Bitcoin mining algorithm details west
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Content:
- The weekend read: Crypto’s energy conundrum
- Quantum Blockchain completes key stage in developing new Bitcoin mining technology
- What the H#ll is Bitcoin? Fool's Gold or the Real Thing?
- The brutal truth about Bitcoin
- The Future of Blockchain Mining – POW or POS?
- Countries that mine the most Bitcoin (BTC) 2019-2021
The weekend read: Crypto’s energy conundrum
Bitcoin is on the verge of going mainstream, with some companies — and even countries — recognizing the cryptocurrency as legal tender. The market cap of Bitcoin now surpasses both Facebook and Tesla , and it also recently became the 13th largest currency in the world.
In the real world, however, the surging investment in virtual currency is inflicting real world impacts — perhaps nowhere more acutely than Pennsylvania. As Bitcoin mining operations scour the globe for readily available electricity, previously dead or dying fossil fuel plants are being resuscitated and repurposed to power single-purpose supercomputers.
The result is a tremendous amount of unnecessary carbon pollution. Rather than relying on a bank or other centralized institution to mediate financial transactions, Bitcoin and other cryptocurrencies promise to cut out the middleman. Ensuring the validity of those blocks is a decentralized process. Finding the correct hash essentially amounts to solving enormously complicated math problems, and therefore requires tremendous computer processing power.
In essence, the institutional middleman that provides legitimacy to currency transactions is replaced by complex computer work. The work is decentralized — anyone can do it who has the computers — but those computers require a lot of electricity. To incentivize Bitcoin users to lend their computing power to this decentralized, intensive verification system, they are rewarded with newly-created Bitcoin for each successful verification. Currently, the reward for successfully validating a block of transactions is 6.
Performing the verification service requires a spectacular amount of energy — both to run large numbers of specialized supercomputers and then to keep those large numbers of specialized supercomputers from overheating. Worse, because the Proof of Work algorithm increases the complexity of the math problem for each subsequent block of transactions, the electricity consumption for each newly minted Bitcoin necessarily increases as well.
Electricity consumption from bitcoin will inevitably grow over time. After all, Bitcoin is not a small, developing nation with diverse needs for electricity spread across millions of people. In other words, the industry is consuming huge amount of energy to make a tiny number of participants extremely wealthy.
Given their insatiable thirst for energy, it comes as no surprise that Bitcoin miners are constantly searching for cheap, reliable electricity.
Abundant and affordable hydropower in the Columbia River Basin — itself the result of massive public investment over the past 75 years — attracted a surge in Bitcoin mining operations in the Pacific Northwest, primarily in Chelan, Douglas, and Grant Counties in central Washington State.
In response to this risky concentration of energy consumption in one highly transient industry, public utilities in the Mid-Columbia Basin counties instituted thresholds that trigger adjusted rate schedules for cryptocurrency mining operations.
These policies appear to have stabilized cryptocurrency mining operations in the area, effectively putting a cap on the percentage of the electricity supply that cryptocurrency mining may consume. Different dynamics are playing out in different places as bitcoin miners move operations in search of the cheapest electricity they can find in large quantities. In some cases that mean buying power from cheap-to-operate hydropower dams, while in other places it may mean buying entire coal waste-burning plants to cash in on government subsidies.
But in all places, local regulation plays a key role in the siting of Bitcoin mining. While some headed across the border to neighboring Kazakhstan and Russia, most flocked to areas of the United States with more relaxed regulatory environments. Texas, in particular, has seen an influx in Bitcoin mining activity. More recently, some Bitcoin mining operations are turning towards full vertical integration in order to control costs and ensure access to a steady supply of cheap electricity.
In theory, Bitcoin miners could build or buy solar or wind energy facilities to power their operations. But miners hunting for quick sales at bargain basement prices are often turning to stranded fossil fuel assets. When that agreement expired in , however, the plant struggled in a competitive power market, in part because of the emergence of abundant cheap natural gas. By , Scrubgrass was likely destined for closure— until it pivoted to Bitcoin. Burning all that coal generates , tons of carbon pollution annually, equivalent to 80, cars.
It can also be dangerous: one Scrubgrass employee fell to his death in while attempting to clean up material that had spilled off a conveyor belt. Scrubgrass is just the start. Stronghold has executed a purchase agreement to acquire a second waste coal plant in Pennsylvania, the Panther Creek Energy Facility, and aspires to buy a third.
Like Scrubgrass, Panther Creek was increasingly unable to compete on the open electricity market— operating at less than one tenth of its capacity prior to its acquisition by Stronghold. A similar story is playing out in other regions across the country.
A formerly mothballed coal plant in the Finger Lakes region of upstate New York was converted to run on natural gas and reopened to power a large-scale Bitcoin mining operation.
Big Rivers owns and operates four coal-fired power plants, though two are currently idled. And in West Virginia, the Grant Town power plant recently announced plans to continue burning coal waste, most of which is supplied by a company owned by Senator Joe Manchin. Even in instances where Bitcoin mining is capitalizing on still-operating energy facilities, the net result is hardly climate positive. Large, existing fossil fuel entities — including giants like Saudi Aramco, Gazprom, and ExxonMobil — are moving into this space too, harnessing what was previously a byproduct to capture more wealth in the form of Bitcoin.
Pennsylvania has become something of a hub for dead and dying coal plants to revive as engines for Bitcoin mining. Rob Altenburg, Senior Director for Energy and Climate at PennFuture, outlines four major subsidies — all borne by Pennsylvania taxpayers — that enable Bitcoin mining to be a uniquely profitable enterprise in the state. The first is capacity overprocurement , in which the regional power distribution utility PJM pays in advance for more electricity than it actually anticipates needing in order to account for outages and other uncertainties.
Traditionally, utilities are extremely conservative in both their forecasts and reserve margins: they expect electricity demand to be far higher than it ends up being, and on top of that, advance auctions commit utilities to far more reserve capacity than they need. In practice, this works as a giveaway to old, inefficient fossil fuel plants that might otherwise shut down, expanding the margin at which it is profitable to continue operating.
Coal is notoriously dirty, but waste coal is even worse. As it happens, Pennsylvania has an unusual amount of coal refuse lying around. In actuality, the practice just transforms a problem for land and water pollution to a problem for air and climate pollution. The AEPS credits are a major reason why Pennsylvania is home to a lot more coal waste-burning plants than other states.
But there are other handouts to and carve-outs for waste coal, showcasing just how desperate legislators and regulators are to turn this highly visible pollution problem into an invisible one. Pennsylvania already offers a Coal Refuse Reclamation CRR tax credit, rewarding plants for each ton of waste coal burned.
At the same time, the state has reserved almost 13 million allowances for waste coal facilities subject to the Regional Greenhouse Gas Initiative RGGI — enough to allow waste coal plants to double their pollution for free. At the state and regional level, untangling the crypto mess would take a concerted effort by policymakers. Fixing the capacity overprocurement problem would constrain the profit margins for failing fossil fuel plants, and doing so would put money in the pockets of local residents.
Almost by accident, PJM recently managed to save ratepayers billions of dollars when legal delays allowed for better demand forecasts. And when it comes to managing the problem of waste coal piles, the public would be better served by pursuing proper disposal and remediation efforts.
New federal spending on mine reclamation included in the recent infrastructure bill may help remediate some of these sites. At the same time, regulators could more stringently apply air pollution controls to operating plants, and it would be better to simply stop burning coal waste altogether. To address the Bitcoin dynamic in particular, Pennsylvania legislators could join their counterparts in New York in considering a prohibition on the use of fossil fuels to mine for Bitcoin.
Though as the example of the Columbia River Basin shows, even mining Bitcoin with renewable energy can be problematic. Where mining operations are not vertically integrated with power plants, revised rate schedules could help limit the risk of overallocating electricity at the expense of other ratepayers though this may not be a major risk in the PJM market where power generating costs tend to be relatively high.
More broadly, policymakers could look to strategies to push cryptocurrencies away from Proof of Work entirely, such as novel concepts like Proof of Stake.
Some cryptocurrencies, such as Ethereum , are working to shift towards less energy intensive mechanisms to verify transactions and maintain their blockchains, though making that shift proving more difficult than anticipated.
In a way, the crypto mining problem in Pennsylvania is a modern twist on an age-old story: get-rich-quick schemes always have a catch. What remains to be seen is whether policymakers will intervene or whether Pennsylvania residents will be the ones left holding the bag. Cryptocurrency gold rush looks to be costly and hazardous for Pennsylvania residents.
Electricity consumption acts as a sort of gold standard for cryptocurrency Rather than relying on a bank or other centralized institution to mediate financial transactions, Bitcoin and other cryptocurrencies promise to cut out the middleman.
Bitcoin raises the dead Given their insatiable thirst for energy, it comes as no surprise that Bitcoin miners are constantly searching for cheap, reliable electricity. Profits for miners, pollution for Pennsylvania Pennsylvania has become something of a hub for dead and dying coal plants to revive as engines for Bitcoin mining.
Eric de Place.
Quantum Blockchain completes key stage in developing new Bitcoin mining technology
This op-ed was originally published by The New York Times. Bitcoin, the original cryptocurrency, has been on a wild ride since its creation in Then it fell to half that value in just a few weeks. Are cryptocurrencies the wave of the future and should you be using and investing in them? Bitcoin was created by a person or group that remains unidentified to this day as a way to conduct transactions without the intervention of a trusted third party, such as a central bank or financial institution. Its emergence amid the global financial crisis, which shook trust in banks and even governments, was perfectly timed.
What the H#ll is Bitcoin? Fool's Gold or the Real Thing?
Vancouver, British Columbia-- Newsfile Corp. The mining machines were sourced through Neptune's growing network of global blockchain partners providing Neptune with the highest performing mining hardware available. As always, Neptune will continue to work with partners and suppliers that focus on renewable power aligning with Neptune's green Bitcoin initiative while providing competitive pricing. We continue to source the best machines at competitive pricing with our strong industry relationships and we are focused on scaling our Bitcoin mining operations rapidly while keeping power costs as low as industry standards allow," stated Cale Moodie, Neptune CEO. Today's announcement is part of Neptune's continuing strategy to grow our Bitcoin mining operations. Neptune intends to continue using operational profits to make investments in mining, staking, nodes, and other cryptocurrency projects. Given the recent events in Alberta arising between Link Global and the Alberta Utilities Commission, Neptune feels it is prudent to pursue other avenues of expansion and will be currently focusing on its American partners to expand renewable focused mining operations with all new S19 Pro Bitcoin miners. Pure Digital Power will remain undeveloped at this time given the US expansion efforts are looking substantially more profitable.
The brutal truth about Bitcoin
Bitcoin is on the verge of going mainstream, with some companies — and even countries — recognizing the cryptocurrency as legal tender. The market cap of Bitcoin now surpasses both Facebook and Tesla , and it also recently became the 13th largest currency in the world. In the real world, however, the surging investment in virtual currency is inflicting real world impacts — perhaps nowhere more acutely than Pennsylvania. As Bitcoin mining operations scour the globe for readily available electricity, previously dead or dying fossil fuel plants are being resuscitated and repurposed to power single-purpose supercomputers.
The Future of Blockchain Mining – POW or POS?
Chia was incorporated in August of to develop an improved blockchain and smart transaction platform. We are building the Chia Network to improve the global financial and payments systems. Chia is the first enterprise-grade digital money. Chia is using the first new Nakamoto consensus algorithm since Bitcoin. Reference smart transactions currently available are: atomic swaps, authorized payees, recoverable wallets, multisig wallets, and rate-limited wallets. You should first read the repository FAQ , check out the wealth of information on the repository wiki and join us on Keybase in the testnet or beginner channels.
Countries that mine the most Bitcoin (BTC) 2019-2021
Bitcoin mining produces electronic waste e-waste annually comparable to the small IT equipment waste of a place like the Netherlands, research shows. Miners of the cryptocurrency each year produce 30, tonnes of e-waste, Alex de Vries and Christian Stoll estimate. That averages g 9. By comparison, an iPhone 13 weighs g 6. Miners earn money by creating new Bitcoins, but the computing used consumes large amounts of energy.
While not a magic bullet, bitcoin mining has strong potential in both demand response and exploiting stranded capacity in electricity generation. But there are opportunities for it to support the energy transition. We have identified two key short-term opportunities for bitcoin mining in the US: first, as a highly predictable and scalable demand response asset; and second, to provide additional demand for cheap, under-utilised electricity generated by independent power producers and utilities.
The latest data from the Global Energy Institute shows the average price of electricity is lowest in states including Texas and Washington, which certainly jibes with the fact that both states are increasingly hot destinations for minting new digital coins. While the cost of power isn't everything when deciding where to set up shop, it sure goes a long way. Miners at scale compete in a low-margin industry, where their only variable cost typically is energy, so they are incentivized to migrate to the world's cheapest sources of power. In California and Connecticut you will pay anywhere from 18 to 19 cents per kilowatt hour, whereas in Texas, Wyoming, Washington, and Kentucky, you will pay less than half that, according to the Global Energy Institute, which puts out an annual electricity price map of the country, using the most recent full year of data available from the U. Energy Information Administration. The institute does warn , however, that "while the energy mix available within a state will play a large role in state electricity prices, energy-limiting policies in some states act to artificially elevate prices, making the price of electricity much higher for consumers and businesses.
In a financial world of stocks, bonds, foreign exchange, and credit cards, trillions of dollars are traded daily, with money flows handled by a bevy of databanks. In the world of cryptocurrency, billions of dollars worth of Bitcoin are traded through as many as , transactions per day, consuming the energy supply of a modernized country. Tristan Rayner explores. The cryptocurrency Bitcoin is close to using around 0. Energy Information Administration, with Bitcoin is not alone in the world of cryptocurrency.
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