In the past, one of Bitcoin’s biggest problem was, that it used energy from power plants, that were harmful to our enviroment. But is that still true today? Is Bitcoin still poluting our environment? Some scientists think that it might not be the case anymore.
Bitcoin (and other crypto-currencies for that matter) also helps in the fight against dictatorships, as shown in some of the world’s countires.
Some experts also say that Bitcoin’s value are bound to reach new, great hights. They even suggest that it might go above ten million dollars for a single coin.
Japan also began to try CBDC and other possible fixes in response to the FTX case.
Bitcoin mining is getting greener
Bitcoin can even be mined on your phone, but just how green is it? Investor Daniel Batten wrote an interesting article for Bitcoinmagazine, describing how he concluded that almost 53% of the energy bitcoin mining uses is from renewable sources. He also says that the commonly creditec CCAF study, “A Deep Dive Into Bitcoin’s Environmental Impact”, is flawed in some ways. The competing research by the Bitcoin Mining Council (BMC) which indicates that Bitcoin uses 58.9% sustainable energy, might be closer to the real numbers.
The article describes all of the CCAF study in detail, but in short, it was concluded that it hasn’t taken into account several crucial factors, that might change the final result:
- off-grid mining (impact: plus 10.8%)
- gas flaring (impact: plus one per cent)
- non-current geographical distribution of hashrate (plus 1.8%)
If all of these numbers are correct, Batten’s 53% might actually also be incorrect, but in a far lesser manner. If we took the BMC study at its face value, the portion of Bitcon’s sustainable energy sources should be closer to 59%
Batten himself confirmed, that his numbers might not be entirely correct. But he also said that, if his results are invalid, at least one of the following theories would have to be true:
- four large bitcoin mining pools are secretly using 100% coal power
- ERCOT (the electricity grid operator in Texas) has overstated its actual renewable energy figures by a factor of four
- despite the widely reported departure of miners from Kazakhstan, its share of bitcoin mining has actually increased from 13.2% to 20% of global hashrate
“I find it very far-fetched that any of these theories are real.” Batten concludes his research.
If you are looking into crypto and all currencies digital, you might be interested in this article about NFTs
Japan to test CBDC and allow stablecoins
Japan has shown a distaint towards foreign cryptocurrencies and stablecoins. Ones such as Tethe
Japan, where foreign stablecoins such as Tether (USDT) are banned, plans to launch a pilot project for a state-owned digital currency in just two months. The aim is to involve private enterprises and test the CBDC ecosystem model. This might be one of the best moves in the journey to connect japanese market with the rest of the world.
The pilot testing will continue the work on the technical feasibility of the digital yen that began in 2021 and will expand the experiment to model the CBDC ecosystem with the participation of private companies. According to authorities, no actual retail transactions will be conducted during the pilot.
Meanwhile, the Japanese authorities are also considering lifting the ban on foreign stablecoins that came into effect in 2022. According to Japan’s Financial Services Agency, the changes are expected to be enacted by June 2023. While they will not automatically allow any foreign stablecoin into the market, the green light will be given to those coins that pass the various checks.
If this pilot study turns out to be positive to japanese economy and Japan decides to lift the ban on foreign crypto, it is hart to imagine what could happen next. Japan is the 3rd highest in GDP values and close 4th in purchasing power parity. If this economic giant decides to connect itself with the rest of the world, it may be one of the greatest things to happen in a long time.
Bitcoin helps democracy and fights corruption
In an interview with Cointelegraph, Alex Gladstein, director of strategy at the Human Rights Foundation, describes how bitcoin helps freedom of expression and how it in turn curbs the power of tyrannical governments.
Gladstein has worked at the non-profit since 2007, when bitcoin did not exist. The foundation focuses on promoting and protecting human rights around the world – especially in countries where their people live under authoritarian rule.
“Where democracies have collapsed, it’s very clearly related to fiat currency, and I think bitcoin in a way corrects that,” he said.
Gladstein said during the interview that bitcoin represents free speech, property rights and open capital markets, all things that constrain tyrannical governments that often need censorship, confiscation and closed capital markets.
Are there any examples?
Using Russia and China as examples, he shows how bitcoin complicates life for their governments: ‘This is what China and Russia need to survive, they need censorship, they need closed capital markets, and they need confiscation. Bitcoin really makes it difficult for governments to impose these things on their people.”
Both Russia and China have long been hostile to cryptocurrencies. The Chinese government banned virtually all crypto transactions in 2021. Russia’s cryptocurrency law, in turn, officially banned the use of cryptocurrencies for payment purposes in 2020.
It is true, that cryptocurrencies are, by their nature, hard to get rid of. You can’t really confiscate/censor something that exists outside the borders of your country and you have no real control over. it is to censor the means by which these currencies are obtained. This is visible in other dictatorship countries, for example Iran, or North Korea, where the nations governing power blocked it’s people from even accesing crypto in the first place.
“I don’t see these dictatorial powers doing well in the bitcoin standard; I think it’s going to get really hard for them,” Gladstein said. Only future will show if his words are true. And if what he says is true, then
But even if you aren’t a dictator yourself, you should still look how to reduce investment risk.
Latest lawsuit puts FTX investors in the role of accomplices
But Russia and China aren’t the only things on thin ice when it comes to the world of internet and cryptocurrency market. Several funds, that invested hundreds of millions into now bankrupt cryptocurrency exchange platform FTX, are filling lawsuits against it, calling themselves the victims. But things might not be so black and white, as they may first seem.
There are lawsuits flying around FTX on all sides and it can be easy to go from being a victim to being an accomplice. That is exactly what has now happened to investment funds Sequoia Capital Operations, Thoma Bravo and Paradigm Operations, which have sunk $550 million into FTX. All of these funds, meanwhile, are among the creditors in FTX’s Chapter 11 bankruptcy, but according to the latest class action, they were not victims of FTX’s alleged fraud, but accomplices.
According to the lawsuit filed by a former FTX customer, the three funds participated in FTX’s fraudulent scheme and funded a PR campaign to lure customers to cryptocurrencies so they could increase the value of their own early investments in Sam Bankman-Fried’s companies.
Had it not been for the credibility lent by these established investors, who hailed FTX and Bankman-Fried as the trusted exception in an industry rife with fraud, FTX’s valuation would not have skyrocketed from approximately $1.2 billion to $32 billion, the complaint alleges.
What is the lawsuit about?
The class action lawsuit, filed in federal court in San Francisco, accuses the funds of violating the securities, trade practices and advertising laws of the state of California and of engaging in a conspiracy to induce cryptocurrency customers to open accounts with FTX.
Even if we leave out all of the current controversies, one things for sure – we won’t get bored by FTX this year. Be it the alleged sellings of unregistered securities, investigated by Texas federal laws, or the steping down of its president, who has to this day not replaced, there is still a lot in thid rabbit hole to uncover.
Regarding the previous part about Japan, it should also be mentioned that FTX Japan – FTX’s japanes branch – continues to withdraw from most of its exchanges.
One bitcoin for ten million dollars?
On February 16, Bitcoin expert Jesse Myers released a blog post, in which he presents his “outrageous” take on the future of Bitcoin’s price. He claims that the most famous cryptocurrency on the market is expected to become not just twice, or even 10 time, but 500 times more expensive than it currently is in the next decades.
In the post, he argues that bitcoin’s ability to appreciate in value over time means it is destined to suck value out of other asset classes. Among other things, because an asset with such appreciation characteristics and increasing scarcity allows it to fulfill the role of “digital gold.”
In the language of numbers, Myers calculates the global allocation to BTC as 0.05% of available wealth in 2023, which is $400 billion. “That’s 1/2000th of the global asset value, and in light of that fact, we have to ask an important question: If bitcoin continues to operate as it has, causing its value to continue to grow reliably every four years, will more than 0.05% of the world’s capital eventually realize that it wants to be in such an asset? I think the only logical conclusion is ‘yes’.”
If that realisation does occur, Myers said, it would mean that ten million dollars per bitcoin is a “conservative estimate”.