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Research: Bitcoin Consumes Less Than Half The Energy Of The Banking Or Gold Industries

A recent report from Galaxy Digital found that the Bitcoin network consumes less than half the energy consumed by the banking or gold industries.

A recently released research report from Galaxy Digital has calculated the energy consumed by the Bitcoin network and then compared it to other industries, including the banking industry. It found that Bitcoin consumes 113.89 terawatt hours (TWh) per year, while the banking industry consumes 263.72 TWh per year.

The report put Bitcoin’s energy consumption into perspective by distilling some of the unique characteristics of Bitcoin and how they relate to and impact its energy consumption.

“Bitcoin is a fundamentally novel technology that is not a precise substitute for any one legacy system,” according to the report. “Bitcoin is not solely a settlement layer, not solely a store of value, and not solely a medium of exchange. There is no denying that the Bitcoin network consumes a substantial amount of energy, but this energy consumption is what makes it so robust and secure.”

Galaxy Digital compared the Bitcoin network’s energy consumption with that of the banking system as well as the gold industry, since the largest cryptocurrency is often compared with the two. The report found that banking and gold consume around 263.72 TWh per year and 240.61 TWh per year, respectively, while Bitcoin consumes much less energy — 113.89 TWh per year.

After comparing different sectors’ energy consumption with that of Bitcoin, the report jumped into showing how vital energy is for the Bitcoin network and ways it can help the world reduce its pollution of the atmosphere.

“Critics often assume that the energy expended by miners is either stolen from more productive use cases, or results in increased energy consumption,” it reads. “But because of inefficiencies in the energy market, bitcoin miners are incentivized to utilize nonrival energy that may otherwise be wasted or underutilized, as this electricity tends to be the cheapest.”

Galaxy Digital also showed that a significant part of the world’s energy production is wasted — about 2,205 TWh per year which is 19.4 times that of the Bitcoin network.

“Though the revenue associated with mining varies, miners have the luxury of flexibility, with the option to switch their equipment on or off at any time,” according to the report. “This makes Bitcoin mining the ideal energy sink: anyone, anywhere, can monetize excess energy by plugging in equipment and switching it off at their convenience. One example of where Bitcoin mining acts as an energy sink is in oil fields, resulting in a direct reduction in methane emissions.”

According to the report, oil fields currently generate about 40 percent of the world’s energy. However, they also frequently produce methane as a byproduct, whose greenhouse effects are 25 times as environmentally damaging as those of an equivalent quantity of carbon dioxide.

“Bitcoin mining offers a solution,” the report suggested. “Companies like Great American Mining, Upstream Data, and Crusoe Energy Systems are building infrastructure to capture this methane at the wellhead and use the otherwise-wasted gas to mine bitcoin. This means that oil producers can ensure a 24x reduction in emissions compared to venting that methane into the atmosphere.”

Source: Bitcoin magazine

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The Top-10 Bitcoin Mining Pools Have Signaled For Taproot

Each of the top-10 bitcoin mining pools by hash rate have signaled at least one block for the Bitcoin network’s Taproot soft fork activation.

After bitcoin mining pool BTC.TOP recently mined a “green” block, the top-10 bitcoin mining pools by hash rate have now all signaled at least one block for Taproot activation, according to data from Taproot.watch.

BTC.TOP is the tenth-largest bitcoin mining pool by hash rate, representing 4.14 percent of the entire Bitcoin network’s hash power. Although BTC.com and Binance Pool have signaled at least one block, Taproot.watch considers the most recent block when accounting for a pool, so these pools may be presented as not signaling on Taproot.watch.

At the time of writing, 77.74 percent of the Bitcoin network’s hash rate and 64.63 percent of blocks are currently signaling support for the activation of the protocol upgrade. However, there are still 1,455 blocks remaining in the current Taproot Speedy Trial signaling epoch.

Speedy Trial, a variation of BIP9 versionbits described in BIP341, is a soft fork deployment method in which miners help coordinate the upgrade by signaling support in their mined blocks. The method’s signaling period is the Bitcoin difficulty adjustment window of 2,016 blocks (roughly two weeks).

Taproot gets locked in as a Bitcoin protocol upgrade for November if 90% of blocks mined signal readiness during one such period between May and August.

With essential improvements to the Bitcoin base layer, Taproot is highly anticipated. It will include privacy and cost benefits and pave the way for further improvements to be implemented in multi-signature wallets, the Lightning Network, and other smart contracts deployed on the Bitcoin blockchain.

Source: Bitcoin magazine

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BlackRock Chief Investment Officer Rick Rieder Thinks Bitcoin Is Durable

Rick Rieder, a chief investment officer for major asset manager BlackRock, recently touted many positive attributes of bitcoin.

Rick Rieder, BlackRock’s chief investment officer of global fixed income and head of the global allocation team, recently made notably positive comments regarding Bitcoin during an appearance on CNBC’s “Squawk Box.”

“Bitcoin is an interesting asset,” said Rieder. “I think it’s durable. I think it will be part of the investment arena for years to come.”

Rieder was asked his opinion on Bitcoin in light of Elon Musk’s recent announcement that Tesla will be halting acceptance of the largest cryptocurrency as payment for its electric vehicles due to environmental concerns.

“[There are] some … hurdles to overcome, and I think [Musk] was mentioning one of them,” shared Rieder. He later added some challenges he currently sees regarding Bitcoin, such as volatility, regulatory dynamics and fiat currency concerns.

Finally, Rieder claimed that although he thinks these challenges are real, “they will be overcome over time,” as bitcoin gets more mature. Rieder sees bitcoin as an asset rather than a potential fix to some of the world’s current monetary problems.

BlackRock is an asset manager that has been in operation for over 32 years in the United States and it recently hit a record $9 trillion in assets under management (AUM). The company does own bitcoin, as Rieder noted in the interview.

Source: Bitcoin magazine

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Bitcoin Miner Greenidge Generation Commits To Being Carbon Neutral By 2021

Greenidge Generation has announced it will offset all greenhouse gas emissions from its bitcoin mining operations by June 2021.

According to a press release sent to Bitcoin Magazine, Greenidge Generation Holdings’ bitcoin mining operations facility in Upstate New York will be entirely carbon neutral by June 1, 2021.

“Greenidge will purchase voluntary carbon offsets from a portfolio of U.S. greenhouse gas reduction projects,” according to the release. “Each project has been reviewed and certified by one of three well-recognized Offset Project Registries … ensuring that any projects funded by Greenidge reduce emissions or increase sequestration of greenhouse gas in a manner that is real, permanent, and verifiable.”

Greenidge Generation Holding Inc. is a holding company that includes Greenidge Generation LLC, its vertically-integrated bitcoin mining and power generation facility in Upstate New York. Its 106-megawatt natural gas plant allows Greenidge to mine bitcoin and contribute to the security of the Bitcoin network with reduced costs while meeting the power needs of homes and businesses in the Finger Lakes region.

“Our bitcoin mining capability is already best-in-class and seamlessly integrated with our electricity generation that powers thousands of homes and businesses,” Jeffrey Kirt, CEO of Greenidge Generation Holdings Inc, per the release. “By taking the bold and unique step of making our cryptocurrency mining fully carbon neutral immediately — as opposed to at some distant date in the future — Greenidge is once again leading in environmental efforts.”

Kirt added that, with this commitment, Greenidge is demonstrating that it is possible to secure the Bitcoin network while maintaining a fully carbon-neutral footprint. The company is also calling on others to join in cutting greenhouse gas emissions “now.”

There has been plenty of movement in the Bitcoin energy field lately. At the beginning of this week, Ninepoint announced it would invest its management fees in forest conservation to offset the carbon footprint of its bitcoin exchange-traded fund (ETF). And yesterday, Argo Blockchain announced that it had purchased two hydro-powered data centers to propel its green bitcoin mining vision.

Highlighting some common misconceptions about Bitcoin as an energy “waster,” on Wednesday, Elon Musk tweeted that his company, Tesla, will halt the acceptance of bitcoin as payment for its electric cars due to environmental concerns.

Source: Bitcoin magazine

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Colonial Pipeline Pays 75 Bitcoin Ransom To Hackers

Major U.S. oil pipeline system Colonial Pipeline paid a requested 75 bitcoin ransom to hackers who took control of its data last week.

Colonial Pipeline has paid 75 BTC (around $5 million at the time of writing) to recover data stolen in a ransomware attack committed by hacker group DarkSide, reported Bloomberg.

Colonial is the largest pipeline system for refined oil products in the U.S. The system runs from Texas to New Jersey and spans 5,500 miles, transporting around 45% of fuel consumed on the East Coast. However, the ransomware attack forced the company to shut down the entire pipeline, halting its distribution services to many U.S. states and triggering gas price rises across the country.

Ransomware is a type of computer malware that hijacks the victim’s data, locks them up and demands a ransom payment to restore them. The hackers behind the attacks typically lock the victims’ files using robust encryption methods, in some cases making data retrieval by anyone other than the hackers themselves unfeasible.

If the victim decides to pay the ransom and it is to be in bitcoin, which the Federal Bureau of Investigation (FBI) discourages, they have to purchase the amount of bitcoin required, send it to the attackers, await payment confirmation and hope for the release of their data.

Bitcoin is occasionally used for ransom payments due to its permissionless digital nature. As no government can control, stop or regulate bitcoin transactions, hackers opt to use the cryptocurrency instead of the highly-regulated traditional banking system. In addition, it is impossible to revert the bitcoin ransom payment transaction after it’s sent, and the attackers can verify its arrival trustlessly.

But using bitcoin for nefarious activities doesn’t come without its drawbacks. Many people still misunderstand some aspects of Bitcoin and assume it is anonymous and untraceable — it is not. Bitcoin’s public blockchain is susceptible to forensic analysis, and the attackers’ addresses used to receive the ransom payment can be watched and analyzed by nearly anyone.

Some tools that try to improve the hackers’ future spending privacy do exist, such as CoinJoin and mixing services. However, successfully achieving spending privacy requires a great deal of knowledge and care for bitcoin privacy best practices. Consequently, some attackers that have used these tools have recently been caught.

Source: Bitcoin magazine

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Argo Blockchain Buys Hydro Data Centers To Realize Green Bitcoin Mining Vision

Argo Blockchain has purchased two hydro-powered data centers, allowing it mine bitcoin in a more sustainable and green way.

Cryptocurrency mining firm Argo Blockchain has continued its move toward environmentally-friendly bitcoin mining by purchasing two hydroelectric-powered data centers in Quebec, Canada, according to a press release on the London Stock Exchange, on which Argo is listed.

“Argo’s purchase of data [centers] in Canada represents another milestone for the Company as we seek to take greater control over our mining production and mining cost base, while also laying solid foundations for long-term growth,” shared Argo’s CEO Peter Wall in the release.

The two data centers amount to 20 megawatts of power capacity, currently housing a significant portion of Argo’s bitcoin mining equipment. In addition, the acquisition seeks to provide the company with long-term stability by increasing its control over the facilities which house its mining machines.

“The data [centers] are powered almost entirely by electricity generated from hydro power, which is a key part of [Argo’s] green mining vision,” per the release.

Argo Blockchain is taking action to shift its bitcoin mining operations to “green” alternatives and solutions on a number of fronts. With a focus on renewable energy sources, the company purchased a 320-acre plot in Texas last month, which gives it access to 800 megawatts of electrical power. Wall shared at the time that it chose that site in particular because it offers “some of the lowest electricity rates in the world and the majority is from renewable sources, namely wind and solar.”

The low-cost aspect is essential because bitcoin mining is a free market, meaning miners will always gravitate toward the cheapest energy sources available. In this case, Texas resolving to provide renewable energy sources for little cost is what attracted and allowed Argo Blockchain to apply its “green mining vision.”

With the correct incentives, nation-states can proactively empower bitcoin mining pools to shift even more to energy sources that are less detrimental to our planet, accelerating the entire world’s energy transition to renewables with clean energy production and storage.

Source: Bitcoin magazine

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Bitcoin Mining Difficulty Hits All-Time High As Second Taproot Signaling Period Begins

The start of a new Bitcoin difficulty adjustment window brought a major increase and a new Taproot signaling period with 63% green blocks.

Bitcoin mining difficulty hit an all-time high after increasing by 21.5% today, according to data from Glassnode. It was the largest single-day percentage increase in a difficulty adjustment in almost seven years.

In mid-April, the Bitcoin mining hash rate dropped by roughly 25% after some miners went offline due to blackouts in China. The drop in hash rate caused the self-regulating Bitcoin mining difficulty to decrease in its subsequent difficulty adjustment. That was necessary because, with fewer miners online, less hash rate was being employed on the network, and blocks took much longer than the 10-minute mining interval target, per Glassnode data.

As miners started getting back online in the last couple of weeks, the network’s hash rate increased simultaneously. With increased hash rate and the same difficulty, blocks started getting mined in eight minutes on average last week, well below the 10-minute target.

New Taproot Signaling Period Begins

After the newest Bitcoin Core software release, the difficulty adjustment window of 2,016 blocks (roughly two weeks) also serves as Taproot’s activation signaling epoch. Taproot gets locked in as a protocol upgrade for November if 90% of blocks mined signal readiness during a signaling period between May and August.

The soft fork’s first signaling epoch has just ended, marked by the increased mining difficulty in Bitcoin’s difficulty adjustment today. Although more than 70% of the network’s hash rate is already signaling readiness, only 40% of blocks had signaled “green” during the last epoch, according to Taproot.watch.

A new Taproot signaling epoch has just begun, and per Taproot.watch, 63% of blocks have signaled readiness at the time of writing. Bringing essential improvements to the Bitcoin base layer, the soft fork is highly anticipated by Bitcoiners, and miners now have five epochs left for Taproot to be activated in November.

If activated, the upgrade will pave the way for further improvements to be implemented in multi-signature wallets, the Lightning Network and other types of smart contracts that can be deployed on the Bitcoin blockchain. Other benefits of Taproot include increased privacy and cheaper complex transactions.

Source: Bitcoin magazine

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First-Ever Dual-Funded Mainnet Lightning Channel Opened

The world’s first dual-funded Lightning channel has been opened, bringing more features to the network while reducing fees.

The world’s first dual-funded mainnet Lightning Network channel was opened last week in block 681,753 on the Bitcoin mainnet. Blockstream used its c-lightning implementation of the Lightning Network protocol to open the channel and announced it via a blog post.

A dual-funded Lightning channel allows both participant nodes to contribute to the channel’s opening transaction. It is unique because, up to this point, only the Lightning node that initiated the channel opening was able to add funds to the funding transaction.

The ability to open dual-funded channels is an improvement to the Lightning Network because it adds features and reduces costs. For instance, with the new channel type, payments can be sent in both directions immediately, preventing the creation of unbalanced channels — a situation where the entire channel’s balance belongs to the channel-opening node.

Dual-funded channels also reduce the cost of adding liquidity to Lightning channels. As demonstrated in a recent talk at the University of California, Berkeley by Clara Shikhelman of Chaincode Labs, opening a dual-funded channel requires fewer on-chain Bitcoin fees. As a result, deploying capital into the Lightning Network gets cheaper and more efficient, which might increase liquidity on the network.

This improvement upon the standard single-funded Lightning channels is currently considered a “draft.” It will be regarded as a standard only after it gets implemented by another implementation of the Lightning Network protocol.

Source: Bitcoin magazine

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Biden's $1.9 Trillion Stimulus Bill Pushes Miami Mayor To Buy Bitcoin

Francis Suarez, the mayor of Miami, bought bitcoin in response to a $1.9 trillion stimulus bill passed by the U.S. Senate in March.

In a recent interview, Miami Mayor Francis Suarez said that he bought bitcoin right after Joe Biden’s $1.9 trillion stimulus bill passed the U.S. Senate in March, claiming that he doesn’t think people will want to stay in dollar-denominated currencies.

“I did buy bitcoin and ethereum and I bought it literally the day … that the $1.9 trillion spending bill passed the Senate and it was going to the president’s desk,” Suarez shared in the interview during Ethereal Virtual Summit 2021. “If the federal government’s going to spend $1.9 trillion then I think I need to have some [bitcoin], and this is definitely going to go up.

“And frankly if they spend another $2.2 trillion on an infrastructure bill, [then bitcoin is] going to continue to go up,” Suarez continued. “I mean there’s just no way that it can’t because I don’t think people are going to want to stay in dollar-denominated currencies.”

Mayor Suarez has been taking deliberate measures to get Miami one step ahead of other American cities by integrating Bitcoin and other disruptive technologies into the city’s operations.

After Bitcoin.org and Bitcoincore.org maintainers were asked to remove the Bitcoin white paper from their websites, Mayor Suarez stepped forth and hosted the white paper on Miami’s website. And the largest Bitcoin conference of all time, Bitcoin 2021 (which is hosted by Bitcoin Magazine parent company BTC Inc), will be held in Miami in June.

In addition, the mayor’s proposal for allowing Miami employees to receive compensation in bitcoin and allowing the city to add bitcoin to its balance sheet received support from city commissioners in February. Two months later, Miami-Dade passed a resolution to enable residents to pay for county taxes, fees and services with bitcoin.

Source: Bitcoin magazine

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Ninepoint To Fully Offset Carbon Footprint Of Its Bitcoin ETF

Canadian investment manager Ninepoint will invest management fees in forest conservation to offset the carbon footprint of its bitcoin ETF.

Ninepoint, a Canadian investment firm with $8 billion in assets under management, will offset the carbon costs of its bitcoin exchange-traded fund (ETF) using a portion of its management fee, according to a recent release.

“Bitcoin is both a rapidly growing asset class and increasingly important financial technology. We must all do our part to ensure Bitcoin grows in a more sustainable way,” said Ninepoint’s managing director of digital assets, Alex Tapscott, per the release. “Investors increasingly want real ESG solutions for their portfolios, while not sacrificing on diversification. I believe Ninepoint Bitcoin ETF offers the best of both worlds and could be a model for our industry.”

To offset the ETF’s carbon footprint, Ninepoint will be supporting various forest conservation projects in the Amazon. These programs offset the release of carbon dioxide into the atmosphere by planting trees that convert it into oxygen, and contribute to the United Nation’s sustainable development goals. Ninepoint is partnering with environmental software project CarbonX and The Crypto Carbon Ratings Institute to determine the ETF’s carbon footprint and how to offset it.

The Ninepoint Bitcoin ETF is the result of a recent unitholder-approved conversion from what was a closed-end investment fund that had over $300 millions in assets. Units of this bitcoin trust were converted to units of the ETF on a one-to-one basis.

Ninepoint’s initiative stems from the common assumption that Bitcoin mining is bad for the planet’s climate due to its extensive energy use and high carbon emissions. Though it is not the case that Bitcoin is bad for the planet, and Bitcoin does not waste energy. Rather, Bitcoin is key to an abundant, clean energy future and presents an opportunity to accelerate the global energy transition to renewables as well as promote programs like Ninepoint’s. 

Source: Bitcoin magazine