Bitcoin mining crisis
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Content:
- Is cryptocurrency bad for the environment?
- Crypto miners blamed for Kazakhstan energy crisis
- Kosovo bans cryptocurrency mining in face of European energy crisis
- Kosovo just banned crypto mining. Why?
- Bitcoin Uses More Electricity Than Many Countries. How Is That Possible?
- ‘Great mining migration’: Power-hungry Bitcoin leaves China
Is cryptocurrency bad for the environment?
These benefits include land, labor, data and other resources needed to facilitate capital interests elsewhere. Blockchain is implicated within crypto-colonialism in three ways. Secondly, the technology perpetuates North-South trade and investment inequalities, and thirdly, a new power asymmetry is enabled by the technology through data colonialism and surveillance capitalism.
In reviewing the spaces where crypto-colonialism manifests, the paper argues that despite being distributed, techno-ecological fixes are never placeless. How people configure, use, and are impacted by blockchain platforms is geographically contingent. Anthropogenic greenhouse gas emissions present unprecedented, and not evenly distributed, challenges for human development globally. Each year, an average of 24 million people are displaced because of increasingly frequent extreme climatic events.
By , million people across the Global South will become climate refugees Kinstler, It is also inspiring new technical fixes using blockchain technology. Despite promises of transforming the opaque world of climate finance Marke, , providing disaster preparedness solutions for local communities in the Global South Thomason et al. These appropriations include land, labor, data and other resources needed to facilitate economic growth elsewhere.
The term Global South is used here to distinguish between spaces still suffering the scars of colonial expansionism, from those that have historically benefited from these processes Kapoor, Tsing , p. The paper concludes by discussing how more equitable outcomes might be realized. Despite being distributed, blockchain applications do not occupy an algorithmic place apart.
They are always messily embedded in places Zook and Blankenship, ; Lally et al. Governance frameworks of blockchain applications are heavily entangled with social-spatial relations in multiple ways Dodd, The costs and benefits of blockchain-based conservation, community development, and disaster relief, are rarely evenly distributed Howson, Blockchain-based interventions in the Global South, though rooted in an obvious will to improve Li, still call upon traditions of frontier investment — the belief that being bold and early in underexplored spaces enables the highest rewards Li, As Bridge argues, frontiers are imagined and constructed as sites of bountiful emptiness.
They are fecund spaces, empty but full. For their proponents, these sites are empty of other entrepreneurial ideas, histories and claims, but full of potential for new and improved use. As Tsing , p. This was at the expense of greater economic dependence upon the neo-colonial power. These projects are all legitimized under a banner of sustainable development in response to calls for urgent action on climate crises.
This form of appropriation includes the transfer of land as property, use rights and control over natural resources that were once publicly or communally owned — or not the subject of ownership — from marginalized groups into the hands of the powerful Fairhead et al. Green grabbing is not the same as a simple, agreed transfer of ownership or sale. It is a central characteristic to processes of accumulation and dispossession Harvey, It is an emotive term because it is unjust. This form of grabbing often entails the expulsion of existing land claimants in order to release resources for private capital Fairhead et al.
It is not clear how many options for future off-sets have been sold. There also remains no plan to offer financial compensation to local people. According to Enrici and Hubacek , the Rimba Raya reserve is the only project of its kind in Indonesia to secure funding from global carbon markets.
None of this income is shared with those paying the highest costs, such as those displaced by conservation efforts. However, no transfer of tokens could ever be made within the current global governance regime of crypto-commodity markets. Athelia 3 , a private fund based in the tax haven of Luxembourg, is providing carbon credits associated with the Cordillera Azul National Park to its strategic Maltese partner, Poseidon, for use on their Ocean platform.
Environmental assets or natural capital , are a monetized representation of the services natural systems provide for free. Off-sets and any crypto-tokens associated with them, derive their value from the health of conserved biophysical systems. Due to the dynamic nature of atmospheric CO 2 , in the context of the global climate system, it does not matter where in the world emissions are avoided.
Global markets for saved carbon can be used to ensure net emissions are reduced at the cheapest price. For-profit companies such as Adaptation Ledger, Climate Trade and Climate Futures have launched blockchain platforms for carbon off-setting, green financing and sustainable investments. The 1Planet blockchain platform developed by Climate Futures enables purchases of environmental assets from energy efficiency initiatives in Africa, Latin America and India.
Individuals and companies can purchase carbon credits as blockchain tokens to reduce their net emissions by supporting, for example, the installation and distribution of fuel-efficient cooking stoves in Zambia.
The value of these credits are derived from the assumption that concrete stoves reduce wood-use for cooking compared to traditional open fires. The implication here is that forest communities in the Global South, collecting dry wood for cooking and often living with a near neutral carbon footprint Gazull and Gautier, , are framed as more responsible for climate change, compared to frequent flyers and large multi-national corporations in the Global North.
The Green Assets Wallet has been developed to help scale the green debt market, primarily in Africa. Green bonds operate just like conventional debt instruments, with similar calculations of risk and credit rating. However, dividends are actioned against contracted sustainability outcomes, usually including a calculation of achieved emissions reductions from the associated investment.
As a debt instrument, Green bonds in Africa are generally high-risk due to the poor credit ratings of recipient countries. Using blockchain to bring trust to these transactions risks maintaining pre-existing North-South trade and investment flows and neo-colonial geographies of inequality that render much of the global south increasingly marginalized.
Scaling up green debt markets in Africa restricts the organic growth of green enterprises as they risk their returns disappearing to international investors, whose income may be guaranteed by public sector entities Bracking, The most environmentally-effective solution for companies and individuals with high carbon footprints, whose sites of production are located in the Global North, is obvious — prevent excessive pollution at source.
The most cost-effective solution is usually more creative, requiring innovative financial instruments and accounting methodologies, and the ongoing externalization of environmental costs toward the Global South.
In opposition to traditional North-South investment flows, rather than monetizing removals only from the Global South, the Nori Marketplace uses blockchain technology to incentivize land-owners in the Global North. Farmers in the US can receive rewards for adopting regenerative practices that mitigate climate change and improve the carbon content of soils.
Individuals and businesses can purchase NORI tokens that are tradable via cryptocurrency exchanges Siegel, Retirement of the NRTs is immediate and generates a certificate that is permanently recorded on the Ethereum blockchain.
However, as with any carbon off-set, these assets are a fetishized abstraction of an unfathomably complex biophysical system Howson et al. Blockchain tokens are not capable of representing much more than a rough estimate concerning temporarily removed carbon over time. Which begs the question, why use a blockchain at all? Appropriations of things, including data, are legitimized by a necessity for urgent climate action.
Unlike traditional forms of colonialism, data colonialism involves not one center of colonial power the West , but multiple. These centers include, for example, Facebook, Palantir, Accenture and Microsoft, and according to Kinstler these players are seeing extractive opportunities from human migration caused by climate change. The acceleration of people on-the-move provides challenges for development agencies committed to achieving various Sustainable Development Goals SDGs efficiently.
These include SDG Every major aid-granting agency is either incubating, researching, or piloting a digital identity program for those displaced Kinstler, Personal data, entitlements and transaction logs are stored on the Ethereum blockchain providing a virtual bank account and ID for each refugee.
While the Building Blocks platform is a demonstrable success, the agency should be concerned that conducting iris scans on refugees in shops robs them of dignity. Sensitive, personally identifiable information for some of the most vulnerable people in the world is also being generated and made accessible across agencies, inevitably introducing greater risk of data breaches.
Some for-profit start-ups have also developed blockchain tools to manage sensitive information. PassBase is a self-sovereign ID platform that uses government-issued documents, linked social media accounts, and biometric signatures. Where these blockchain platforms are deployed, refugees and other vulnerable people, might find themselves forced to give up personal including biometric information about themselves, stored for as long as there is a functioning internet on an immutable archive, in return for temporary support with basic necessities.
This data could also be used in the future to make decisions about individuals with far-reaching consequences. Some may suffer punitive restrictions based on decisions made using biased algorithms calculating, for example, risk of absconding or working without a permit.
Some may struggle to access credit or insurance on the basis of patterns in historical datasets. Wrongful convictions, incomplete medical histories, or errors concerning ones affiliations are immutable on a blockchain. Owning ones ID as a citizen of a specific state might prove unproblematic in many instances. However, groups such as the Rohingya are continually displaced by climatic events and their citizenship is often contested between the state and the individual.
Bank accounts, passports, access to credit or insurance are restricted even where clear jus soli citizenship rights by birth exist. The blockchain development start-up, Rohingya Project, understand that the central problem is not identity per se , as being officially recognized as Rohingya is rarely useful.
The Rohingya Project aims to create a self-sovereign ID platform that does not rely on any state entity or other third-party intermediary to issue supporting documents. Users of the platform in Malaysia will be able to access credit and other services via a crypto-wallet to encourage entrepreneurship and financial sustainability within the Rohingya community Rohingya Project, Data shared by some of the most persecuted on a blockchain, highlights the obvious need for a more robust regulatory framework to effectively mitigate the risks associated with data protection, privacy and human rights.
Blockchain is enabling new opportunities for speculative investment through climate crises globally. This commentary has explored how international development, disaster relief, and climate change mitigation credentials are being called upon to legitimize crypto-colonialism — the extraction of economic benefits from those suffering the scars of empire in the Global South.
There continues to be a lot of hype surrounding blockchain applications, fanciful use-cases and sinks for speculative investment. Despite there still being few successful examples, there is a clear need for more situated critical analysis of active case-studies. Only by doing case-study analysis can critical scholars reveal the inequitable terrain of project-benefit distributions to expose the likely winners and losers.
The most effective means of engaging exploitative blockchain platforms is by supporting and enacting alternate techno-economic strategies, such as platform cooperatives, within and outside of blockchain. If any project, blockchain or otherwise, claims to be emancipatory, the foremost step is to abandon the claims of a technology as a starting point, and instead give autonomy and agency to local communities to design and manage their own future, rather than having outside interests, or technologies themselves, determine a future for them Crandall, The crypto-colonial endeavors, explored throughout this commentary, remain ultimately about advancing capitalist forms of governance.
Until the focus shifts toward achieving more equitable outcomes, not only will blockchain solutions lead to an oversimplification of socio-ecological complexity, but will further embed colonial responses to climate crises. The author confirms being the sole contributor of this work and has approved it for publication. The author declares that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.
Amoore, L. Cloud geographies: computing, data, sovereignty. Google Scholar. Cryptic biodiversity loss linked to global climate change. Change 1, —
Crypto miners blamed for Kazakhstan energy crisis
Lake Kapchagay, an artificial lake in southern Kazakhstan, is a popular destination for local tourists. In addition to a large dam, this small town is now home to an energy-intensive bitcoin mining farm. The promise of saving on energy costs is attracting more and more cryptocurrency mining companies, whose energy-intensive activities leave a large carbon footprint. French companies like BigBlock Datacenter, which failed to sustain its business in Ukraine due to political instability and rising electricity costs, are now betting on Kazakhstan. French blockchain calculation professionals view Kazakhstan as an attractive source of renewable energy.
Kosovo bans cryptocurrency mining in face of European energy crisis
The computer process that generates each coin is said to be on pace to require more electricity than the United States consumes in a year. This bitcoin "mining" allegedly consumes more power than most countries use each year, and its electricity usage is roughly equivalent to Bulgaria's consumption. But here's another thing you might want to know: All of that analysis is based on a single estimate of bitcoin's power consumption that is highly questionable, according to some long-time energy and IT researchers. Despite their skepticism, this power-consumption estimate from the website Digiconomist has quickly been accepted as gospel by many journalists, research analysts and even billionaire investors. That model is also the basis for forecasts of bitcoin's future energy use that remind some experts of wild projections about internet data traffic in the mids that contributed back then to companies spending far too much for capacity they would eventually not need. It is a tiny, tiny part of all data center electricity use. There is no doubt that bitcoin has an energy efficiency problem. New units of digital currency are created by solving equations, a process known as bitcoin mining that was designed to reward participants with bitcoins roughly every 10 minutes.
Kosovo just banned crypto mining. Why?
Kosovo has banned the mining of cryptocurrency in a bid to reduce electricity consumption amid a severe energy crisis. Power outages plunged the Balkan nation into difficulties late last year, with its largest coal-fired power plant closing in December due to technical issues. The country of 1. As a result of these problems, Kosovo now has to import 40 per cent of its energy at a time when European gas prices are ballooning. They rose by more than 30 per cent on Tuesday because of limited supply from Russia.
Bitcoin Uses More Electricity Than Many Countries. How Is That Possible?
He is responsible for the English speaking market of Youmatter since Is bitcoin bad for the environment? Unlike most forms of currency issued by single entities usually central banks , Bitcoin is based on a decentralized network. Its transactions are approved by different miners who simultaneously solve complex equations using specific hardware and plenty of energy. But how impactful is Bitcoin, really?
‘Great mining migration’: Power-hungry Bitcoin leaves China
There has been a lot of talk in the news recently about how much energy Bitcoin mining uses and its potential impact on the environment. Today we explore just how much energy Bitcoin mining really uses and 5 possible ways to reduce or offset its power consumption. In , Google revealed that it used enough energy from fossil fuels to continuously power , homes, which is about one quarter the output of a nuclear power plant. At the time, one Google search was equivalent to turning on a 60W light bulb for 17 seconds. Fast forward to today, Google just announced that they purchased enough clean energy in to offset their entire carbon footprint. They assigned a lot of smart people to work on the problem, invested billions in reducing their carbon footprint, and made huge energy efficiency gains. If you believe the researchers, the annual amount of energy needed to mine Bitcoin is more than the entire annual electricity needs of Ireland.
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Proof-of-Work cryptocurrency mining —commonly known as Bitcoin mining — is a growing industry in New York and poses a massive threat to our climate. Speculators are invading upstate in order to make a fake buck, bringing little economic benefit to the communities they are based in, while hampering the progress New York is making to move away from burning dirty fossil fuels. Kathy Hochul needs to declare a moratorium on proof-of-work bitcoin mining in New York State. Once a coal-burning plant, it closed its doors and reopened years later as a natural gas peaker plant.
Bitcoin has attracted the attention of cryptocurrency investors, climate campaigners, and energy experts alike. The currency has been reported to use an awful lot of energy; it currently consumes around TW hours per year, placing it at 0. But can bitcoin mining and renewables work together for a more stable grid and a conscious spending of energy? Over the past few years, several reports have claimed that bitcoin energy consumption has been spiralling out of control. For example, one report has suggested that the bitcoin network will start using as much electricity as the entire world does today. In fact, once coins have been issued, the energy required to validate these transactions is minimal.
The mass adoption of cryptocurrencies could lead to an escalating climate crisis if things were to remain as they are. Cryptocurrencies are currently disproportionately affecting those most vulnerable and exacerbating social and environmental challenges for those already experiencing multiple dimensions of deprivation, new research finds. Engaging in conversation about its impact and solutions are of utmost importance to mitigate its impact and make the industry more sustainable. The digital infrastructure behind Bitcoin, the most popular cryptocurrency, requires as much energy as the whole of Thailand, with the majority of the energy generated from fossil fuels.
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