Researchers: Bitcoin mining is unsustainable from an environmental point of view

Bitcoin mining would have environmental implications comparable more to the impact of the extraction and refining of crude oil rather than that of gold. According to researchers from the University of New Mexico according to their most recent study published in Scientific Reports. For this reason, Bitcoins should be compared to energy-intensive activities.

“We find no evidence that Bitcoin mining is becoming more sustainable over time,” said Benjamin A. Jones, professor at UNM Economics. “Rather, our findings suggest otherwise: Bitcoin mining is becoming more damaging to the climate. In short, Bitcoin’s environmental footprint is moving in the wrong direction. “

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As of December 2021, Bitcoin had a market capitalization of around US $ 960 billion with a market share among cryptocurrencies of around 41%. It is not possible to accurately determine the environmental impacts deriving from the energy consumption necessary for Bitcoin mining, but it can be defined as an energy-intensive activity.

According to the new study, in 2020 Bitcoin mining required 75.4 terawatt hours of electricity (TWh), a higher electricity consumption than that of the whole of Austria (69.9 TWh) or Portugal (48, 4 TWh) in that year. “Globally, mining or manufacturing Bitcoin uses huge amounts of electricity, which is produced mainly from fossil fuels such as coal and natural gas. This is leading to air pollution and carbon emissions, which negatively impact our global climate and environment. our health, “Jones said.

The authors also stated that according to their studies, the equivalent CO2 emissions caused by the production of the electricity required for mining increased 126 times from 0.9 tons for each cryptocurrency “mined” in 2016 to 113 tons in 2021. The damage caused by Bitcoin mining in the period from 2016 to 2021 is estimated at about 12 billion dollars.

“Our focus is on those cryptocurrencies that rely on Proof of Work (POW) techniques, which can be energy-intensive,” said Regents economics professor Robert Berrens. “As part of broader efforts to mitigate climate change, the political challenge is to create governance mechanisms for an emerging, decentralized industry that regulates energy-intensive POW cryptocurrencies. We need empirical data relating to potentially unsustainable climate damage to be expressed in monetary terms ”.

Bitcoin the worst quarter since 2011 with a 56% drop

After a 2021 in which it reached impressive peaks (all-time high of over 67,000 dollars), Bitcoin is recording the worst quarter of the last 11 years: as of June 30, 2022, the most famous cryptocurrency in the world in fact recorded a resounding -56% compared to approximately $ 45,000 recorded at the beginning of the quarter.
It is the strongest decline Bitcoin has experienced since the third quarter of 2011, when the value of BTC went from $ 15.40 to $ 5.03, and it is worse than the bear markets that occurred in 2014 and 2018, which did mark a decrease of 39% and 49% respectively. In particular, in the month of June Bitcoin recorded a loss of over 37%, the heaviest monthly negative result since September 2011.

The cryptocurrency market has experienced specific turbulence linked in particular to the TerraUSD episode, but also to the uncertainties generated by their regulation (of which the MiCA is perhaps the most striking example). It is true, however, that all financial markets as a whole are going through a particularly difficult phase due to geopolitical instability and economic uncertainties, with the growth of abandonment and the increase in interest rates.

And, perhaps also for this reason, some signs indicate that cryptocurrency investors are staying cautious (or have run out of funds) during this bearish phase. Activity on the Bitcoin blockchain is in fact slowing with a 58% drop in the total volume of coins traded in just nine days.

Less investment and speculation activity also translates into lower commission collections for exchange platforms. And this, combined with the difficulties mentioned above, led several realities to the decision to reduce the staff. A symptomatic case is that of the well-known Coinbase exchange with the hiring block on June 2, together with the revocation of the job offer to almost 350 people, and for a cut of 1000 jobs on June 14. Bitpanda, a company that offers trading tools not only in cryptocurrency markets, also reduced its workforce by 277.

Bitcoin, mining contributes 0.08% of global CO2 emissions

CoinShares shared a new report in which it is estimated that Bitcoin’s mining activities emitted 42 million tons of carbon dioxide in the course of 2021. With global emissions of 49.36 billion tons of CO2, Bitcoin would therefore represent the source of 0.08% of total emissions. The CoinShares report comes at a time when the debate over Bitcoin’s energy consumption has heated up.

CoinShares data was collected using various estimates regarding the efficiency of the Bitcoin network, energy consumption, characteristics of the hardware used, all on a global scale. It is therefore possible that there is some discrepancy with the actual volume of CO2 emissions, but in any case the CoinShares estimate seems to coincide quite well with the sector data.

The report prepared by CoinShares also estimated the total electricity consumption at 89TWh, a value significantly lower than the Cambridge University estimates which are the most taken into consideration and which speak of an annual consumption exceeding 130TWh. In this case it would be 0.05% of the electricity consumed worldwide. According to data collected by CoinShares, 60% of Bitcoin’s mining business is powered by fossil fuels.

“Carbon emissions from the electricity suppliers that power the Bitcoin mining network are irrelevant in the grand scheme of things. With 0.08% of global CO2 emissions, remove the entire mining network from global demand,” and depriving hundreds of millions of people of their only hope for a fair and accessible form of money would amount to nothing more than a rounding error, ”CoinShares comments.

Just in recent days, a group of eight members of the US Congress coordinated by Senator Elizabeth Warren sent a letter to the six largest Bitcoin mining companies in the world with a request to disclose detailed data on their energy consumption. This is a move that underlines the growing regulatory pressure on mining activities in the United States in a context where miners themselves are trying to commit themselves more and more to using ever greater proportions of energy from renewable sources.

the first concert paid in Bitcoin is by One Republic

A historic event for music ended last week thanks to One Republic. The famous US band was the first to create a live concert that can be purchased in Bitcoin. The event was held on November 16th at the gates of Vienna with tickets sold out in a few minutes through the Strike peer-to-peer app.

The American singer is a big fan of cryptocurrencies and NFT and is convinced that music and technology must go hand in hand. Apparently he has no intention of stopping there, in fact the American artist has already announced that in December he will hold another show that will accept payments in Bitcoin.

It is a very important event for the music scene with the first world famous band launching this type of initiative. The world of music has often been associated with NFTs, where this year we have seen several artists try their hand at digital works.

Bitcoin even surpasses Tesla’s market cap! It is now sixth in the world rankings

Bitcoin has seen an increase of over 10% in the last week, marking its new all-time high at around $ 68,500.

According to the ranking drawn up by Companies Market Cap, Bitcoin would settle in sixth place (eighth if gold and silver were added) with a market cap of 1,250 billion dollars, surpassing Tesla (1,167 billion) and Meta, formerly Facebook with a market cap of 941 billion. Climbing the ranking to fifth place we find the e-commerce giant Amazon which has a capitalization of 1.784 billion dollars.

The fourth place is in the hands of Alphabet, the parent company of Google, with 1.964 billion dollars, the oil company Saudi Aramaco opens the podium with a market cap of 1.987 billion dollars.

The second position is currently held by Apple, thanks to the incredible capitalization of $ 2.472 billion.

The throne of the prestigious ranking, however, is held by Microsoft, the multinational founded by Bill Gates capitalizes well 2.527 billion dollars.

The rate hike is another test for Bitcoin

The price of bitcoin (BTC) and other crypto assets may face some headwinds in the coming months as central banks around the world prepare to say goodbye to the ultra-loose monetary policies caused by the COVID pandemic. 19.

As the first central bank in a Western developed nation to do so since the start of the pandemic, Norway’s central bank, Norges Bank, this week raised its interest rate from 0% to 0.25%, citing the need to “initiate a gradual normalization of the official rate “while the economy” normalizes “.

Norges Bank further justified the rate hike by stating that “the reopening of the company has led to a marked recovery of the Norwegian economy and activity is now above the pre-pandemic level”. He added that the rate “will most likely increase further in December”. And while the rate hike in Norway may be insignificant in itself, central banks tend to follow each other when it comes to interest rate policies, as pointed out by Nik Bhatia, bitcoin advocate and author of the book Layered Money:

Also, setting the stage for tighter monetary policies, the Bank of England (BoE) warned Thursday that “global inflationary pressures remained strong” by keeping rates unchanged. He also noted that “cost pressures may prove to be more persistent” than previously believed.

The Fed is keeping rates unchanged for now

Similarly, the US Federal Reserve (the Fed) also decided to keep rates unchanged this week, although it noted in its statement that “inflation is high” and that it “is on track to moderately exceed 2%. for some time”.

2% is the long-term inflation target set by the Federal Reserve.

In comments to reporters, Fed Chairman Jerome Powell said tapering – which means a withdrawal of the central bank’s $ 120 billion in monthly bond purchases to support financial markets – could begin as early as the next Fed meeting at early November, provided the labor market remains “reasonably strong”.

With a rising inflation rate and a tighter labor market, some analysts say the market now seems almost relieved that the Fed is moving towards tapering and rate hikes.

El Salvador’s reckless move: bitcoin becomes official currency

The introduction of cryptocurrency as an official currency in Central America was desired by a sui generis president, a little Macron and a little Chavez. Salvadoran citizens, academics and international economic institutions do not approve of the decision On the same topic: The crazy dance of bitcoins Why do bankers flirt and demonize Bitcoin & Co. Cryptocurrencies have made the internet an insecure place.

Since Tuesday 7 September, El Salvador is the first country in the world to have bitcoin as its official currency, alongside the dollar. But immediately the value of the same bitcoin fell by 9 percent: the same figure that etherum, the second most quoted cryptocurrency, also fell at the same time. Bitcoin has been subject to fluctuations for quite a while, and for example, after reaching $ 64,000 in April, it plummeted in May. El Salvador has thus lost 2.7 million, but President Nayib Bukele assures us that there is no need to worry, because it was expected. In fact, it was precisely the purchase of 550 bitcoins between Monday and Tuesday by his government that caused prices to rise, and a decline after departure was, according to him, physiological.

Libra: the new Cryptocurrency created by Facebook. BCE criticism

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According to the last statements of last month, for the next year the new cryptocurrency created by facebook could come out and could create a real revolution because it could allow developing economies, which lack banking systems, to fully exploit the currency of facebook for purchases of basic necessites.

. Cryptocurrency should be supported by Calibra but will also contribute to many other companies that will form a real association.

In recent days, however, the criticism has arrived from some members of the ECB (the European central bank) stating that the cryptocurrency of facebook are a bunch of absurdities and the financial maneuvers are without regulations.

Even the US state has taken the initiative, asking facebook and other partner companies to suspend the development of the stablecoin.

 

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