Any cryptocurrency worth mining journal
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Content:
- What we know about China’s cryptocurrency crackdown
- How blockchain will help miners meet evolving ESG demands
- Bitcoin (BTC) mining profitability up until November 8, 2021
- Why Quebec is betting big on Bitcoin
- Cryptocurrency
- Cryptocurrency mining presents challenges, opportunities for oil and gas industry
- The Political Geography and Environmental Impacts of Cryptocurrency Mining
What we know about China’s cryptocurrency crackdown
Cryptocurrencies, 1 like bitcoin, raise new legal questions due to their innovative technological concepts. While academic research covers nearly all areas of the technological concepts of those currencies, legal studies focus only on a few topics. The papers that have been published so far discuss mainly economic law, tax law, and financial regulations. At the same time, governments are starting to explicitly regulate cryptocurrencies in terms of anti-money-laundering AML and to clarify or strengthen the legal basis for prosecuting crimes in the context of cryptocurrencies.
Furthermore, criminal investigation in the context of cryptocurrencies is intensifying with the rising number of cryptocurrency-related crimes. Moreover, governments should also start to consider crime prevention in the context of cryptocurrencies. AML regulation, crime prevention, and prosecution have to take heed of the fundamental rights of the citizens affected. To date, legal research has not discussed the relationship between AML regulation regarding cryptocurrencies , crime prevention in conjunction with cryptocurrencies , the prosecution of crimes involving cryptocurrencies and fundamental rights.
Many future regulatory concepts will collide with the fundamental right to property of the owners of cryptocurrency units and the freedom to pursue a trade or profession of owners and operators of exchange platforms, mining pools, etc. In cryptocurrencies organized as peer-to-peer systems, the freedom of association also has to be mentioned. With particular regard to prosecution, law enforcement agencies restrict the freedom of telecommunication, data privacy including the right to informational self-determination , freedom of expression, and the freedom of information.
Whenever some of these fundamental rights are impinged upon, regulation concepts and investigation or prosecution approaches must be provided for by law and must fulfill the criterion of necessity. Further interdisciplinary research is needed to develop efficient and legit prevention as well as criminal investigation concepts. This article examines the relationship between cryptocurrencies, regulation concepts, investigation methods, and fundamental rights. Despite the increasing importance of the regulation of cryptocurrencies, the papers that have been published so far discuss mainly economic law [ 1—3 ], tax law [ 4—6 ], and financial regulations [ 1—4 , 6—14 ].
To date, legal research has not discussed the relationship between anti-money-laundering AML regulation regarding cryptocurrencies , crime prevention in conjunction with cryptocurrencies , the prosecution of crimes involving cryptocurrencies, and fundamental rights [ 15—17 ]. Hence, regulation concepts require an international context and should be discussed in the context of transnational fundamental rights.
Second, the CFR and the ECHR not only belong to the few international fundamental rights charters that are legally binding on Member States but also provide the most extensive jurisprudence with regards to their application [see Art.
Bitcoin will serve as reference example for these currencies since it is the most popular cryptocurrency with the widest acceptance and the largest market capitalization to date [ 18 ]. The arguments also apply to other cryptocurrencies modeled after Bitcoin e.
They may in principle generalize to schemes with different combinations of properties, but further research needs to reassess the applicability for each instance. In terms of regulation, the article will focus on crime prevention concepts, especially AML and prosecution measures in the context of cryptocurrencies.
The lack of a central administrative institution necessitates a regulation concept that is aimed at the natural and legal persons participating in the cryptocurrency system directly or indirectly through its surrounding ecosystem. For the same reason, investigators cannot rely on bank documents, bank employees, or automatic account screening.
This section gives an overview of regulatory approaches and investigation methods which seem to be promising. Such persons can take various roles in the Bitcoin core system e. The first group consists of fundamental rights affected by nearly every regulatory approach in every cryptocurrency system e.
The second contains some fundamental rights which become relevant specifically in peer-to-peer-based cryptocurrencies like Bitcoin, for example, the freedom of association. The third group encompasses fundamental rights which do not—at first sight—have an obvious impact on governmental regulation and prosecution, like the freedom of speech or the freedom of information.
Authorities have to respect the fundamental rights of the persons affected and find the legitimate balance if multiple conflicting rights are concerned. Fundamental rights protect specific conducts of an individual against interference by the state. For example, the freedom of telecommunication Art. In order to invoke a particular fundamental right, the conduct in question has to be related to specific objects. If further information is required, there are specific articles addressing the technical perspective [ 2 , 4 , 30 , 31 ].
The Bitcoin system does not operate like traditional currency systems. In real-world currency systems, governments, 4 central banks, and private banking institutions function as central administrative and control units.
On the contrary, in the Bitcoin system volunteers i. A bitcoin is basically a track of transactions between several public keys in the blockchain [ 30 ]. A Bitcoin user exercises power over a public key by possessing the corresponding private key. Adding a data block which contains transactions of the users to the blockchain is called mining.
Bitcoin miners are users who provide their CPU power for the mining process [ 2 , 31 , 32 ]. Even if the blockchain is public, participants in the Bitcoin network remain if they choose to do so pseudonymous [ 4 ]. This is possible because every client can create an infinite number of unique and independent public keys [ 31 ]. Thus, no user has to identify himself to an administrative unit in contrast to opening a bank account.
Usually, only the holder of the private key knows to whom the associated public key is related. Besides through the aforementioned mining process, an individual can get bitcoins by changing real currency into bitcoins at specialized exchange markets also vice versa [ 8 ], Bitcoin ATMs not vice versa [ 33 ] and on Internet platforms like localbitcoins.
Due to technological features of cryptocurrencies, governments not only have to face obstacles but can also make use of opportunities when regulating them: on the one hand, regulation scenarios have to find a solution for the lack of central administrative parties.
Standard Know-Your-Customer KYC systems will not work if users do not have to identify themselves when opening an account [ 34 ]. On the other hand, the public transaction record enables new regulatory approaches. For example, in comparison to regaining stolen cash from circulation, it is possible to isolate and devalue bitcoins through transaction blacklisting [ 30 , 35 ]. The same applies to the profit of other illicit activities like drug-trafficking and blackmail [ 35 ].
The possibility to track every single bitcoin back to its origin provides for another opportunity for regulators: even if several bitcoins are stored in the same wallet of a user precisely, the private keys are stored in it or even if several bitcoins are related to the same public key, every bitcoin in the wallet or related to the public key is distinguishable owing to its traceable and unique history.
What governments and prosecutors have been doing for decades in terms of AML and financial crime investigations is difficult to apply and enforce in the context of Bitcoin and other cryptocurrencies [ 8 , 13 , 36 , 37 ]. Traditionally, AML concepts rely on KYC systems, due diligence, compliance systems and monitoring and reporting duties of banks and other financial service providers [ 7 , 13 , 31 , 38 ].
Depending on the scale of transactions, the domicile of the business partner and, especially in contractual relationships with politically exposed persons, financial service providers have to check the identity of their contractual partners, gather information regarding the purpose and the type of the business relationship sought, make a risk assessment and monitor the relationship continuously see FATF Recommendations No.
Hence, AML measures have to be directed towards the legal and natural persons who exchange cryptocurrencies for real currencies or goods, like exchange platforms and merchants p. Second, if criminals find persons or exchange platforms located outside the respective jurisdiction; see p.
Moreover, no suspicious-looking amounts of cash have to be physically smuggled over borders in order to exchange them abroad p. Nevertheless, several governments and transnational organizations are planning to install—or have already installed—KYC systems for exchange platforms and other types of users , like the BitLicense Law of the State of New York, section As a necessary preliminary stage to KYC and due diligence, governments started to place the permission to trade with and exchange cryptocurrencies under reservation of supervisory approval e.
Besides classic KYC systems and licensing, there are many conceivable regulation approaches in the context of cryptocurrencies [ 8 , 11 , 35 ]. The current technological design of the Bitcoin system offers many opportunities for regulators. First, authorities could restrict the access to cryptocurrencies. Besides a blanket ban p. Bitcoin clients, online wallets is a conceivable albeit hardly enforceable regulatory approach.
Second, public authorities could try to control or at least influence the mining process by either participate with governmental mining pools or by regulating the production of or the access to mining hardware. A notable example of such approaches is transaction blacklisting [ 34 , 35 ]. The goal of this concept is to blacklist transactions precise: transaction prefixes which were caused by criminal offenses like blackmail, fraud or money laundering.
The advantage of such an approach is that exchange platforms and merchants are tangible for law enforcement agencies because they operate in the real world [ 22 ]. Another benefit lies in the at least partial [ 22 , 35 ] devaluation of bitcoins from blacklisted transactions. This devaluation is caused by both an economic and a legal effect: Bitcoin users will not pay the same price for blacklisted bitcoins as for non-listed bitcoins because they cannot use listed bitcoins to pay for goods or exchange them [ 22 ].
If the transaction blacklist were public or at least users could request whether bitcoins offered originate from a listed transaction , users would be forced to check the list in order to avoid criminal prosecution for money laundering.
This makes criminal activities with the aim of gaining Bitcoins less attractive. Moreover, there are market mechanisms like risk assessment that could probably manage the problem of different values of different Bitcoins p. Despite the improvements that transaction blacklisting brings to the regulation of cryptocurrencies, this concept also has shortcomings. First of all, a blacklist maintained by public authorities cannot cover off-chain transactions; the public authorities would therefore be dependent on the cooperation of the service providers carrying out the off-chain transactions.
However, these could be forced to cooperate by corresponding laws and sanctions if necessary. Furthermore, the transaction blacklisting system would have to be implemented worldwide in order to develop its full effectiveness. Within the EU an agreement seems possible, but a solely European blacklist would possibly collide with the regulation of other states and confederations of states, for example, in cryptocurrency transactions between citizens of the EU and those of non-EU states.
In order to resolve these conflicts, appropriate international agreements would have to be concluded with these states. And finally, a functioning blacklisting system could be abused by authoritarian regimes to deprive political dissidents of a so far largely unrestricted possibility of financing.
This risk is inherent in any effective cross-border regulatory measure. A current example outside the world of cryptocurrencies is the misuse by authoritarian states of the instrument of the international arrest warrant to detain regime critics.
Other conceivable regulatory approaches p. They will not be discussed in detail here, because they are less effective compared to transaction blacklisting for several reasons. For example, every method that tackles accounts precise: public keys is easy to bypass by simply creating new accounts p. Traditionally, criminal investigators in the field of financial crimes or investigators in general when tracing the money trail rely on the search and seizure of bank documents and files, the questioning of bank employees as witnesses and the automatic screening of bank accounts.
Without central administration and the ability of every user to create an indefinite number of accounts by himself or herself, those investigation methods must fail. Although the number of KYC systems will rise with governmental regulation, investigators must find ways of identifying Bitcoin users who are not covered by KYC systems p.
To tackle this challenge, investigators can use the public blockchain data: every transaction can be traced back through the blockchain to the genesis of the transferred bitcoins. Investigators can use forensic software to process the blockchain data and combine it with datasets from other internal and external e. Internet data sources. In this way investigators are sometimes able to draw conclusions about the natural and legal persons involved [ 3 , 4 , 32 , 38 , 51 , 52 ]. Both ways can affect the needs and interests of several natural and legal persons in and around the Bitcoin system.
In the traditional currency and banking system, governments, central banks, private banks and other payment processors are the main actors. Governments create currencies and banks operate the system, subduing to governmental rules. Other natural and legal persons, like bank customers and merchants, are only allowed to participate among the required conditions. For example, every bank customer has to identify himself with an official document when opening a bank account.
In contrast thereto, every Bitcoin user can create bitcoins by providing computing power to the system.
How blockchain will help miners meet evolving ESG demands
Hong Kong CNN Business China has extended its iron-fisted crackdown on using and trading bitcoin to the industry that oversees the mining of new cryptocurrency tokens. China mines more bitcoin than anywhere else. More Videos Bitcoin plunges as China's crypto crackdown widens.
Bitcoin (BTC) mining profitability up until November 8, 2021
Bitcoin is a widely-spread payment instrument, but it is doubtful whether the proof-of-work PoW nature of the system is financially sustainable on the long term. To assess sustainability, we focus on the bitcoin miners as they play an important role in the proof-of-work consensus mechanism of bitcoin to create trust in the currency. Miners offer their services against a reward while recurring expenses. Our results show that bitcoin mining has become less profitable over time to the extent that profits seem to converge to zero. This is what economic theory predicts for a competitive market that has a single homogenous good. We analyze the actors involved in the bitcoin system as well as the value flows between these actors using the e 3 value methodology. The value flows are quantified using publicly available data about the bitcoin network. However, two important value flows for the miners, namely hardware investments and expenses for electricity power, are not available from public sources.
Why Quebec is betting big on Bitcoin
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Cryptocurrency
Try out PMC Labs and tell us what you think. Learn More. Since then, the hash calculations to mine Bitcoin have been getting more and more complex, and consequently the mining hardware evolved to adapt to this increasing difficulty. This work presents an agent-based artificial market model of the Bitcoin mining process and of the Bitcoin transactions. In particular, the computational experiments performed can reproduce the unit root property, the fat tail phenomenon and the volatility clustering of Bitcoin price series.
Cryptocurrency mining presents challenges, opportunities for oil and gas industry
But, as with most things Bitcoin, this interpretation is based more on hope than fact. Bitcoin has failed to live up to the hype that it would democratize finance by enabling cheap, instantaneous, and secure payments that could be conducted without having to rely on stodgy old financial institutions like banks and credit card companies. Bitcoin has failed to meet this vision due to its excessive price volatility, slow transaction processing, difficult user experience e. Some have even questioned whether bitcoin has any social value at all. Rather than being a viable currency at scale, Bitcoin is and will remain a speculative asset, in a class with gold, tulips, and Beanie Babies.
The Political Geography and Environmental Impacts of Cryptocurrency Mining
These are the core obsessions that drive our newsroom—defining topics of seismic importance to the global economy. Our emails are made to shine in your inbox, with something fresh every morning, afternoon, and weekend. Cryptocurrency is a notorious climate culprit.
Cryptocurrencies, 1 like bitcoin, raise new legal questions due to their innovative technological concepts. While academic research covers nearly all areas of the technological concepts of those currencies, legal studies focus only on a few topics. The papers that have been published so far discuss mainly economic law, tax law, and financial regulations. At the same time, governments are starting to explicitly regulate cryptocurrencies in terms of anti-money-laundering AML and to clarify or strengthen the legal basis for prosecuting crimes in the context of cryptocurrencies. Furthermore, criminal investigation in the context of cryptocurrencies is intensifying with the rising number of cryptocurrency-related crimes. Moreover, governments should also start to consider crime prevention in the context of cryptocurrencies.
Help us translate the latest version. Page last updated : January 26, This introductory paper was originally published in by Vitalik Buterin, the founder of Ethereum , before the project's launch in It's worth noting that Ethereum, like many community-driven, open-source software projects, has evolved since its initial inception. While several years old, we maintain this paper because it continues to serve as a useful reference and an accurate representation of Ethereum and its vision.
All the industry, if not the entire world is talking about crypto-mining, and the value of Bitcoins. One of the benefactors of this explosive commodity market bubble has been the suppliers of add-in boards AIBs and subsequently the purveyors of GPUs. Motherboard and power supply unit PSU suppliers have also benefited.
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