Japanese Mobile Operator Partners with Accenture to Boost ESG Using Web3

NTT DOCOMO, the leading mobile operator in Japan, has collaborated with Accenture to propel the application and adoption of Web3 when tackling social issues. 

In a statement, the strategic partnership will promote environmental, social, and governance (ESG) issues, develop talent and create a secure Web3 platform. 

Comprising more than 84 million subscribers, NTT DOCOMO will avail its expertise in the telecommunication industry as well as its experience when dealing with society-wide issues.

On the other hand, Accenture, a global digital, cloud, and security services company, will develop an operational foundation for the Web3 initiatives.

Motoyuki Li, NTT DOCOMO’s president and CEO, pointed out:

“Web3 is the most impactful technological development since the Internet. DOCOMO, in collaboration with Accenture, will revolutionize social infrastructure by utilizing blockchain and building a safe and secure Web3 environment.”

Web3 is already being used for societal solutions in Japan. For instance, the government and companies are utilizing Web3 to streamline carbon credit markets meant to fight climate change.

The partnership between NTT DOCOMO and Accenture is meant to propel Japan’s quest to be a leading Web3 market. It also seeks to boost Web3 adoption globally. Li stated:

“We will build an environment where the power of creators and developers can come together. We are glad to be promoting the Japan-developed Web3, and we welcome individuals and companies to join us in the global development of Web3 services.”

Addressing societal issues touching on diversity, sustainability, and inclusion is vital. Atushi Egawa, a senior managing director at Accenture, sees Web3 as a stepping stone toward this objective.

Egawa added:

“Our collaboration with NTT DOCOMO is designed to create an industry platform leveraging blockchain and other digital technologies.”

The World Economic Forum (WEF) recently established a Crypto Sustainability Coalition to investigate the capability of Web3 in tackling climate change, Blockchain.News reported.

The WEF noted that blockchain tools would propel transparency in the worldwide carbon credits market, whereas crypto mining would trigger renewable microgrids through off-peak demand and decentralization.

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Spot Crypto ETF in High Demand by Financial Advisers: Nasdaq Report

A new survey from Nasdaq has shed more light on the growth in an embrace of spot crypto Exchange Traded Fund (ETF) in the United States.

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The survey features 500 financial advisors, including Registered Independent Advisors (RIA) and independent brokers alike.

Per the survey, it was discovered that 86% of advisors who are currently invested in digital currencies plan to increase their holdings in the next year. The survey also revealed that 72% of those surveyed would be more open to investing their client’s funds in crypto if a spot Bitcoin ETF were to be approved by the U.S. Securities and Exchange Commission (SEC).

Of those surveyed, 50% acknowledged that they already use Bitcoin futures ETFs and 28% plan to start using them in the next 12 months. Currently, as many as three Bitcoin futures ETF have started trading in the U.S., the latest being from Teucrium, as reported by Blockchain.News last week.

“Over the last decade, financial advisors have been focused on shifting assets into index funds. As they incorporate digital assets into their investment strategies, they are expressing strong interest in a similar vehicle that can offer broad asset class exposure for their clients,” said Jake Rapaport, Head of Digital Asset Index Research, Nasdaq. “The vast majority of advisors we surveyed either plan to begin allocating to crypto or increase their existing allocation to crypto. As demand continues to surge, advisors will be looking for an institutional solution to the crypto question that now dominates client conversations.”

Other highlights of the survey dwelt on the level of risk adoption by these financial asset managers with most agreeing that just about 6% of the client’s portfolio is enough to invest in any crypto product. With the growing consideration of changing the narrative about crypto’s impact on Climate, the Nasdaq survey shows that 7% of investors agree that “ESG is a very important consideration when determining a client’s strategy toward digital assets.”

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ESG Organizations Send Letter To Congress About PoW Mining, Bitcoin Responds

Will the ESG FUD ever stop? As a Congressional subcommittee prepares to take a good look at Proof-Of-Work mining, “more than 70” national, international, state and local organizations wrote a letter to the “Congressional leadership.” In it, they use old and unreliable data to get their point across. They completely ignore all of 2021’s research and progress on the matter, because it would invalidate their argument.

The question is, will Congress buy their poorly researched, alarmist letter? The ESG FUD hit PoW mining like a ton of bricks in 2021. It might be based on a poor understanding of the subject at hand, but the public in general definitely bought it. And they quote the bogus numbers that their authorities invented left and right on social media. 

Related Reading | Despite Crackdown, Bitcoin Mining Is Still Alive And Well In China

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Also, the whole argument completely ignores the main virtue of Bitcoin. The orange coin provides a framework and tools for the world’s transition to a disinflationary system. Paraphrasing “The Price Of Tomorrow’s” author Jeff Booth, in the inflationary system that we live in, there’s a clear incentive for consumption. If your money’s purchasing power decreases by the minute, everybody will logically buy, spend, and consume everything in sight. That is the real monster that the planet’s facing. And Bitcoin fixes it.  

In any case, Bitcoin’s resident ESG FUD expert, Nic Carter, took it upon himself to reply to the ESG organizations that sent misinformation to Congress. Let’s see how each part did.

The ESG Organizations Make Their Point, Nic Carter Counterpoints

The ESG organizations come out swinging from the introduction on: 

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“We, the more than 70 climate, economic, racial justice, business and local organizations, write to you today to urge Congress to take steps to mitigate the considerable contribution portions of the cryptocurrency markets are making to climate change and the resulting greenhouse gas (GHG) emissions, environmental, and climate justice impacts it will have.”

And their accuracies start from the get-go, also:

“In 2018, scientists writing in Nature warned that Bitcoin’s growth alone could singlehandedly push global emissions above 2 degrees Celsius within less than three decades.”

Those numbers are ridiculous. They “assume” a progression relative to the number of users of the network, and that’s simply not how Bitcoin works. Even if the whole planet adopted the Bitcoin standard, the network would still produce one block every ten minutes. Energy consumption is not directly related to the number of users. 

What did Nic Carter respond? That the claim is “false, based on a debunked paper with a completely erroneous model of bitcoin.”

Right after that, the ESG organizations even throw Ethereum under the bus:

“The Digiconomist’s Ethereum Energy Consumption Index estimates that the Ethereum blockchain will consume 71 terawatt-hours this year, nearly the same as the energy consumption of Colombia.”

Since the letter is about PoW mining, it makes sense. The Ethereum community seems to have completely ignored the letter, at least over at Twitter. 

BTCUSD price chart for 01/07/2021 - TradingView

BTC price chart for 01/07/2021 on Bitstamp | Source: BTC/USD on TradingView.com

Bitcoin Incentivizes Green Energy Infrastructure

The ESG organizations continue their poorly-researched attack with:

“The GHG emissions from this exorbitant and unnecessary energy consumption is staggering.”

It’s not unnecessary at all. In fact, PoW mining is absolutely essential for a decentralized, permissionless system. And the energy consumption is directly proportional to the security of the network. Plus, it anchors it to the real world. Not to mention the fact that Bitcoin actually incentivizes and finances green energy infrastructure.

Then, the ESG crowd accuses Bitcoin of “exacerbating” the global chip shortage:

“Increased demand for these machines are exacerbating a global shortage of semiconductors. A bipartisan bill by Senators Maggie Hassan and Joni Ernst has called for a report on how cryptocurrency mining operations are impacting semiconductor supply chains.“

With ease, Nic Carter counterattacks with: “Bitcoin miners are not tier 1 clients, they don’t compete with Apple/Qualcomm/NVIDIA for space; the shortage is due to money printing and the demand shock. See section on semis here.”

Texas Doesn’t Know What Its Doing, The ESG Crowd Does

Then, the ESG investigators make wild, unbacked assumptions about Texas power:

“Following a crackdown on cryptocurrency miners in China, many miners are moving to Texas, due to its deregulated grid, taking away the power that Texans need.”

This completely ignores the fact that the state of Texas has gone to great lengths to attract those miners. And that, unlike the ESG organizations that signed the infamous letter, power companies in Texas regularly attend Bitcoin meetings. They are making an effort to understand the technology and the opportunities it brings to them. Also, as Carter puts it, “Majority of mining is in west texas where transmission bottlenecks mean prices routinely go negative. Huge overcapacity and limited demand for power outside of mining.”

The state of Texas knows what it’s doing, they see Bitcoin’s future is bright. These ESG organizations think they know better, though:

“Adding more energy-guzzling crypto mining operations to Texas could exacerbate the sorts of blackouts the state already saw during the extreme cold in February — outages that reporting shows hit communities of color the hardest.”

Wow, playing the race card there. So low. And unrelated. Anyway, answering the claim that miners “could exacerbate” the February blackouts, Carter says. “Miners were/ would have been offline during this time, as we demonstrate here. They also help alleviate ‘black start’ issues through primary frequency response.” 

Three Other Prominent Bitcoiners’ Response

Are these direct responses to the ESG organizations’ letter? It’s not clear, but the authors published them in the same timeframe. The first one refers to SHA256, the set of cryptographic hash functions that Bitcoin uses. Nunchuk founder Hugo Nguyen said, “Once you understand that SHA256 is close to being 100% efficient at what it does, you’d stop calling it a “waste”. In fact, 100% efficiency is the exact opposite of “waste”. There’s nothing else like it.”

For his part, Swan Bitcoin’s Brandon Quittem attacks the concept of energy consumption being inherently bad. “Energy consumption is directly correlated with GDP. Want to help developing countries? Help them harness more energy. Interestingly, Bitcoin acts as a free market subsidy for energy investment.”

And Kraken’s Dan Held states that “Bitcoin’s energy consumption is not “wasteful.” Why? Because “It is much more efficient than existing financial systems.” And we’re talking orders of magnitude, here. Not only that, “No one has the moral authority to tell you what is a good or bad use of energy (ex: watching the Kardashians).”

Do you know how much energy American households use for their Christmas lights? As much as the whole Bitcoin network, that’s how much. 

Related Reading | Is This The Reason China Banned Bitcoin Mining? Carvalho’s Mind Blowing Theory

Where is the letter to Congress protesting  Christmas lights, ESG organizations?

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Five Bitcoin Short Films For A Lazy Holiday Evening: Energy, Money, &… Basket?

Happy Holidays from the NewsBTC team. We come bearing gifts. The cure for those suffering from cryptocurrency withdrawal syndrome. Spend the evening learning about Bitcoin in the most relaxed way possible. These five films were released throughout 2021 and contain the alpha everyone needs for the years ahead. At least the first four do, the fifth one has nothing to do with Bitcoin except for one small detail.

Related Reading | The First Interactive NFT in the World – VR Movie on Mars

Our sister site Bitcoinist covered the films and most of the accompanying text comes from those articles. Is there a better time for these films to make an appearance in NewsBTC than this lazy evening? Grab your beverage of choice, heat up those leftovers, and hit play in the one that interests you the most. Chances are you’ll end up watching them all.

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Once again, happy holidays and happy watching!

Bitcoin Short #1- “This Machine Greens” (38 mins)

Is Bitcoin mining’s energy consumption a bug or a feature? This documentary’s “thesis is that the process is “a net positive for the environment.” The aim was to “dispels many of the misconceptions about Bitcoin mining.” Directed by  Jamie King, of “Steal This Film” fame, and produced by Enrique Posner and Swan Bitcoin. 

[embedded content]

From the Bitcoinist’s coverage, in Part 1 they focus on the Petrodollar system:

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“Watch “This Machine Greens” to learn how the US Military literally backs the Petrodollar. And, of course, the US Military uses infinite energy year after year. Learn about the deal that the US made with Saudi Arabia. The US was to protect the Middle East. The Saudis promised that “The global oil market will be denominated in and conducted with dollars. Ensuring a constant global demand for the currency.” Think about the results of this crucial deal.”

From Bitcoinist’s coverage, in Part 2 they explain how Bitcoin mining will fund green energy initiatives:

“According to Alex Gladstein, Bitcoin can fund the “Electrification of new areas and creation of new economic activity.“ This machine greens, if you will. And if we’re talking infrastructure for clean energy, Magdalena Gronowska breaks it down:

 “It’s derisking constructions of renewable energy facilities. It’s derisking it because it’s willing to buy 24/7, 365. And when you have a predictable buyer, a predictable revenue stream, it’s easy to plan out your operations. And that certainty means that that site gets built.”

Bitcoin Short #2- “Human B” (73 mins)

This recent German documentary is one of the best introductions to Bitcoin produced to date. On top of that, directors Aaron Mucke and Eva Mühlenbäumer created a slick audiovisual piece that flows like a river and is an aesthetical pleasure to watch. 

[embedded content]

In Bitcoinist’s coverage of the documentary, they introduce it like this:

“Human B” shows us how people in Germany and Austria view the Bitcoin phenomenon. This is a worldwide movement, and it’s important to listen to all the voices out there. In the documentary, we get to hear from Bitcoin authors like Der Gigi and Anita Posch. From economist and punk rocker Marc Friedrich and journalist Friedemann Brenneis. Plus, from a normal person like Jan, who ends up being the star of the show.

The documentary takes a surprising left turn when it travels to Caracas, Venezuela. There, we hear from Alessandro Cecere AKA El Sultán del Bitcoin, and from Juan José Pinto from Doctorminer.”

#3- “Hard Money” (34 mins)

This one is not about Bitcoin per se. This Bitcoin short is about money. To understand why Bitcoin is so important for the planet, people might need a refresher course on what money actually is.  This documentary is analogous to the first few chapters of Saifedean Ammous’ “The Bitcoin Standard,” and features sound bites from some of the most important Bitcoin philosophers out there. Directed by Richard James.

[embedded content]

In Bitcoinist’s coverage of the film, they convince you to watch it with this:

“Watch the “Hard Money documentary and you’ll be able to answer these questions: Why was gold chosen as the premier form of hard currency? What were gold’s “severe flaws”? What is inflation and how does the government hide it? How breaking the relationship between the Dollar and gold broke the relationship between the market and reality. What is low and high time preference?  What does fractional reserve banking create? Why are the institutions that issue debt effectively printing new money?”

BTCUSD price chart for 12/25/2021 - TradingView

BTC price chart on Bitbay | Source: BTC/USD on TradingView.com

Bitcoin Short #4- “Bitcoin Is Generational Wealth” (15 mins)

This one is not a documentary, even though it uses some of the genre’s techniques. Also, this is the only specimen on this list that didn’t get a positive review from Bitcoinist. Why is that? We won’t spoil it for you. Watch the film first and then read the linked text. Directed by Matt Hornick. Written and narrated by Tomer Strolight.

[embedded content]

In Bitcoinist’s bad review of the film, we find this quote:

“Half speculative fiction, half predictive programming, “Bitcoin is Generational Wealth” is in a genre of its own. Using high-quality stock footage to produce a professional montage, the film should work. But it doesn’t. Is the script to blame? Probably. The film shows an idyllic future that every Bitcoiner has dreamt about, but it doesn’t explain how we get there. It takes the “Bitcoin fixes this” meme to its ridiculous extreme.”

#5- “Lynchpin” (21 mins)

This one is about amateur basketball. Its only link to Bitcoin is that Swan and the Bitcoin Movie Club financed and produced it. Is this the first of many or a one-time thing? Word on the street is that the companies will finance several chapters of this story, but don’t quote us on that. “Lynchpin” was supposed to be a TV show, so it sounds possible on that end. We’ll keep you all posted. Directed by Mike Nicoll.

[embedded content]

In Bitcoinist’s presentation of the short film, they introduced it as follows:

“Compton Magic’s Etop Udo-Ema, “America’s most recognized basketball powerbroker,” is “Lynchpin’s” star. Before Covid hit, this charismatic man receives an offer that he can’t refuse. The whole short film follows him trying to change sponsors and create a league. That carries Etop to Roc Nation and its boss Jay Z, who happens to be Puma’s creative director. The whole enterprise seems to be on its right track. No one could predict the monkey wrench that hit the world’s engines.”

Related Reading | Miramax Sues Quentin Tarantino Over “Pulp Fiction” NFTs. Tarantino Moves Forward

And that’s enough Bitcoin for tonight. Happy holidays!

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Don’t Fall For The Social Credit Scoring System Trojan Horse

Mastercard is part of a larger effort to introduce social credit scoring under the guise of ESG concerns. Bitcoin fixes this.

The below is a direct excerpt of Marty’s Bent Issue #1081: “Dystopia watch.” Sign up for the newsletter here.


Here is something to keep an eye on as calls for “climate action” and pressure to meet arbitrary “ESG standards” heat up; credit cards with a carbon limit. In 2019 Mastercard rolled out the “Doconomy card” in an effort to provide carbon impact conscious individuals with a credit card that would prevent them from spending money if they went over a predetermined “carbon limit” calculated by adding up the “carbon impact” of the goods purchased using the credit card over a specific period of time.

Well, it looks like Mastercard is beginning to position Doconomy as a proof of concept that could set a “global standard for carbon calculations” to be adopted by others. Here’s a brief video of someone highlighting how this is a clear cut way to usher in a social credit system under the guise of environmentalism.

This is how the social credit scoring system will be Trojan Horse’d into society. At first it starts off as a way for individuals to signal their virtue. Then it turns into a standard that others can leverage to offer their customers. And eventually it ends up as a mandatory prerequisite for issuing credit cards or using a Central Bank Digital Cuck Buck wallet. Obviously, we are not at the full on implementation of this type of potential standard via a central bank digital cuck buck and it may never get there, but it is always important to recognize how these dystopian systems can arise from a social and technical standpoint.

The normalization of “carbon impact” is being rolled out slowly but surely at this current juncture. Here’s a screenshot from a freak that was sent to me last week highlighting how Google Flights is beginning their normalization efforts.

via Bbask24

via Bbask24

This attack vector on civil liberties is only going to increase. I urge you freaks to resist the social pressure to give in to the pandering to individuals’ respect for the environment by recognizing that this type of carbon shaming won’t do anything to actually affect positive change for the environment and certainly not for humanity. Those who will control this social credit scoring system will in no way be subjected to the same standards it thrusts on the Common Man. And the forced transition to unreliable energy sources will make humans worse off. Particularly the poor.

Luckily we have Bitcoin which provides individuals with a monetary and payments network that – if its users work to make it sufficiently distributed and robust – cannot implement the type of dystopian standards that the Cantillionaires are currently attempting to force on the Common Man.


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Is ESG, Bitcoin Energy Criticism, Fascist?

Are overreaching ESG standards, which often target Bitcoin’s energy consumption, politically dangerous?

The below is a direct excerpt of Marty’s Bent Issue #1077: “More Unsolicited Thoughts On ESG.” Sign up for the newsletter here.

via Aswath Damodaran's Musings on Markets

via Aswath Damodaran’s Musings on Markets

I know, I know, I know. Some of you may think Crazy Uncle Marty’s anti-ESG schtick is getting a bit nauseating. However, as you should have realized by now, I cannot control myself. When I think there is a good point to be made about the subject, I will make it. And that is what I am here to do today.

The above snippet comes from a blog posted yesterday by Aswath Damodaran, a professor of finance at the NYU Stern School of Business, which builds on a post he published last September that began to dissect the ESG movement in the capital allocation space and beyond to determine whether or not it is a productive framing to conduct business and life. I highly recommend you take the time to read both pieces because Aswath does an incredible job of breaking down the thesis behind the investment strategy, how it gets implemented in the real world, its failure to accomplish its stated goals, why it can never accomplish its stated goals, and a better framework from which to approach “doing good”.

To summarize the core argument that Aswath makes; ESG does not work because it ignores the existence of free will and reduces individuals and individual processes into uniform inputs in a rigid mathematical function that spits out an ESG rating. At its core, this type of grading/rating system cannot work because, again, it ignores the existence of free will and the subjectivity of “goodness” in the eyes of two different individuals. It is literally impossible to settle on a ratings system that people are able to agree on. And since that is the case, any ratings system that is brought to market will inherently carry the biases of those who construct it; governments looking to acquire more power over their subjects and corporations looking to leverage advantages provided by regulatory moats.

Not only that, when these investment strategies are applied, they do not produce a return profile that is desirable. So this movement is crowding smaller players out by increasing the cost to comply and producing bad returns for investors. A lose-lose for most economic actors.

Now, if this is the case why are so many people pushing for it? Well, as Professor Damodaran so eloquently describes in his latest post on the subject; because most individuals don’t want to take personal responsibility and extreme ownership over their impact on the world. Many are so lazy that they would rather have the government, capital allocators, and corporations make these decisions on their behalf and provide them with an “ESG-certified” label they can point at and say, “See, I’m doing my part!” Completely glossing over the fact that when these personal responsibilities are handed over to bureaucrats, bureaucrats are going to do what bureaucrats do – whether they’re political or corporate bureaucrats – manipulate the system in their favor while making everyone else worse off.

Politicians will attempt to gain more control and some corporations will attempt to leverage it to create an artificial moat around their businesses to artificially reduce competition. Which leads to another interesting line of discussion under the overarching ESG topic; is it a form of Fascism? I think you could make a very good case that yes, yes it is. And nothing made this clearer to me than a clip that was floating around Twitter earlier this week of Dave Smith educating a fellow panelist about how Mussolini defined Fascism.

“He defined it as a merger between Corporation and state.”

While Dave may have been articulating this to make a point about how vaccine mandates can be considered Fascist, I think we can also apply this to what is happening throughout the ESG movement. Via the direction of the UN (a group of coordinated countries – the state) and the “climate change goals” they have arbitrarily set for the global population, corporations and capital allocators are beginning to direct the means of production and pick winners and losers via an ESG ratings system built around those arbitrary and subjective world views. Favoring some forms of energy and boardroom structures over others while failing to be open about the tradeoffs that are being disregarded. A good example of this is wind and solar being favored as energy sources for being “green” when they leverage an immense amount of hydrocarbons and slave labor on the front and back end of their lifecycles.

By creating arbitrary and rigid guidelines which entrepreneurs must operate within, the state and the corporations who are best positioned to benefit from these arbitrary guidelines dictate the means of production in a subversive fashion. There is no overt physical seizing of the means of production. Instead, the means of production is slowly but surely nudged in a certain direction until the desired amount of control is in the hands of the state and its corporate cronies.

As a bitcoin miner, this issue has become very clear to me. In a sane world bitcoin mining would be viewed as a massive boon for conservationism. For the first time in human history we have a mechanism by which we can profitably monetize previously wasted and stranded energy assets. The natural incentives of the network force miners to drive their electricity costs down as low as possible and the best way to do that is to seek out wasted and stranded energy sources that no one else is willing to utilize. Bitcoin miners will show up in the middle of nowhere to utilize energy that was LITERALLY BEING SET ON FIRE without producing any positive economic value. Definitionally making the world more energy efficient.

Not only this, but the miners utilizing that previously wasted energy are doing so to profitably facilitate and secure the best monetary system humanity has ever come into contact with. A monetary system which will end the mis-pricing of opportunity costs that is induced by the ability to print money out of thin air. As Steve Barbour said during a conversation on the topic we were a part of earlier this afternoon, it punishes the misallocation of capital, which leads to less unnecessary consumption. When governments and central banks print money out of thin air to save companies that have misallocated capital and resources to an extent that they are in danger of going out of business, they perpetuate that misallocation of capital and resources, which one can argue is a net negative on the environment and society overall.

I’m sorry for rambling, freaks. I just had to get these thoughts off of my chest after reading Aswath’s blog last night and partaking in a conversation on the subject this afternoon. I will leave you with the actionable advice from Aswath’s blog post, which I think is a much better framework for individuals, business, and investment professionals to approach the concept of “doing good in the world”. It should be based on your personal values and not a top-down diktat defined by a very narrow set of values.

via Aswath Damodaran's Musings on Markets

via Aswath Damodaran’s Musings on Markets


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Since China’s Mining Ban, Bitcoin Hashrate Has Recovered by 68% And Counting

Bitcoin is a perpetual motion machine. The Bitcoin hashrate is slowly climbing to pre-China-ban levels, and the service continued uninterrupted without a hiccup. Such is the power of well-placed incentives. Pantera Capital’s CEO Dan Morehead adds one more factor to the equation. “The bitcoin network has recovered 68% of the drop in hashrate that our difficulty model attributed to China’s ban—likely in places with cleaner energy.”

In the company’s newsletter, Pantera fleshes out the argument:

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“Although difficult to know with certainty, it seems very likely that much of the reboot in mining power is occurring in places with cleaner energy than those utilized by Chinese miners. 

The transition to renewables is well underway.”

Regarding The Bitcoin Hashrate, Are ESG Concerns Even Important?

Here at NewsBTC we’ve determined that China’s Bitcoin mining tended to go to provinces with abundant green energy. Bitcoin incentivizes that. The Bitcoin hashrate tends to go where the energy is cheap. We’ve also determined that the environment doesn’t seem to be the reason for China’s Bitcoin mining ban.

The fact that the electricity for crypto mining in Sichuan came from clean hydropower meant that many thought the province would be a safe haven for Bitcoin miners. As pressure on local governments to cut carbon emissions mounts, projects were successfully shuttered in some other provincial-level regions — such as Xinjiang and Inner Mongolia — where the mining was chiefly fueled by coal.” 

The only thing we can know for sure about the Chinese government’s plan is this: the environment is not on their radar. They’re closing these mining operations for other reasons altogether. 

It’s also important to remember that China’s Bitcoin hashrate dominance was already on decline before the mining ban. 

“According to Arcane Research, CBECI numbers say that:

China’s share of total Bitcoin mining power has declined from 75.5% in September 2019 to 46% in April 2021 — before the restrictions on Chinese miners were even imposed. That figure is much lower than the older estimate of 65%.

That’s a sharp decline. Why did China’s miners lose so much ground before the ban?”

None of this invalidates Pantera Capital’s original thesis, though. “The transition to renewables is well underway,” that certainly seems to be the case. And the Bitcoin hashrate keeps climbing. 

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BTCUSD price chart for 09/09/2021 - TradingView

BTCUSD price chart for 09/09/2021 - TradingView

BTC price chart for 09/09/2021 on Timex | Source: BTC/USD on TradingView.com

Do Bitcoin Halvins Imply Cuts In Energy Consumption?

Another interesting idea present in the mentioned newsletter is this one:

“Bitcoin has a built-in mechanism to reduce energy consumption over time.  The number of bitcoin issued in the every-ten-minutes block reward is cut in half every four years.  Ceteris paribus, the amount of electricity Bitcoin consumes will be cut by 50% every four years.  For comparison, the Paris Accord only requires 7% cuts every four years.”

Of course, when related to fiat currencies, Bitcoin’s price fluctuates. So, the value of every Bitcoin stays the same, but the price might – and usually does – increase more than twofold. Even though the miner’s rewards are cut in half, their earnings might increase. That extra money could bring even more competition and a Bitcoin hashrate increase with it. 

Taking that into account, Pantera poses:

“Perhaps a more realistic scenario is if the price of bitcoin were to double every four years in parallel with the halvings – putting bitcoin at $320,000 /BTC in 2032 – electricity consumption would be no greater than it is today.”

Bitcoin Electricity Consumption, Bitcoin Hashrate

Enough About The Bitcoin Hashrate, What About The Price?

Another point that the newsletter makes is this one.“This is China’s third ban of Bitcoin.  The reverse hex is still working – the price is up 57%.”

China Bans record.

China Bans record.

Related Reading | New To Bitcoin? Learn To Trade Crypto With The NewsBTC Trading Course

Is this a bullish signal? Bitcoin’s price has “only” increased by 57% since the Chinese mining ban sent the Bitcoin hashrate in death spiral for a few seconds. Bitcoin paid the price and resisted sabotage like a hero. We’re not sure if a “reverse hex” could be considered reliable information, but… maybe this IS a bullish signal?

Featured Image by Diana Polekhina on Unsplash - Charts by TradingView and Pantera Capital


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The Bitcoin Energy Debate Is A Modern Reprise Of The Gold Resource Cost Debate

And the answers remain the same…

Long before we had the Bitcoin energy debate, we had the gold resource cost debate. The contours were similar: the costs associated with gold refining and extraction were a waste; they were too great relative to a mere fiat standard in which notes could be printed for virtually nothing. Why bother with gold, impassive and unwavering in its supply dynamics, when you could have the cheap and highly configurable paper standard instead? The critique hinges on figures computed by economists finding extremely high resource costs associated with the gold standard. Infamously, in his 1951 essay “Commodity-Reserve Currency,” Milton Friedman criticizes the gold standard on these grounds, calculating that 1.5% of GDP would have to be devoted to the production of gold under a full reserve standard, an estimate he revises up to 2.5% in 1960.

Writing in Cato Journal in 1999, Allan Meltzer replicates Friedman’s analysis and, while conceding that Friedman’s estimates are a shade aggressive, nevertheless concludes that “the resource cost of a full commodity standard remains high.”

As George Selgin notes, contemporary economists continue to maintain that a gold standard is “expensive” relative to fiat. Selgin provides the example of Starr claiming in 2013 that “the use of paper or fiduciary money instead of commodity money is resource saving.” The lineup of critics is completed, if somewhat diminished, by the addition of Matt Yglesias reminding us that the gold standard would “impose a cost on the real economy” as the “gold held in bank vaults is gold that is not available for industrial or decorative uses.”

According to mainstream economists, given the relative cheapness of printing paper notes (or digitally printing federal reserve liabilities) a gold-based system is not only unviable from an economic perspective but also a weirdly costly anachronism. Why bother with physical goods when you can print up a synthetic, largely free alternative?

Quite similarly, today the most strident anti-Bitcoin voices fixate on its resource costs — and specifically its energy consumption. As with gold, the critics allege that Bitcoin’s resource burden is not just too high but entirely a waste, because to them Bitcoin offers no perceptible utility relative to other monetary and payment systems. As with gold, the constraints imposed by Bitcoin make no sense to westerners raised on a diet of monetary tinkering and steady debasement. As with gold, hyperbolic projections about future resource costs have come to dominate the debate around Bitcoin (Mora et al., anyone?). As with gold, apparently “cheap” alternative systems — like proof of stake, effectively “fiat” by another name — are held up as costless alternatives. And just like gold, the opportunity costs of the untethered fiat system are not considered in the “resource costs” debate. The costs of the fiat standard go unchallenged while the more explicit costs of gold, and now Bitcoin, are subjected to extreme scrutiny.

The debate over the resource cost of gold is critical in understanding the present-day fixation with Bitcoin’s energy costs. The rhetoric is the same; only the names and the jargon are substituted. Today’s critics talk in calm, worried tones about Bitcoin’s concerning ESG characteristics. This sterile corporate speak is of course a euphemism for the following: “I see no value in Bitcoin and hence consider all costs associated with its production and maintenance wasteful.”

In light of these similarities, let us wind back the clock and consider the gold resource cost debate. It’s a rather delightful contradiction that Bitcoin reaches into the past to propose a monetary order that theorists have long coveted, while relying on new technology: at once a techno-utopian project yet also a reactionary, almost revanchist movement. So, let us consider the history of the Bitcoin energy debate, or its deeper abstraction, the hard money resources debate.

A remarkable paper that makes these similarities evident is Roger Garrison’s 1985 treatise, “The Costs Of A Gold Standard.” Virtually the entire tract could be rewritten with “Bitcoin” substituted for gold and its conclusions would hold. In the paper, Garrison argues that considering resource costs in isolation is irrelevant without a discussion of opportunity costs — that is, the costs imposed by a world without gold. The efficiency of the system is a necessary function of the benefits of the price stability and monetary independence of gold, and its costs cannot be considered without reference to these qualities. As Garrison notes:

“The effectiveness of the resource-cost argument against the gold standard rests on the popular perception that the activities of mining gold, refining it, casting it into bars or minting it into coins, storing it, and guarding it are collectively wasteful activities and the implicit assumption that if the gold standard were supplanted by a paper standard, these activities would cease. But making the implicit assumption explicit is enough to demonstrate its falsity. The imposition of a paper standard does not cause gold to lose its monetary value.

“To believe otherwise is to hold the naive view that the State can repeal the laws of economics. Gold continues to be mined, refined, cast or minted, stored, and guarded; the resource costs continue to be incurred. In fact, a paper standard administered by an irresponsible monetary authority may drive the monetary value of gold so high that more resource costs are incurred under the paper standard than would have been incurred under a gold standard.”

This perspective is elucidating. Whether gold or Bitcoin, in non-totalitarian states, there is no way to reliably inhibit the spontaneous desire of savers to store their wealth outside of sovereign currencies. In 1986, perhaps as a response to Garrison, Friedman hedged his prior position, noting the paradoxical rise in the demand for gold under a purely fiat standard.

“Since the end of Bretton Woods,” he mused, “even the direct resource cost of the gold and silver accumulated in private hoards may have been as great as or greater than it would have been under an effective gold standard.”

You can think of this transition — from the state linking its currency to the commodity, to individuals choosing to hold the commodity directly — as a desocialization of the stability afforded by a gold-backed currency. This analogizes to a town removing its exterior walls and gates, forcing the citizens to erect their own makeshift palisades around their compounds. As sovereign currencies have become more unstable since the dissolution of Bretton Woods — almost precisely 50 years ago today — individual savers have increasingly sought out safety in gold and other hard monies.

In 1999, the monetary economist Larry White applied a critical eye to Friedman’s challenge from the ’50s, questioning Friedman’s assumption of a full-reserve gold world. In a more likely fractional reserve system (such as the ones we have seen in various free banking episodes for instance), gold reserves would account for a single-digit percentage of the money supply, driving down the necessary resource costs of the commodity. This pragmatic assumption reduces Friedman’s resource cost estimates by a factor of 50.

Additionally, White supports the idea that gold still imposes resource costs even if you desert the gold standard. He calculated that the acquisition of gold bars and coins by private individuals has indeed been structurally elevated since we entered a fully fiat standard in 1971. In a counterfactual gold standard world, White argues, we would actually require less gold, less extraction, and hence lower resource costs than we do today.

In our current world of monetary instability, amid a fraying dollar system, both individual savers and central banks have been buying gold at an increasing rate. Russia now holds more gold than dollar-denominated assets in its reserves. According to data from the World Gold Council, the central banks of China, Turkey, India, Saudi Arabia and Mexico have all showed noted enthusiasm for the metal in the last decade. And as interest rates stay low and inflation ratchets up, U.S. debt — now mathematically guaranteed to lose the holder money if held to maturity — has become less attractive as a savings device. Led by China and Japan, foreign governments have been net sellers of U.S. treasuries since 2014. Today, the Federal Reserve holds more treasuries than all other foreign governments combined.

All of this is to say that, despite the assurances of the soundness of the dollar emanating from Washington, individuals and states are taking a new look at non-state monetary commodities. For gold, this additional demand (prompted by an unstable fiat system) imposes a very real resource cost and inescapable environmental externalities. Approximately 131 terawatt hours (TWh) of energy is used every year in gold extraction and mining (Bitcoin clocks in at around 76 TWh). As inflation picks up, and it becomes increasingly clear that the U.S. government must debauch the dollar in order to finance its growing largesse, the appeal of gold, Keynes’ “barbarous relic,” grows in importance.

Yet despite the environmental footprint of gold, few today seriously advocate the banning of gold production. Gold mining is widely distributed worldwide, with the largest single producer nation, China, accounting for only 11% of the new supply. Entrepreneurial gold miners emerge to extract the metal anywhere it is sufficiently dense in the earth’s crust, making global regulation virtually impossible. And gold offers a valid insurance policy against currency debasement — one that billions of individuals worldwide, and an increasing number of central banks, are taking advantage of.

The analogies to Bitcoin should be clear. Much like gold, bitcoin is an asset with non-discretionary monetary supply dynamics; no one entity can control the supply. In Bitcoin’s case, it’s not physical properties that define the rate of production, but a credibly-committed-to supply schedule expressed in code. Like gold, bitcoin is attractive because it is scarce and cannot be debased. Bitcoin also improves on gold in some critical respects — it’s more portable, concealable and transportable. Strong auditability and cheap verification of inbound transactions mean that Bitcoin is less prone to getting captured by large custodians, which helped doom the gold standard; clients can always withdraw and self-custody their coins with little difficulty.

As with gold, Bitcoin users are happy to pay for the “costs” of the monetary system they opt into. The resource costs are not socialized — they are borne solely by holders and transactors. Some externalities exist, but they must be considered relative to the externalities of fiat, which has a disastrous track record. All 56 hyperinflations on record have occurred under conditions of fiat currency; none has taken place on a commodity standard.

Gold mining occurs worldwide, as gold is relatively well distributed in the earth’s crust. Bitcoin mining is as of yet more concentrated, but its prospects for continued dispersion look bright. Mining is highly modularizable, and can take place anywhere that energy is present, even outside of the electric grid. Like a starfish losing an arm, Bitcoin can survive the loss of large portions of its industrial base without incident. China’s recent ban took around 45% of Bitcoin’s hash rate offline, but the protocol itself kept ticking along. As a practical consequence of that ban, Bitcoin has no current dependency on a single state. Since Bitcoin mining is a single market (i.e., the protocol pays the same rate per block to miners anywhere, regardless of location), policymakers banning Bitcoin mining locally effectively subsidize the activity elsewhere. Like gold, trying to globally regulate the asset is a fool’s errand.

Much has been said on the prospects for rendering Bitcoin mining more sustainable, and the industry has been galvanized over the last year. The Bitcoin Mining Council has begun releasing disclosures from constituents. A number of large miners have begun voluntarily disclosing their sustainability, and buying offsets for the remainder. The emergence of flared gas mining is a potent near-term lever which could decarbonize Bitcoin mining. But ultimately, Bitcoin mining should be understood similarly to the gold mining industry: a global industry, composed of thousands of heterogeneous participants. Some of them are accountable to U.S. capital markets and hence more inclined to be transparent and sustainable; but a good portion of hash rate will likely always be opaque.

Understanding the Bitcoin energy debate as the continuation of the age-old debate about the resource costs of non-state money helps clarify the terms. The reason critics fixate on Bitcoin’s energy impact is not its particular rapaciousness — mobilizing against an industry accounting for, generously, 0.1% of global emissions will not solve the climate crisis — but because they dispute its relevance and merit as a monetary good. Similarly, critics railed against the purportedly high resource costs of the gold standard not because gold was too expensive — as demonstrated, fiat has increased the resource costs imposed by the acquisition of gold — but because they resented the monetary discipline imposed by the gold standard itself.

Not once have I encountered a critic of Bitcoin formulating a challenge to Bitcoin’s resource costs in a rigorous and data-backed manner. The challenge, were it to appear, would look something like, “Bitcoin’s kilowatt hours (KWh) consumed (or CO2e emissions) per unit of settled (/stored) value is excessively high relative to the equivalent ratio for Fedwire.”

Bitcoin’s costs are the denominator in the equation of its efficiency — yet the numerator is rarely considered. How often do you hear critics conceding that Bitcoin provides valuable monetary freedom for tens of millions of individuals worldwide, especially those in unstable states, lacking meaningful property rights? And with fiat, the denominator — its deleterious effects on society — is scarcely ever included in the accounting of its own resource efficiency.

Now, if bitcoin becomes the base money in a neo-gold standard, does it pose more of a threat to the earth’s resources than gold ever did? Doubtful. Bitcoin’s annualized issuance rate is 1.7%. Throw in aggressive estimates for fees and you can push that to 2.1%. The issuance component of Bitcoin’s security budget halves every four years, with the next halving due in 2024. Unless fees massively increase, and keep increasing every four years to offset the halvings (they’ve never held at much more than 200 BTC per day for a sustained period), Bitcoin’s security spend will likely decline in bitcoin terms over the medium and long term. (I’m aware that this is a controversial assumption.)

If bitcoin reaches parity with gold, as would be presumably necessary for it to serve as specie in a neo-gold standard system (implying a BTC unit price of $579,000 as of today), Bitcoin’s resource costs would be effectively identical to those of gold. How is this possible? Well it’s an odd coincidence that gold’s issuance rate is almost exactly the same as Bitcoin’s in this current halving regime.

In 2020, gold equivalent to 1.76% of the aboveground stock was mined. The figure has averaged 1.83% over the last decade. In 2020, gold producers collectively raked in $191 billion through mining (before any costs are factored in), a figure equivalent to 0.2% of global GDP. So, even if bitcoin completely supplants gold as the global monetary substrate of choice, it will only match gold’s current resource cost (which again, virtually no one ever complains about). Of course, even in the fever dreams of its biggest fans, Bitcoin isn’t likely to hockey stick to gold parity overnight, so if it takes bitcoin longer than three years to achieve parity, the Bitcoin mining industry will likely never match gold mining in terms of economic significance.

Layer on the fact that Bitcoin mining is effectively a fully synthetic version of gold mining, taking place only in data centers, requiring no diesel, arsenic or mercury, and our digital gold looks distinctly more sustainable than its analog counterpart. Gold extraction and refining is a heavy industry that requires the actual manipulation of physical matter, meaning it can never fully mitigate its carbon footprint. By contrast, to decarbonize, Bitcoin miners simply need to direct green power to their machines — which they are already in the process of doing.

The purpose of this comparison is not to denigrate gold, but to demonstrate bitcoin’s likely lower resource burden, even under the most optimistic scenario. Regardless, gold’s resource costs and ecological externalities — significant though they may be — are clearly worth it. The philosophical divide concerns neither gold nor bitcoin nor fiat; it ultimately reduces down to those who believe that money should be the sole purview of the state, and those who question the state’s monetary prudence and look to alternatives. As with gold’s resource costs, the energy debate is just a metonymy for this more fundamental question.

As for Friedman, he ended up dramatically reversing himself on the resource cost critique later in life. In his 1986 tract “The Resource Cost Of Irredeemable Paper Money,” he points out that fiat has very real costs: namely, the exorbitance of unstable prices and inflation.

“I took it for granted that the real resource cost of producing irredeemable paper money was negligible, consisting only of the cost of paper and printing. Experience under a universal irredeemable paper money standard makes it crystal clear that such an assumption, while it may be correct with respect to the direct cost to the government of issuing fiat outside money, is false for society as a whole and is likely to remain so unless and until a monetary structure emerges under an irredeemable paper standard that provides a high degree of long-run price-level predictability.”

In the paper, Friedman provides a simple example of the resource costs of a fiat regime — the new requirement by firms to hedge foreign exchange exposure. As he notes, foreign exchange futures were virtually unheard of until the link between the dollar and gold was severed. Under the first Bretton Woods system, the dollar was a fixed weight of gold and other currencies were linked to the dollar. Once that tether was broken, economic agents were forced to participate in the foreign currency markets. But few have dared to quantify these costs. He ends the paper with the following entreaty:

“I do not know of any attempt to measure the real resource costs of an irredeemable paper currency and to compare such costs with the real resource costs of a commodity currency. That is clearly a much needed research project.”

Today, 35 years on from his request, and 50 years after the total collapse of Bretton Woods, it might be time to revisit Friedman’s question once again.

This is a guest post by Nic Carter. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.


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