Značka: mining

Russian central bank exec is OK with crypto mining under one condition

Kirill Pronin, head of Russian Central Bank (CBR)’s Department of financial technologies, acknowledged the possibility of crypto mining legalization under certain conditions. A public acknowledgment like this makes a rare case, as the CBR continues to lead the battle against the efforts to legalize crypto in the country. The executive expressed his views on mining at the Saint-Petersburg International Legal Forum on Wednesday, June 29. During the session, dedicated to cryptocurrencies, Pronin revealed, that CBR doesn’t take the same kind of hardline position on mining, as in the case with the general crypto legalization:”Despite the fact that we are speaking up consistently for the prohibition of cryptocurrencies’ turnover […] the discussion regarding mining’ legalization is possible.”However, Pronin named several conditions, which, according to him, make this discussion possible. He insisted that the mined assets should be sold strictly abroad and in exchange for fiat money:”Ultimately, we must say that there should be an export of these mining services, and the mining business shouldn’t lead to accumulation of cryptocurrency in the country, so there won’t be a motivation for a further usage in the internal payments.”In a kind of personal reenactment of the ongoing battle for crypto between the CBR and the Ministry of Finance, the latter’s head of the Department of financial policy Ivan Chebeskov vocally disagreed with Pronin and reminded him that there are notable challenges for Russian miners to sell their crypto abroad these days. Related: Russian government fails to forge a consolidated stance on crypto regulationResponding to that, Pronin stated that there are no problems with accumulating the mined wealth on the public blockchains and selling it with their help. In May 2022 the fresh draft of the law “On mining in the Russian Federation” appeared in the database of the lower chamber of the Russian parliament. The latest version spares the mining operators from the obligation to register in a special registry, and sweeps away the earlier proposed one-year tax amnesty.

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Switzerland-based crypto mining firm expands operations to Texas

White Rock Management, a cryptocurrency mining company based in Switzerland, said it will be expanding its operations to the United States, starting with Texas.In a Tuesday announcement, White Rock said it will be partnering with Natural Gas Onsite Neutralization, or NGON, a company that captures natural gas that would otherwise be burned and converts it to energy for use in the firm’s Bitcoin (BTC) mining operations. White Rock said it will be operating out of NGON’s facility in the Brazos Valley region, mining BTC using “environmentally responsible” methods.According to White Rock CEO Andy Long, the move into Texas was just the first in the firm’s plans to expand its BTC mining operations to areas capable of providing energy from natural gas outside the scope of the state’s power grid. The company began mining crypto at data centers in Sweden in November 2021 and reported its operations in the United States will have an initial capacity of 3 megawatts, aiming for the firm’s total hashrate to be more than 1.6 EH/s.Crypto mining firm White Rock Management’s operations in Texas. Source: White RockThe recent market downturn — the price of Bitcoin has fallen more than 28% in the last 30 days — may be impacting crypto miners’ profits. Cointelegraph reported on June 10 that the “raw” costs for miners in North America were roughly $22,000 per Bitcoin, with additional costs potentially bringing the total to more than $30,000. Many mining firms in the region including Bitfarms have reported selling some of their BTC holdings amid the bear market.So What if the Revenue From Bitcoin Mining is Low?”Bitcoin miners are experiencing record-low Revenue. Miners earn Revenue from two sources..”by @CryptoAlliance_ Read Morehttps://t.co/jiIQVzrnpB— CryptoQuant.com (@cryptoquant_com) June 27, 2022Related: Bitcoin miners sold their entire May harvest: ReportIt’s unclear how the recent volatility may affect White Rock’s operations in the Lone Star State. Prior to the market downturn, Argo Blockchain said it was planning to launch operations in Texas’ Dickens County almost a year after first breaking ground — the 200-megawatt data center started mining in May. In April, the City of Fort Worth also launched a pilot program to mine BTC using three rigs in its city hall building.

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Bitcoin’s bottom might not be in, but miners say it ‘has always made gains over any 4-year period’

Your favorite trader is saying Bitcoin (BTC) bottomed. At the same time, the top on-chain indicators and analysts are citing the current price range as a “generational buy” opportunity. Meanwhile, various crypto and finance media recently reported that Bitcoin miners sending a mass of coins to exchanges are a sign that $17,600 was the capitulation move that pins the market bottom. There’s so much assurity from various anon and doxed analysts on Crypto Twitter, yet Bitcoin price is still in a clear downtrend, and the metrics don’t fully reflect that traders are buying every dip. A critical component of BTC price that many investors often overlook is the condition and sentiment of Bitcoin miners, which is exactly why Cointelegraph had a chat with Rich Ferolo of Blockware Solutions and Will Szamosszegi of Sazmining Inc. to gain clarity on what’s happening in the mining industry and how this might impact market sentiment going forward. Cointelegraph: Is the bottom in for Bitcoin? The price touched $17,600 nearly two weeks ago and it’s starting to feel like the fund-driven capitulation armageddon might be over. Thoughts? Will Szamosszegi: It’s impossible to say whether or not Bitcoin has hit a bottom. In general, I recommend a dollar-cost-averaging strategy to people: Just buy however much Bitcoin you feel comfortable with on a consistent schedule. We’ve seen drawdowns even bigger than this before — such as 93.7% in its early days and 83.4% in 2018. Bitcoin has always made gains over any four-year period in its history.CT: Currently, Bitcoin is trading below the realized price and below miners’ cost of production. The price also dipped below the previous all-time high and the hash rate is dropping. Typically on-chain analysts pinpoint these metrics hitting extreme lows as a generational purchasing opportunity, but is it? Rich Ferolo: Blockware has done a lot of research on this and we’ve calculated the breakeven price from machines as far back as the s9 from 2016, at $.07 per kilowatt, the breakeven is $38,000 for a s9. You’re going to see older machines coming off the network eventually. For the s17s, at $.07 cents per kilowatt, BTC needs to be at around $18,000. Newish machines are more efficient and while difficulty and the hash rate adjustment are trending down for current generation machines, anything above 90 terahashes (TH/s) can make it. Anything below 34 watts per Terahash is inefficient. One factor to consider is that the value of machines is going down. Even if BTC price starts to go up and there’s a symbiotic relationship between price and the macro factors impacting Bitcoin price and prices throughout the wider-crypto market.Machines are hard assets and the big aspect of mining is the machine. Bitmain and MicroBT adjust prices as BTC price goes up. This is a hard asset that, in a way, earns yield on a daily basis, the same way that BTC does. If you’re in the long game, you don’t care about the current price of BTC. Just because the BTC price goes down doesn’t mean all the miners will go down also. It’s more about survival of the fittest. You need to be aware of the macros, but it’s not as bad as one might think. There are different perspectives and situations depending on what size outfit you’re running. Big public companies have a lot of operational factors to consider, but their operational costs (OPEX) inflate their overall cost even if they get $.05 per kilowatt. Their model is different from the analytics of the average miner outside of the public user. CT: What is the state of the BTC mining industry right now? There are rumors that leveraged miners could go under, inefficient miners are turning off and equipment is being sold 50% to 65% lower than 2020 to 2021 prices. What’s happening behind the scenes and how do you see this impacting the industry for the next six months to a year? RF: I agree with all of your observations. We’re at a price consolidation point currently and the market is cleaning up the amount of mining debt that exists. If you can hang on and keep mining, it might keep the hash rate and difficulty at bay. Blockworks believes that there is a severe lack of infrastructure in the space. To have infrastructure, you have to have an incredible amount of CAPEX to get going. There’s been and still is a lack of infrastructure. Regardless of the machines that are there, there’s not a lot of space for hosting. From the broader standpoint, you’re going to see a lot of capitulation, insolvency and excess machines. I know a lot of the big players are putting a pause on funding for miners. That’s a plus for people wanting to get in the space, but we predicted a 60% hash rate increase in 2022 when things were booming. And, as the s19XPs come into light, the hashrate will go up. WS: Many veterans in this space have grown accustomed to these cycles in the Bitcoin ecosystem. Historically, you see the hashrate decline following the price doing the same. In drawdowns like this one, newer miners typically wash out, while the network fortifies. Over the next six months, mining will become more competitive, as bigger players may consolidate and buy miners at a discount.CT: Exactly why is now a good or bad time to start mining? Are there particular on-chain metrics or profitability metrics that miners are looking at or is it just a no-brainer that Bitcoin’s current pricing makes mining attractive? Let’s say I have $1 million cash, is it a good time to set up an operation and start mining? What about $300,000 to $100,000? At the $40,000 to $10,000 range, why might it not be a good time to set up at home or use a hosted mining service? RF: Regardless of the size of the investment, I don’t think any of those values frankly would warrant you wanting to set up infrastructure at scale. A million bucks worth of machines at $5,000 per machine will get you 200 machines, almost a 0.6 megawatts worth. 1 megawatt of power is equal to 300 machines. Housing 200 machines is way different than housing 2 to 10 machines. To diversify $1 million to $300,000, or 60 machines, that’s where you want to start looking at hosting, assuming you’re all in on mining. I treat mining as a hedge, so I’d take 60% of the capital and buy machines and 40% buy spot BTC, or 60% CAPEX for machines, 20% for OPEX and 20% for spot BTC. This is a broader place to think about hosting. $100,000 gets you 20 machines, so you could apply the same strategy. Most residential homes can’t handle that much power demand. There’s a threshold of at-home mining power capacity so you’d have to consider how much power you can get to your house without shutting down the neighborhood. The $10,000 to $40,000 range is more amenable to at-home mining. If your power rate is fixed at $.10 or below you could pull it, depending on where the price is. $40,000 will get you about eight machines. That’s more doable, to be honest. It’s about 24.4 kilowatts per hour for eight machines if you start from four to five machines and test the waters. It’s almost like dollar-cost-averaging into machines and buying them if prices continue to drop.Related: Buy Bitcoin or start mining? HashWorks CEO points to ‘attractive investment yield’ in BTC miningCT: Does BTC price dropping below its all-time high for the first time ever have any significant future ramifications on the fundamentals of the asset and industry? WS: The fundamentals of BTC are unchanged, which is why I still expect BTC to evolve into a global reserve asset. The industry, on the other hand, will learn from this crash: Do not be overleveraged and do not offer yields that leave you vulnerable.RF: Great question, I think from where we’re at now, it was expected based on where people (retail) had bought in the previous cycle. Smart money expected a long bear market to happen, but what has shocked everyone is when and how fast it happened. The mysterious long-awaited blow-off top never happened. Crypto has a lot more exposure and a lot more bad press due to recent implosions and we’ll see more because the news loves bad press and it’s easier to generate. For those who believe in BTC, they’ll ignore it and it’s the opportune time to buy and invest in the space, especially once all the bad energy is cleared out. Lots of people have probably sold the bottom and won’t be back, but this is just the basic market dynamics.CT: The network’s next reward halving is approaching in 676 days. In your view, how will this alter the landscape of industrialized mining and the amount of equipment required to solve an algorithm which becomes more difficult to compute with each halving? RF: Halving events tend to induce miner capitulation. I’m surprised that the current hash rate hasn’t fallen further. We’re not seeing the sharp decrease that was expected before like 20% to 25%. This happens because older-generation machines have to unplug and the rewards don’t match the cost but the expected hash rate increase that comes with each halving means older-gen machines benefit in the short term. Miners unplug when OPEX is unfavorable and then plug back in when the time is right. WS: Miners will want to reduce their costs, as half the reward in Bitcoin may render many mining operations unprofitable (assuming a constant Bitcoin price in United States dollars). Mining equipment will continue to improve in efficiency and miners will continue to seek out the most cost-effective energy sources. Halving is one of the many genius features of the Bitcoin network because it washes out inefficiencies.Disclaimer. Cointelegraph does not endorse any content of product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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‘Unique phenomenon’: All 5B toncoins mined on PoS TON blockchain

The TON Foundation, an organization developing the Telegram-initiated blockchain project, the TON blockchain, on Tuesday officially announced that TON miners have mined the final toncoin.”Tens of thousands of miners have mined the entire issuance of toncoins, which was about 5 billion tokens,” TON Foundation founding member and core developer Anatoly Makosov said in a statement to Cointelegraph. The last toncoin was mined on June 28, he noted.The end of toncoin mining marks a major milestone in TON’s distribution, starting its new era as an entirely PoS blockchain. From now on, new toncoins will only enter circulation via PoS validation, the TON Foundation said. That will result in a cut in the total influx of new toncoins into the network by around 75% to the existing limit of 200,000 tokens per day.The TON price has immediately reacted to the news, surging 34% over the past 24 hours. The token is trading at $1.41, according to data from CoinGecko.TON seven-day price chart. Source: CoinGeckoBy definition, proof-of-stake, or PoS, is a consensus algorithm that operates depending on a validator’s stake in the network. The PoS algorithm is opposed to proof-of-work, or PoW, the original consensus algorithm of major cryptocurrencies like Bitcoin (BTC) and Ether (ETH), which is based on blocks validated through computing power provided by miners.According to TON’s whitepaper, its blockchain uses a PoS approach for generating new blocks. However, its unique infrastructure somehow allowed miners to generate toncoins using the PoW consensus as well, Makosov stated:“The TON blockchain has always been proof-of-stake; the novelty is that even in a PoS blockchain it is possible to write a smart contract that can be mined according to PoW principles.”“If you put the entire coin issuance of the blockchain on such a smart contract, you get a PoS blockchain, but with a distribution of coins in the form of mining. As far as we know no one has done this before,” the developer added.According to Makosov, the current TON network was launched on Nov. 15, 2019, while the coin issuance was put on smart contracts that could be mined on July 7, 2020. The tokens were placed in special “giver” smart contracts, allowing anyone to participate in the mining. “Users mined around 200,000 TON daily,” an official post devoted to TON’s history of mining reads.Related: New $250M TONcoin Fund targets DEX and NFT tools on TON blockchain“Mining on the proof-of-stake TON blockchain was a unique phenomenon to behold,” the post notes, adding that mining on TON commenced “spontaneously and randomly” after the Telegram team agreed on a settlement with the United States Securities and Exchange Commission and was forced to terminate its involvement in TON.

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3 charts showing this Bitcoin price drop is unlike summer 2021

Bitcoin (BTC) bear markets come in many shapes and sizes, but this one has given many reason to panic.BTC has been described as facing “a bear of historic proportions” in 2022, but just one year ago, a similar feeling of doom swept crypto markets as Bitcoin saw a 50% drawdown in weeks.Beyond price, however, 2022 on-chain data looks wildly different. Cointelegraph takes a look at three key metrics demonstrating how this Bitcoin bear market is not like the last.Hash rateEveryone remembers the Bitcoin miner exodus from China, which effectively banned the practice in one of its most prolific areas.While the extent of the ban has since come under suspicion, the move at the time saw huge numbers of network participants relocate — mostly to the United States — in a matter of weeks. As a result, Bitcoin’s network hash rate — the computing power dedicated to mining — roughly halved. At the time, this was unprecedented, while miners felt that they had no choice but at least temporarily to cease operations.This time around, it is not red tape but simple math threatening miners. The BTC price dip to 19-month lows has put mounting pressure on the profitability of mining operations. As Cointelegraph reported, however, a mass capitulation event may not necessarily occur, even at current levels, amid suggestions that miners who needed to sell BTC inventory have already done so. Hash rate supports that thesis, having dipped by a maximum of around 20% from all-time highs before rebounding, according to estimates from data resource MiningPoolStats.Bitcoin estimated hash rate chart (screenshot). Source: MiningPoolStatsActive addressesThe July 2021 drawdown was accompanied by a slowdown in Bitcoin network activity. Active addresses, as measured by on-chain analytics platform CryptoQuant, saw a noticeable drop through June last year before rebounding in line with price in Q3.This time, no such dip has taken place, indicating that the market is more occupied in moving their BTC. This has a number of implications — hodlers may have become sellers due to low prices; traders may be seeking to profit from volatility; others may be looking to “buy the dip.”It is worth noting, however, that overall on-chain volume remains low, and that means that buy-side support is likely insufficient to end the downward price trend, analysts argue.Bitcoin active addresses chart. Source: CryptoQuantExchange reservesFinally, and despite the broadly lower volumes mentioned above, Bitcoin exchanges are losing coins around $20,000 — and fast.Related: These 3 metrics suggest the Bitcoin price crash is not overNormally, price collapses trigger inflows to exchanges as panicking traders prepare to sell or short. This time, it would appear, really is different in that respect, as exchange users are removing coins from accounts, not loading up.21 major exchanges tracked by CryptoQuant currently have a balance of 2.419 million BTC, down from 2.544 million at the start of Q2. Exchange reserves last year conversely rose throughout the Q2 downtrend, only resuming their own drop as BTC/USD recovered.Bitcoin exchange reserves chart. Source: CryptoQuantThe views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Uzbekistan warms up to Bitcoin mining, but there’s a catch

The National Agency of Prospective Projects (NAPP) in Uzbekistan announced its demands toward crypto mining operators. It would only allow the companies that use solar energy to mine Bitcoin (BTC) or other cryptocurrencies. The normative act on the government page, dated June 24, describes the confirmation of “Guidelines on the registration of the crypto assets mining,” and sets the finalization date on July 9. The second article of the document offers an uncompromising wording:“Mining is being carried out only by the legal entity with the use of electric energy, provided by a solar photovoltaic power plant.”As a further complication, the miners should own the solar photovoltaic power plant that they will use for energy. The executive order also obliges any mining operator to obtain a certificate and register in the national registry of crypto mining companies. This procedure demands a brief list of documents, and should take no more than 20 days from submitting to the final decision to the licensing body. The certificates would be valid for one year after the registration. Related: Go green or die? Bitcoin miners aim for carbon neutrality by mining near data centersAll the currency generated from mining activities would be spared taxation, though the mining farms would face the special tariffs on the consumed energy set by the Uzbekistan government. But, the trade operations with mined assets would have to be conducted only on the exchange platforms that are registered in Uzbekistan. The mining of anonymous cryptocurrencies would be prohibited. In April 2022, the freshly-restructured NAPP became Uzbekistan’s exclusive crypto regulator with the mission to adopt a special crypto regulation regime in the country. This move came in a row of initiatives launched by the Uzbekistan President Shavkat Mirziyoyev to provide the regulatory framework for crypto. In September 2018, Mirziyoyev signed a law prohibiting local firms from launching their crypto exchanges in Uzbekistan. The law only offered legal status to crypto exchanges established by foreign legal entities.

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Bitcoin mining revenue mirrors 2021 lows, right before BTC breached $69K

Bitcoin (BTC) visiting the $20,000 range after one and a half years made mining — the most important job of the ecosystem — a costly affair. However, if history were to repeat itself, BTC investors may witness another epic bull run that previously helped Bitcoin reach an all-time high of $69,000.Changes in Bitcoin prices directly impact the miners’ income, who earn fixed block rewards and transaction fees in BTC for running their mining operations. In June 2022, the total mining revenue dipped below the $20 million range, with Blockchain.com data recording the lowest dip of $14.401 million on June 17.Total miners revenue over time. Source: blockchain.comAs shown above, the recent dip in Bitcoin mining revenue was last seen one year back when the total value tanked to $13.065 million on June 27, 2021 — back when BTC traded at roughly $34,000. What followed after that was Bitcoin’s 5-month-long epic bull run, which was supported by pro-crypto initiatives such as El Salvador’s BTC acceptance and crypto-friendly regulations across the globe. Despite mixed sentiments about the recovery of the crypto ecosystem, small-time investors are found to have increased their investment efforts amid the bear market as they fulfill their long-term dream of owning one full BTC (1 BTC). Global recession, geopolitical tensions, falling crypto economies like Terra (LUNA) and an ongoing pandemic currently hold the Bitcoin ecosystem from unleashing its true potential.Monthly operating cash flow Vs. mining revenue. Source: Arcane CryptoA report shared by crypto-focused financial services firm Arcane Crypto revealed that potential of several public bitcoin miners to survive the ongoing bear market. The key to survival for Bitcoin miners boils down to the delicate balance between the revenue and the operating cash flow. Based on the report, Argo, CleanSpark, Stronghold, Marathon and Roit are the best-positioned miners to sustain the crypto winter. At the same time, major player Core has nearly matched its operational costs to its total revenue.Related: Compass Mining loses facility after allegedly failing to pay power billBitcoin mining hardware and hosting company Compass Mining lost one of its Maine-based hosting facilities after failing to pay the electricity bills.Effective June 14th @compass_mining facility hosting agreement in Maine was terminated by @dynamics2k for failure to pay power consumption charges. 6 late payment and 3 non payments. @MiningScandals pic.twitter.com/cSfnWMmqTY— DynamicsMining (@DynamicsMining) June 27, 2022Dynamics Mining, the owner of the mine hosting facility, alleged that Compass Mining has six late payments and three non-payments related to utility bills and hosting fees, stating “all you had to was pay $250,000 for 3 months of power consumption.”

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China’s BSN chair calls Bitcoin Ponzi, stablecoins 'fine if regulated'

Amid the Chinese government continuing to celebrate the massive decline of cryptocurrency markets this year, one key local blockchain expert has referred to crypto as a “Ponzi scheme.”Yifan He, CEO of Red Date Technology, a major tech firm involved in the development of China’s major blockchain project, the Blockchain Service Network (BSN), has penned a new article devoted to various kinds of cryptocurrencies and their supposed Ponzi-like nature.Published in the local newspaper The People’s Daily on June 26, the piece refers to private cryptocurrencies as the “biggest Ponzi scheme in human history.”The author mentioned the Terra network’s collapse, with the native token LUNA crashing 99% and the algorithmic UST stablecoin losing its 1:1 peg value to the U.S. dollar in May 2022. He also criticized the increasingly popular virtual currency concept known as X-to-earn, referring to move-to-earn or play-to-earn projects, calling the model a “phishing strategy.” The BSN chair also mentioned some well-known criticism of Bitcoin (BTC) by Microsoft founder Bill Gates and legendary investor Warren Buffett.He is not a fan of Bitcoin or any similar cryptocurrencies himself as well. “Currently all unregulated cryptocurrencies including Bitcoin are Ponzi schemes based on my understanding, just different risk levels based on the market caps and number of users,” He said in a statement to Cointelegraph on Monday.The BSN chair added that he had not had any cryptocurrency wallet or related assets ever: “I don’t touch them and won’t touch them in the future even if they become regulated because I don’t consider that they have any value whatsoever.”According to He, governments like El Salvador — which opted to adopt BTC as legal tender — “seriously need basic financing training.” “Otherwise, they put entire countries at risk unless their original intentions were to build state-owned crypto trading platforms and scam off on their citizens,” the exec told Cointelegraph.While criticizing Bitcoin and many other crypto projects, He still believes that some part of the crypto market could be doing just fine if it’s properly regulated. Cash-backed stablecoins like Tether (USDT) and Circle’s USD Coin (USDC) should not be viewed as Ponzi-like schemes, the BSN chair said, stating:“USDC or USDT are payment-related currencies, not speculative assets. Once they are fully regulated, they are fine.”He previously talked in favor of stablecoins in 2020. The executive once planned to integrate stablecoin payments into BSN as of 2021. The plan was eventually scrapped due to China’s hostility to crypto.Related: China warns Bitcoin is heading to zero but BoE looks on the bright sideThe news comes amid the Chinese government capitalizing on the ongoing crypto market crash to justify its multiple bans on the industry. The latest coordinated ban was enacted in September 2021, with multiple Chinese authorities taking action to prohibit all kinds of crypto transactions in the country.Despite all efforts, China continued to be a dominant Bitcoin mining supplier worldwide. According to data from the Cambridge Bitcoin Electricity Consumption Index, China was the second largest BTC mining hash rate producer after the United States as of January 2022.

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Bitcoin network power demand falls to 10.65GW as hash rate sees 14% drop

The overall power consumption of the Bitcoin (BTC) network recorded a drastic drop after mimicking the two-week-long fall in the mining hash rate, which reduced the commuting power for mining BTC blocks to 199.225 exahash per second (EH/s). According to the data shared by the Cambridge Centre for Alternative Finance, the Bitcoin network recorded the year 2022’s lowest power demand of 10.65 gigawatts (GW). At its peak, the BTC network demanded 16.09 GW of power. Bitcoin network power demand from 2018-2022. Source: ccaf.ioOn June 16, a Cointelegraph report highlighted how the banking sector utilizes 56 times more energy than the Bitcoin ecosystem. Publisher Michel Khazzaka, an IT engineer, cryptographer and consultant said in an exclusive interview:“Bitcoin Lightning, and Bitcoin, in general, are really great and very efficient technological solutions that deserve to be adopted on a large scale. This invention is brilliant enough, efficient enough, and powerful enough to get mass adoption.”The sudden reduction in Bitcoin’s power demand can be attributed to the falling hash rate. The mining hash rate serves as a key security metric, the computing power required by BTC miners to successfully mine a block.Bitcoin hash rate graph for 2022. Source: blockchain.com Bitcoin’s mining difficulty reached an all-time high of 231.428 EH/s on June 13, which was followed by over a -13.9% drop over two weeks. The latest breakdown of the hash rate distribution shows F2Pool and AntPool as the biggest known miners with each mining 81 and 80 blocks over the last four days respectively. Related: Scientists claim to have designed a fully decentralized stablecoin pegged to electricityA group of researchers, under federal funding, designed a class of stablecoin dubbed the Electricity Stablecoin (E-Stablecoin) that would transmit energy as a form of information. As explained by Cointelegraph, the E-Stablecoin would be minted through the input of one kilowatt-hour of electricity, plus a fee, which could then be used for transactions the same way as any stablecoin.

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Uganda’s gold discovery: What it could mean for crypto

These are fraught times for the cryptocurrency and blockchain sector, so it isn’t surprising that industry proponents might seize upon any promising news to help charge flagging markets. A Reuters report out of Uganda last week about a massive gold ore discovery supplied just this kind of fuel.What does the state of gold mining in Africa have to do with the price of global Bitcoin (BTC)? Quite a bit, potentially.Bitcoin has periodically laid claim to being digital gold largely on the strength of its strict 21 million supply limit, which makes it non-inflationary and a good store of value — in theory. Gold, of course, is the store of value par excellence, with a limited supply and a solid track record that goes back millennia.But, if Uganda is sitting on 31 million metric tons of gold ore, as the government declared, might not that substantially boost the world’s gold supply? That in turn could lower the price of gold — and make it a less secure “store of value” generally. Gold’s loss could be the cryptocurrency’s gain.Some drew encouragement from this notion. Microstrategies CEO Michael Saylor, for instance, posted a video on Twitter about the Ugandan discovery of “huge gold deposits” which might net 320,158 metric tons of refined gold “valued at $12.8 trillion.” As Saylor noted on June 17: “#Gold is plentiful. #Bitcoin is scarce,” further telling CNBC:“Every commodity in the world has looked good in a hyperinflationary environment, but the dirty secret is you can make more oil, you can make more silver, you can make more gold […] Bitcoin’s the only thing that looks like a commodity that is scarce and capped.”But, perhaps there is less here than meets the eye. The 320,158 metric tons of refined gold that the Ugandan mining ministry spokesman said could be produced from the new deposits in the country’s northeastern corner would far exceed the 200,000 metric tons in above-ground gold that exist in the entire world today. One gold mining trade publication went so far as to suggest the Ugandan government may have been confusing metric tons with ounces in its projections. Recent: How blockchain can open up energy markets: EU DLT expert explainsThe World Gold Council was asked for comment about the Uganda discovery and the plausibility of its numbers. The Council doesn’t typically comment on media reports of gold discoveries, a spokesperson told Cointelgraph, but added:“In the absence of formal ore reserve/resource declarations, we would not expect these ‘discoveries’ to contribute materially to mine supply in the foreseeable future.”But, to the larger issue, Saylor may have a point. The fact is that more gold can always be mined, whether in Uganda or somewhere else, especially with advances in surveying and mining technologies, including aerial exploration. And, if so, doesn’t this make Bitcoin, with its strict 21 million BTC limit, look non-inflationary by comparison — and a potentially better store of value?Garrick Hileman, head of research at Blockchain.com, told Cointelegraph:“The Ugandan find underscores why the approximately 200 million holders of Bitcoin believe that ‘digital gold’ — Bitcoin — is superior to actual gold in terms of its scarcity and reliability as a store of value in the decades to come.”As was the case with other major gold discoveries in history, like the 19th century South African gold rush, the introduction of this much new gold — or even just growing awareness of the Ugandan find — “could have significant negative price implications for gold over the coming years,” Hileman said. Not all agree with this assessment, however. “People label Bitcoin as ‘digital gold’ because it was considered a hedging asset, especially against the stock market. This has not been true at least for the last three years,” Eshwar Venugopal, assistant professor in the department of finance at the University of Central Florida, told Cointelegraph. The increasing participation of institutional investors means BTC is now more correlated with risky assets like equities, whereas a store-of-value instrument should be uncorrelated with the stock market. Added Venugopal:“When institutional investors enter such markets, their usual trading stop-loss limits apply and assets in their portfolio and by extension the market become positively correlated with each other. The fact that Bitcoin is bought and sold just like any other risky asset undermines the ‘digital gold’ tag given to it.”In point of fact, “it is clear that the majority of investors do not see Bitcoin as digital gold yet,” Ferdinando Ametrano, founder and CEO of CheckSig — and a founder of the Digital Gold Institute — told Cointelegraph. Rwenzori mountains in Uganda.Meanwhile, Bitcoin is not governed by any entity or a third party and hence is subject to price swings purely based on how the market prices it, Vijay Ayyar, vice president of corporate development and International at Luno, told Cointelegraph. This means that it probably has to go through a significant maturation before it ever becomes “digital gold.” As Ayyar further explained: “Any new monetary asset undergoes a process of monetization through which it becomes more widely regarded as a store of value as a first step. This process could take another 5–10 years even. Gold has been around for thousands of years. Hence, while Bitcoin has all the properties of potentially replacing gold, this may still take some time.” The Bitcoin network has been in operation for a little more than 10 years and market penetration is still less than 1% globally, Ayyer added — though others believe global adoption rates are higher. In any event, “Bitcoin penetration needs to get higher levels as a first step.”Are the numbers plausible?As mentioned, the numbers put out by the Ugandan mining ministry drew some skepticism. Generally speaking, gold has survived as a store of value over the millennia because it is durable, scarce and difficult to mine. A great deal of gold ore is required to produce a single gram of refined gold.Typically, a high-quality underground gold mine will yield 8 to 10 grams of refined gold per metric ton of gold ore, according to the World Gold Council, while a marginal quality mine generates 4 to 6 grams per metric ton. If one settles on a rough average of 7 grams of refined gold per metric ton of gold ore, this means Uganda’s mines will generate about 217 metric ton of refined gold, a far cry from the 320,158 metric tons of refined gold that Solomon Muyita, spokesperson from Uganda’s Ministry of Energy and Mineral Development, told Reuters could be produced by the country’s new discovery. The addition of 217 metric tons would raise the world’s stock of “above-ground” refined gold by only about one-tenth of one percent. All this has only an indirect bearing on the Bitcoin “digital gold” question, which Venugopal, among others, acknowledges is a difficult one. As with fiat currencies, “Bitcoin’s value comes from adoption and users’ faith in the system,” he said. Before Bitcoin can be a store of value, it requires a user base comparable to that of a large fiat currency, in his view, adding:“I see Bitcoin becoming a risk asset but not as a ubiquitous store of value because it is volatile, highly inefficient to mint and challenges sovereignty.” In fact, Venugopal views Bitcoin more “as an experiment to show what is possible and spur innovation.” It has accomplished this, but he expects a more “efficient” cryptocurrency to eventually emerge and supplant it, or perhaps a central bank digital currency. Ayyer agrees that BTC’s recent price volatility hasn’t brought it any closer to achieving “digital gold” status. “Bitcoin has never existed under circumstances we’re currently witnessing and hence this is definitely a test for the asset class as a whole.” Recent: Crisis in crypto lending shines light on industry vulnerabilitiesElsewhere, Hileman is more optimistic. Technologically, Bitcoin simply offers more than a commodity like gold can ever deliver in the long run as an SoV. “Algorithmically deterministic supply schedules such as Bitcoin’s hold a big predictability edge over gold.” And predictability is critical for “taming” exchange rate volatility, which must be subdued “for something to evolve from serving as a ‘store of value’ to actual ‘money,’” Hileman said. And, while relatively few people view Bitcoin as a store of value today, things need not remain that way. “At the burst of the dot-com bubble, Amazon lost 90% of its value because most investors did not understand how pervasive e-commerce would become,” commented Ametrano. Blockchain technology may be similarly under-appreciated today, he added, referencing economist Paul Krugman’s 1998 prediction that the internet would prove less relevant than the fax machine. Sometimes intelligent people simply don’t know.

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Bitcoin miner ‘capitulation event’ may have already happened — Research

Bitcoin (BTC) miners may have already sparked a “capitulation event,” fresh analysis has concluded.In an update on June 24, Julio Moreno, senior analyst at on-chain data firm CryptoQuant, hinted that the BTC price bottom could now be due.BTC price bottom “typically” follows miner capitulationMiners have seen a dramatic change in circumstances since March 2020, going from unprecedented profitability to seeing their margins squeezed.The dip to $17,600 — 70% below November’s all-time highs for BTC/USD — has hit some players hard, data now shows, with miner wallets sending large amounts of coins to exchanges.This, CryptoQuant suggests, precedes the final stages of the Bitcoin sell-off more broadly in line with historical precedent. “Our data demonstrate a miner capitulation event that has occurred, which has typically preceded market bottoms in previous cycles,” Moreno summarized.Miner sales have been keenly tracked this month, with the Bitcoin Twitter account even describing the situation as miners “being drained of their coins.”The #Bitcoin miners are being drained of their coins. pic.twitter.com/O0i9Lx0wQF— Bitcoin (@Bitcoin) June 18, 2022“For miners, it’s time to decide to stay or leave,” CryptoQuant CEO, Ki Young Ju, added in a Twitter thread last week.The situation is tenuous, but the majority of miners remain active, as witnessed by network fundamentals dropping only slightly from all-time highs of over 30 trillion.Bitcoin network fundamentals overview (screenshot). Source: BTC.comMixed signals over buyer interestWhen it comes to other large BTC holders, however, the picture appears less clear.Related: ‘Foolish’ to deny Bitcoin price can go under $10K — AnalysisAfter whales bought up liquidity near $19,000, CryptoQuant’s Ki this week heralded the arrival of “new” large-volume entities.Outflows from major United States exchange Coinbase, he noted, reached their highest since 2013.Time to welcome new #Bitcoin whales.Average $BTC outflows from @Coinbase hit a 9-year high. Average inflows are high as well. There are lots of exchange in/outflows from whales lately, but actually, nothing changed on BTC reserve across all exchanges.https://t.co/Ptw2mg9YuR pic.twitter.com/s697lSvw27— Ki Young Ju (@ki_young_ju) June 23, 2022

Trader and analyst Rekt Capital, nonetheless, reiterated doubts about the strength of overall buyer volume, arguing that sellers were conversely still directing market movements.Bitcoin’s 200-week moving average (MA), a key support level during previous bear markets, has yet to see significant interest from buyers despite the spot price being around $2,000 below it.“Current BTC buy-side volume following the extreme sell volume spike is still lower than the 2018 Bear Market buyer follow-through volume levels at the 200-week MA. Let alone March 2020 buy-side follow-through,” he told Twitter followers. BTC/USD annotated chart. Source: Rekt Capital/ TwitterThe views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitfarms sold 3K Bitcoin as part of strategy to improve liquidity and pay debts

Canadian crypto mining firm Bitfarms sold roughly $62 million worth of Bitcoin (BTC) in June, using the proceeds from the sale to reduce its debt.In a Tuesday announcement, Bitfarms said it had sold 3,000 Bitcoin in the last seven days, roughly 47% of the crypto mining firm’s roughly 6,349 BTC holdings. According to the company, it will use the funds from the BTC sales — $62 million — to “rebalance its indebtedness by reducing its BTC-backed credit facility with Galaxy Digital.” The sold crypto seemingly included 1,500 BTC Bitfarms used to reduce its credit facility from $100 million to $66 million in June, bringing its debt down to $38 million at the time of publication.According to Bitfarms chief financial officer Jeff Lucas, the mining firm is “no longer HODLing” all the Bitcoin it produces daily — roughly 14 BTC — instead choosing to “take action to enhance liquidity and to de-leverage and strengthen” the company’s balance sheet. Bitfarms said it also closed a $37-million deal with NYDIG to finance equipment, bringing the firm’s liquidity to roughly $100 million.“While we remain bullish on long-term BTC price appreciation, this strategic change enables us to focus on our top priorities of maintaining our world-class mining operations and continuing to grow our business in anticipation of improved mining economics,” said Lucas. “We believe that selling a portion of our BTC holdings and daily production as a source of liquidity is the best and least expensive method in the current market environment.”#Bitfarms Adjusts #HODL Strategy• Pays down BTC-back credit facility to US$38 million• Currently holds total of 3,349 BTC• Daily BTC production of approximately 14 BTC adds further liquidityMore info: https://t.co/xCcIUHkWsU$BITF #BTC #BitcoinMining #Blockchain pic.twitter.com/L58siaA99c— Bitfarms (@Bitfarms_io) June 21, 2022Bitfarms held a reported 4,300 BTC as of January, worth roughly $177 million when the crypto asset was at a price of more than $41,000. Founder and CEO Emiliano Grodzki said at the time the company’s strategy was “to accumulate the most Bitcoin for the lowest cost and in the fastest amount of time.” Related: Bitcoin vs. BTC miner stocks: Bitfarms mining chief explains key differencesThe move from Bitfarms came amid extreme price volatility among major cryptocurrencies including BTC and Ether (ETH). On Saturday, the price of Bitcoin dropped under $18,000 for the first time since December 2020 but has since returned to more than $21,000 at the time of publication. The ETH price experienced a similar drop to under $1,000 on Saturday — an 18-month low — before rising to more than $1,200 on Tuesday.

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