprint by Digiconimist stands at around 73.19 TWh.

None of the most widely cited estimates is beyond dispute, as the recent fact-check report by Bitcoin Policy Institute (BPI) suggests. It cited three separate articles from the peer-reviewed Nature Climate Change journal, one of them debunking the 2 degrees argument as “fundamentally flawed” and criticizing its methodology.

Crypto proponents prefer to compare Bitcoin energy consumption not to nations, but to other industries — in that case, according to the BPI report, BTC’s 0.27% of global energy consumption is less than that of gold mining, although the Cambridge Index sets the two equal.

Fossils vs renewables

In the context of the ever-growing political pressure on energy consumption, the search for a sustainable energy framework becomes crucial for any industry that wants to flourish in the digital age.

The critics of the crypto mining industry have recently highlighted several instances of mining operations relaunching the existing fossil power plants. The authors of the letter that some 70 NGOs sent to Congress ahead of the crypto mining hearing called the legislators’ attention to several such instances, like the relaunch of coal waste plants in Pennsylvania by Stronghold Digital Mining and the partnership between Marathon Digital and coal-fired plants in Montana.

There is also evidence that these are not the only American companies buying up the old ‘“dirty energy” plants to feed their mining operations — the pattern is observed from Texas to Missouri. At the Congress hearing, it was Steve Wright, a former general manager of Chelan County’s in Washington public utility district, who talked at length about the problem. He explained that miners’ interst in dormant fossil facilities is driven by a simple market mechanism: As renewable energy prices (on the West Coast specifically) grow in line with increasing demand, coal prices drop due to investors’ flight ahead of the upcoming 2025 ban on any coal usage in Washington state.

As Represenatives kept returning to this issue over the course of the hearing, it became clear that the tension between the use of fossil fuels for crypto mining and the industry’s potential shift to renewable energy sources is at the center of policymakers’ thinking on the issue. Witness John Belizaire, CEO of green data centers developer Soluna Computing, argued that there exist scenarios under which crypto mining can shift from a being “dirty” energy concern to a vehicle complementing and empowering the renewable energy sector.

Belizaire’s core argument is that computation-intensive tasks like Bitcoin (BTC) mining can be powered by the recaptured excessive (or, in the industry terms, “curtailed”) energy otherwise wasted by clean power plants. According to him, solar and wind farms waste up to 30% of generated energy due to incompatibilities with the old energy grids. Belizaire also addressed the  problem of energy shortages allegedly driven by crypto miners, highlighting the fact that the kind of computations that miners execute can be stopped at any moment on-demand.

For now, the problem of “dirty mining” is here to stay simply due to the U.S. level of electricity production from renewable sources being below 7.5%. A recent study by DEKIS Research group at the University of Avila ranks the United States as the 25th country in the world in terms of its sustainable mining potential, with Denmark (65% of energy generated from renewables) and Germany (26%) leading the chart.

Nevertheless, America remains a safe zone for mining, while many other nations’ electrical grids are less suited to handle additional load. With a reasonable regulatory framework in place, this could be a massive competitive advantage, laying the groundwork for the U.S. to become a global mining haven. Speaking to Cointelegraph, Belizaire explained that there are certain policy steps that can nudge crypto miners to “go green.” He listed a number of specific measures: “Extended tax credits and special investment tax credits for miners that use green energy and serve as flexible load, along with DOE loan guarantee that is extended to encourage the development of green crypto mining.”

PoW vs. PoS

Any discussion of a possible alliance between crypto mining and green energy tends to bump into a Proof of Work (PoW) versus Proof of Stake (PoS) debate, and the recent hearing was not an exception. It was Cornell professor Ari Juels who repeatedly stated that “Bitcoin does not equal blockchain,” in the sense that the energy-intensive PoW consensus mechanism is not the only way to enjoy the decentralization advantages of crypto.

And, of course, the number one alternative on the table is PoS consensus mechanism that will possibly be adopted by the Ethereum ecosystem and is currently used in a large number of new blockchain projects. It is also central to the development of smart contract-based technologies such as decentralized finance (DeFi) and non-fungible tokens (NFTs).

Juels’ statements reflect the general pressure that is building up on PoW. Earlier this month, Erik Thedéen, vice chair of the European Securities and Markets Authority (ESMA), proposed an outright ban on PoW mining in the EU and called for transitioning to PoS due to its lower energy profile.

In the U.S., dominating the global Bitcoin mining market with the 35% share, the issue is way more pressing than in Thedeen’s native Sweden, where only about 1.16% of BTC is mined. However, the real problem lies in the Asia-Pacific region, where, according to the The Global Cryptoasset Benchmarking Study, almost 50% of electricity to Proof-of-Work miners comes from coal.

None of the three experts who spoke with Cointelegraph on the matter see the the juxtaposition of the two consensus protocols as productive. John Warren, CEO of crypto mining firm GEM Mining, noted that there are “slim to none” chances of Bitcoin transitioning to PoS. With that fact in mind, and given Bitcoin’s status as the biggest cryptocurrency, ‘the industry should focus its attention on increased adoption of carbon-neutral energy sources versus trying to alter the Bitcoin verification process.”

John Belizaire rejected the idea that the government should support any of the bulletins over another:

Congress does not have enough knowledge to make a call on the technical architecture of a global platform that powers billions of dollars in assets […] The technology community should be the final arbiter of innovation […] The POW camp will innovate to solve its problems itself.

Mason Jappa, co-founder and CEO of mining company Blockware Solutions, remarked that both Proofs have their comparative advantages, but, in echoing Belzaire’s testimony, underscored the compatibility potential PoW networks possess towards renewable energy. In that sense, Jappa sees PoW mining as a “net positive for society”:

Mining is a perfect complement to the energy grid and is repurposing infrastructure that was otherwise not being utilized, along with providing a use case for building out our energy grid.

What’s next?

As Jappa noted, “It is bullish for the ecosystem that this hearing took place”, as once again the lawmakers expressed their understanding that cryptocurrencies are here to stay.

Warren specifically appreciated the part of the discussion that “underscored the ability for the mining industry to innovate more eco-friendly solutions.” We still witnessed plenty of 101 explanations of blockchain technology that reminded of the long way lawmakers should go in terms of their understanding of crypto economy, but, as Warren poined out:

It’s important to acknowledge that there were a number of positive remarks that stemmed from the discussion, showcasing to the nation that mining has created many new jobs and that Bitcoin introduced valuable blockchain technology to the world. That perspective has been largely missing from some of the recent public discourse around crypto mining.

Besides the obvious need for both the general public and legislators to get better educated on the issue, there are some clear focal points around which the digital mining industry could rally, Belizaire believes.

For example, laws or governmental programs that encourage the use of renewable energy over legacy fossil fuels to power the industry, like “Incentives for job-creating in rural parts of the country where mining operations are set up – at both the state and federal level.”

Thus, it appears that the green mining card is the one that can present a straightforward economic and environmental argument in favor of the crypto industry, while the PoW/PoS debate is something that should be reserved for the crypto community rather than regulators.

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Bitcoin miners believe global hash rate to grow ‘aggressively’

by Cointelegraph

Bitcoin (BTC) seems to be on everyone’s mind lately as the world recently witnessed the price of BTC take a rather unexpected bearish turn this month. On January 21, 2022, Bitcoin reached six-month lows, sinking below $40,000 for the first time in months. 

While some panicked, other industry experts pointed out that the Bitcoin network has become verifiably stronger than ever before. The growth of the Bitcoin network has become apparent, as hash rate figures for BTC continue to set new highs this month. For example, on Jan. 22, the BTC network recorded an all-time high of 26.643 trillion with an average hash rate of 190.71 exahash per second (EH/s).

The hash rate will continue to grow, which is a good thing

Samir Tabar, chief strategy officer at Bit Digital — a publicly listed Bitcoin miner — told Cointelegraph that the BTC hash rate refers to the amount of computing power being contributed to the network at any given time. Tabar explained that when it comes to Bitcoin mining, a higher hash rate equates to a good hash rate. “The more computing power going towards maintaining a network, the more secure it will be and the more transactions it will be able to handle,” said Tabar.

As such, the recent hash rate figures for Bitcoin are extremely notable, even with the price of BTC being down. Peter Wall, CEO of crypto mining firm Argo Blockchain, told Cointelegraph that he wasn’t surprised to see the BTC hash rate hit close to 200 EH/s. Wall further stated that even with events that have recently disrupted BTC mining hash rate like the political upheaval in Kazakhstan, the hash rate will continue to grow higher each month:

“Argo Blockchain’s mining margin last year in 2021, which is our revenue minus our direct costs, was over 80%. It was a very good year for miners. In 2020, where BTC prices were much lower, our margin was 41%. So, this year I think we will still see strong margins in the space despite the recent drop in the price of Bitcoin and the increase in the hash rate.”

Darin Feinstein, co-founder and co-chairman of Core Scientific — a major publicly-traded blockchain infrastructure provider — told Cointelegraph that based on previous Bitcoin mining hash rate data, the BTC network grew by 200% following the mass exodus of miners from China:

“The Bitcoin network one year ago was approximately 143 EH/s. Following the mining ban in China, the network fell to 63 EH/s. Today, the hash rate has grown to approximately 198 EH/s. This recent increase represents three important metrics. One, it represents a 130 EH hash rate increase on the network. Two, it represents 130 EH of new hosting infrastructure and primarily new generation hardware deployment and three, this deployment has taken place in geographic regions that use far cleaner energy than the energy used in China.”

With this in mind, Feinstein noted that even though the BTC network has hit all-time highs in terms of EH/s, due to the massive improvements in miner chip technology and geographic distribution away from China, the network is now the most efficient and sustainable than it has ever been. Feinstein added that this data is important because it shows how much energy every terahash uses, which is generally represented by a metric called jules/terahash. He noted that this ratio has fallen greatly over the last several years, demonstrating a major increase in mining energy efficiency.

Bitcoin mining efficiency chart. Source: Darin Feinstein

Will infrastructure support network growth?

Michael Levitt, co-founder chairman and CEO of Core Scientific, told Cointelegraph that he fully anticipates for the BTC global hash rate to continue growing at an aggressive pace.

However, Levitt mentioned that this growth is dependent on the price of Bitcoin moving forward, along with the success of the infrastructure currently being built. “The amount of infrastructure expected will be challenged by global supply chain issues,” he remarked.

Feinstein added that infrastructure is the biggest challenge when it comes to mining Bitcoin. “The bottlenecks for Bitcoin mining are land, energy, equipment, and lastly, infrastructure. There is plenty of ASIC hardware to be purchased, energy and land are also readily available, but miners need a place to plug in power, and, historically, that is where miners run into issues,” he commented.

North America has become one of the world’s largest Bitcoin mining hubs, as per data from the Cambridge Bitcoin Electricity Consumption Index, which shows that 35% of the average monthly BTC hash rate comes from the United States, while 10% comes from Canada. Wall explained that North America has taken the lead as a global Bitcoin mining hub for a number of reasons. “This is the case due to the region’s crypto-friendly jurisdiction, its stable regulatory environment, pro-innovation nature and, most importantly, access to the most important thing miners need — low-cost power, preferably renewable.”

Wall elaborated that the low costs of power in the U.S. have been significant for miners, especially when organizations tap into the right part of the power grid. “We’ve seen significant growth in Texas over the last 12 months,” he said. 

Cointelegraph previously reported that the Bitcoin mining industry in Texas consumed around 500 to 1,000 megawatts (MW) of power during Nov. 2021. The Electric Reliability Council of Texas reportedly anticipates that demand could increase as much as fivefold by 2023 and has planned an additional 3,000 to 5,000 MW.

Wall elaborated that many miners are moving to Texas due to the fact that the state operates its own power grid that consists of a high degree of power from sustainable generation sources, but needs more flexible demand, or load:

“Miners can provide a consistent load that is flexible. It’s also helpful that Texas has demand response programs in place, where miners will shut down and give power back to the grid when there is high demand. This makes the grid more resilient.”

Benefits such as these have prompted Argo Blockchain to build its next 200 MW facility in Dickens County, west Texas, directly next to a 5.5-gigawatt substation. “There is a lot of congestion at that substation and they need local load to relieve it. The power from west Texas needs to go a long way to reach major urban cities like Dallas and Houston. But, if we can use that energy much closer to where it’s being generated, that relieves the congestion,” remarked Wall.

By drawing power from a nearby substation, Argo Blockchain is demonstrating the use of sustainable energy. According to Wall, the mining company has been carbon negative since 2020. This is important, as Tabar stated that a massive environmental, social and governance movement is currently facing the crypto mining industry:

“Miners must draw from clean sources of power or else they will be regulated out of business. It can’t always be about the cheapest sources of power. Miners will eventually suffer valuation discounts if they use dirty power, even if that source is cheap.”

The perks of going public

A rush of mining firms to go public is another trend the Bitcoin mining industry is likely to witness this year. Most recently, Texas-based Bitcoin mining company Rhodium announced plans to offer 7.69 million shares at $12–$14 each in an initial public offering (IPO).

Core Scientific went public on Jan. 20 after merging with Power & Digital Infrastructure Acquisition in a SPAC transaction. Although shares of Core Scientific have

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Elon Musk And The Other Billionaires Whose Fortunes Fell This Week As Tech Stocks Continue To Struggle

by Forbes

THE CHANGING FORTUNES OF THE WORLD’S RICHEST

The founders of Tesla, Oracle and Airbnb lost billions of dollars this week amid surging market volatility and continued pressure on tech stocks.

D

espite several days of declines, stock indices finished the week slightly higher, offsetting some of this month’s widespread losses. But the market’s troubles look far from over. 

Many tech company CEOs and founders were unsurprisingly among the billionaires whose fortunes fell the most since the market close on Friday, January 21, according to Forbes’ calculations.

Leading the declines for the second week in a row: Tesla chief exec Elon Musk, whose fortune fell $22 billion after shares of his electric vehicle maker had yet another rough week, falling over 10%. Even though Tesla posted record profits after reporting quarterly earnings on Wednesday, investors focused on the company’s warning that supply chain issues may hurt growth in 2022. 

Musk also took to Twitter on Thursday to insult President Joe Biden, apparently in response to being snubbed at a White House forum for electric vehicle makers. Still the world’s richest person, Musk now has a net worth of $222.2 billion, according to Forbes’ estimates.

Oracle cofounder Larry Ellison, meanwhile, fell from fifth to eight richest in the world over the course of the  week as shares of his software giant sank more than 2%. Ellison, who owns about 35% of Oracle (and has pledged millions of his shares as collateral for loans), saw his fortune drop by $3.4 billion, to $109.2 billion, according to Forbes’ calculations. Shares of Oracle have been on a downward trajectory since last month, when the company confirmed it was planning to acquire medical records company Cerner for nearly $30 billion.

Other notable billionaires whose net worths fell this week include Airbnb CEO Brian Chesky and Roblox cofounder David Baszucki. Chesky, who cofounded the home rental company in 2008, dropped $1.1 billion to $11.3 billion, , as shares of Airbnb fell 9% this week. Meanwhile, shares of gaming company Roblox fell nearly 16% since last Friday, shaving roughly $700 million off of Baszucki’s net worth, which now stands at $3.9 billion, Forbes estimates.

Fourth quarter earnings season has so far failed to boost equities as some big name companies posted lackluster results. Combined with investor fears about the Federal Reserve’s tightening monetary policy and upcoming interest rate hikes, the stock market is now on pace for its worst month since March 2020. 

As government bond yields surge, investors have continued to rotate out of riskier growth and tech stocks, many of which have been among the hardest hit in the market’s wider sell-off. The  tech-heavy Nasdaq Composite, which is in correction territory after falling nearly 15% since the start of 2022, is on pace for its worst January ever—and its worst month overall since the financial crisis in October 2008

Other billionaires whose fortunes contracted this week: Coinbase CEO Brian Armstrong’s  net worth dropped around $600 million to $7.3 billion, as shares of his cryptocurrency exchange fell 7.5%. Spotify cofounder Daniel Ek similarly lost around $400 million—putting his net worth at $2.9 billion—as shares of his music streaming platform fell nearly 12% since last Friday.

The fortunes of Snap cofounders Bobby Murphy and Evan Spiegel,  declined by $350 million and $250 million, respectively. They’re now worth $6.4 billion and $6.2 billion, after Snap’s stock fell over 5% this week.

HERE’S HOW SOME OF THE WORLD’S RICHEST PEOPLE FARED THIS WEEK.

The net worth change is from close of markets Friday, January 21 to Friday, January 28.

NET WORTH | $222.2 BILLION, DOWN $22 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | TESLA

NET WORTH | $109.2 BILLION, DOWN $3.4 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | SOFTWARE

NET WORTH | $11.3 BILLION, DOWN $1.1 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | AIRBNB

NET WORTH | $3.9 BILLION, DOWN $700 MILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | ONLINE GAMES

NET WORTH | $7.3 BILLION, DOWN $600 MILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH| CRYPTOCURRENCY

NET WORTH | $107 BILLION, DOWN $500 MILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | FACEBOOK

NET WORTH | $6.6 BILLION, DOWN $400 MILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | TWITTER, SQUARE

NET WORTH | $2.9 BILLION, DOWN $400 MILLION

COUNTRY | SWEDEN

SOURCE OF WEALTH | SPOTIFY

NET WORTH | $6.4 BILLION, DOWN $350 MILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | SNAPCHAT

NET WORTH | $6.2 BILLION, DOWN $250 MILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | SNAPCHAT

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Bitcoin (BTC) $ 26,843.19 1.03%
Ethereum (ETH) $ 1,857.55 0.56%
Litecoin (LTC) $ 91.70 2.71%
Bitcoin Cash (BCH) $ 112.88 0.01%