Mining bitcoins 2016
Bitcoin sank Monday on reports that China has intensified its crackdown on cryptocurrency mining. Many bitcoin mines in Sichuan were shuttered Sunday after authorities in the southwestern Chinese province ordered a halt to crypto mining, according to a report from the Communist Party-backed newspaper Global Times. Bloomberg and Reuters also reported on the move from Sichuan authorities. China had already banned financial institutions from providing crypto-related services. Instead, the blockchain is maintained by so-called miners who race to solve complex math puzzles using purpose-built computers to validate transactions. Whoever wins that race is rewarded with bitcoin.
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Либо искомый домен заблокирован по решению суда
Summer on Seneca Lake, the largest of the Finger Lakes in upstate New York, is usually a time of boating, fishing, swimming and wine tasting.
But for many residents of this bucolic region, there's a new activity this season — protesting a gas-fired power plant that they say is polluting the air and heating the lake.
They have increased the electrical power output at the gas-fired plant in the past year and a half and use much of the fossil-fuel energy not to keep the lights on in surrounding towns but for the energy-intensive "mining" of bitcoins. Bitcoin is a cryptocurrency — a digital form of money with no actual bills or coins. The computers earn small rewards of bitcoin by verifying transactions in the currency that occur on the internet around the world. The math required to verify the transactions and earn bitcoins gets more complex all the time and demands more and more computer power.
An estimate from the University of Cambridge says global bitcoin miners use more energy in a year than Chile. When the energy comes from fossil fuels, the process can add significantly to carbon emissions. The Greenidge plant houses at least 8, computers and is looking to install more, meaning it will have to burn even more natural gas to produce more energy.
Private equity firms like Atlas buy companies, often using debt, and hope to sell them later at a profit. They are secretive operations with investments that can be hard to track. As investor criticism prompts some public companies to dump fossil fuel assets, private equity firms are ready buyers. In a report last fall, the Environmental Assessment Office, a provincial agency, said the project failed to comply on 16 of 17 items inspected.
As a result, Coastal GasLink was ordered to hire an independent auditor to monitor its work to prevent site runoff that can pollute streams and harm fish. Because private equity firms expect to hold their investments for only a few years, they often keep alive fossil-fuel operations that would otherwise be mothballed, said Tyson Slocum, director of the energy program at Public Citizen, a nonprofit consumer advocacy group.
In , for instance, the private equity firm ArcLight Capital Partners of Boston bought into Limetree Bay, an oil refinery and storage facility in St. Croix in the U. Virgin Islands. The operation had gone bankrupt after a series of toxic spills, but it reopened in February. Just three months later, it was shuttered after it unleashed petroleum rain on nearby neighborhoods. A spokeswoman for ArcLight said the firm "takes its responsibilities to protect the environment and support local communities seriously and will continue to strive to meet the highest standards.
Because private equity firms are secretive, their investors may not know what they own or the risks, said Alyssa Giachino of the Private Equity Stakeholder Project, a nonprofit organization that examines the industry's impact on communities. She said pension funds and their beneficiaries may end up with more fossil fuel exposure than they realize and may not have a full appreciation of the risks.
They include heavy impacts on communities of color, risks of litigation and environmental penalties and long-term climate effects, she said. KKR is a huge energy investor on behalf of endowments, public pensions and other institutional investors. Like many of its private equity brethren, KKR has deployed far more money in conventional energy assets like the Coastal GasLink Pipeline than in renewables.
KKR didn't dispute those figures in emails. KKR's spokeswoman said the firm is "committed to investing in a stable energy transition, one that supports a shift to a clean energy future while recognizing the ongoing importance of supplying the conventional energy needed for well-being and economic growth around the world today.
KKR recently added a team focused on energy transition investments in North America. Private equity investors sometimes "leave behind messes for someone else to clean up," said Clark Williams-Derry, energy analyst at the Institute for Energy Economics and Financial Analysis. The lakeshore facility is operating within its federal and state environmental permits, he said, and it has created 31 jobs, a company-commissioned report shows.
Williams-Derry said cryptocurrency's potential profits add to the appeal of buying low-cost and carbon-intensive power plants.
While natural gas-fired plants like Greenidge's in New York aren't as problematic as those that use coal, they still generate damaging greenhouse gases, he said.
Kirt said that after Greenidge took over the plant, it sought ways to earn higher returns on its surplus energy. It struck gold with bitcoin mining. During the 12 months that ended Feb. Greenidge's owner, the private equity firm Atlas, is on a roll. Atlas bought the acre coal-fired Greenidge plant in , three years after it had closed.
Converted to natural gas, the almost year-old plant began operations in , generating energy to the grid only at times of high demand. In , Greenidge began using the plant to power bitcoin mining and increased its output. It still supplies surplus power to the local electrical grid, but a lot of the power it generates is now used for bitcoin mining.
And it has plans for expansion at Greenidge and elsewhere, company documents show. Last week, Greenidge announced a new bitcoin mining operation at a retired printing plant Atlas owns in Spartanburg, South Carolina. In March, Greenidge said its Bitcoin mining capacity of 19 megawatts should reach 45 megawatts by December and may ramp to megawatts by as it replicates its model elsewhere.
Larger gas-fired plants in the U. Also in March, Greenidge announced a merger with Support. The deal, which is expected to close in the third quarter of this year, will give Atlas control of the merged company and access to public investor money. Andrew Bursky, founder of Atlas, owns half to three-quarters of Atlas, a regulatory filing shows.
Neither Atlas nor Bursky would comment for this article. Greenidge, which disputes that view, said last month that its operations would soon be carbon neutral. It is buying credits that offset the plant's emissions from an array of U. Judith Enck, a former regional administrator for the Environmental Protection Agency who is a senior fellow and visiting faculty member at Bennington College in Vermont, has doubts.
So far, legal challenges to the Greenidge operation have failed. Materials issued by Greenidge say state environmental authorities have determined that the plant "does not have a significant impact on the environment. Still, emissions from the plant are rocketing. At the end of last year, even though it was operating at only 13 percent capacity, the plant's carbon dioxide equivalent emissions totaled , tons, up from 28, tons in January, according to regulatory documents Earth Justice received under an open records request.
Before it began mining bitcoins, the plant generated carbon emissions of , tons in and 39, tons in , federal documents show. On June 5, residents staged a protest against the plant at a nearby Department of Environmental Conservation office in Avon. If regulators don't rein in the Greenidge plant, they say, 30 other power plants in New York could be converted to bitcoin mining, imperiling the state's emission-reduction goals. As the greenhouse gas emissions associated with this type of facility may be precedential and have broader implications beyond New York's borders, DEC will consult with the U.
Water usage by Greenidge is another problem, residents said. The current permit allows Greenidge to take in million gallons of water and discharge million gallons daily, at temperatures as high as degrees Fahrenheit in the summer and 86 degrees in winter, documents show. Rising water temperatures can stress fish and promote toxic algae blooms, the EPA says.
A full thermal study hasn't been produced and won't be until , but residents protesting the plant say the lake is warmer with Greenidge operating. Greenidge recently published average discharged water temperatures from March 1 to April 17, during the trout spawning season; they were around 46 degrees to 54 degrees, with differences between inflow and outflow of 5 degrees to 7.
From June 7 to July 6, Greenidge said, water temperatures recorded at a buoy about 10 miles north of the Greenidge plant and at a depty of three-and-a-half feet have averaged The low of 61 degrees occurred on June 7 and the high of 73 was recorded on July 1.
Over longer periods, temperatures have spiked, however. NBC News reviewed a February email from the DEC to a resident stating that since , the plant's daily maximum discharge temperatures have been 98 degrees in the summer and 70 degrees in winter. The Greenidge spokesperson said, "The limits already protect the lake's fishery and the public health, and they have been clearly validated as not concerning.
Not everyone wants Greenidge gone. Gwen Chamberlain, a former local newspaper editor, is one of three members of a community advisory board working with Greenidge to advance the region's economy. Peter Mantius, a former journalist who writes about environmental politics in the region , said the payments, while greater than zero, are far less than what the plant once generated, thanks to a favorable tax assessment arrangement.
Meanwhile, residents like Buddington feel compelled to keep fighting. IE 11 is not supported. For an optimal experience visit our site on another browser. NBC News Logo. News World Opinion Business Newsletter sign-up. Search Search. Follow NBC News. Link copied. By Gretchen Morgenson.
Power plant repurposed to mine bitcoins July 4, Inside one of the country's largest cryptocurrency mines Part 1 July 5, Inside one of the country's largest cryptocurrency mines Part 2 July 5, Gretchen Morgenson.
Here’s what could happen after Bitcoin runs out of supply
Bitcoin relies on the participation of people and organisations to act as the "bankers" of the system. Called Bitcoin miners , they effectively record each transaction on a ledger called the Blockchain and in return, they are awarded with bitcoins. In order to increase their chances, Bitcoin miners have large numbers of computers with specialised hardware that consume significant amounts of electricity. The entire Bitcoin system has been estimated to use about Megawatts of electricity which is the same demand as , US homes. For miners, electricity usage is the majority of the cost of producing bitcoins and this is why China, with its relatively low energy costs, has become the country of choice for this type of operation. The economics of Bitcoin mining only make sense if the price of Bitcoin is maintained.
On the instability of Bitcoin without the block reward
The last difficulty adjustment, made on Aug. The last two increases came after the difficulty plummeted to the lowest difficult level in about 18 months. The difficulty level undergoes an adjustment every 2, blocks, which usually takes about two weeks, and would be affected by the changes in mining hashrate. The more difficult to mine Bitcoin, the less profitable for miners. When the hashrate increases, the mining difficulty typically follows. That said, the expected mining difficulty increase could be largely due to a recovering hashrate. The total Bitcoin hashrate has been steadily recovering since July 3, as suggested by data from Blockchain. The total hashrate had been nose-diving from mid-May, plunging from The hashrate moves are considered largely due to the acceleration of mining operations out of China.
Australia to sell £8m of seized bitcoins
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Bitcoin just experienced a major milestone in its short little lifespan. When the code for Bitcoin was written, it was designed to be a currency with no more than 21 million bitcoins ever in circulation. And to encourage people to mine which is what validates and supports the entire bitcoin network , Satoshi created a reward that went along with each block. When Bitcoin was first created, the reward was set at 50 bitcoins per block mined. And, the code specified that every , blocks mined that reward would be cut in half, until it eventually is reduced to zero after 64 halving events. So, today was the second ever halving in the history of Bitcoin.
Mining incentives, part 2: Why is China dominant in Bitcoin mining?
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The new rules are not specifically targeted at crypto: They are intended to rein in all energy intensive industries Inner Mongolia was the only province to fail a central government review of energy consumption last year. Aside from crypto mining, they will also limit PVC, steel, coke, and methanol production. And miners need a lot of electricity: The bitcoin economy uses more electricity annually than the whole of Argentina, according to analysis by researchers at Cambridge University.
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.
The facility is emblematic of our broader impact on not only increasing supplies of gas, but also driving economic growth, developing the Saudi workforce, and reducing emissions. Designed to process up to 2. The plant was designed from inception to use the Tail Gas Treatment process to reach the maximum sulfur recovery rate of We are expanding the gas processing capacity of our Hawiyah gas plant by more than 1 billion scfd. The new gas processing facilities, expected to be on stream in , are anticipated to raise total production capacity of the plant to approximately 3.
After every blocks, the Bitcoin network adjusts its difficulty based on the current block production rate. As the value of this indicator rises, miners are able to produce blocks at a faster rate than the crypto is programmed for. The network then increases the difficulty to counteract this rise in the hashrate. On the other hand, if the metric decreases in value, the production rate becomes slower than needed, and the difficulty is then automatically also lowered.