Crypto

Cryptocurrency and the Climate Crisis | The Regulatory Review

Published

3 years ago

May 16, 2022

Cryptocurrency and the Climate Crisis | The Regulatory Review

Proponents of crypto should reveal that its worth to society exceeds its important environmental prices.

The imaginative and prescient behind cryptocurrency has been to free cash from the centralized management of banks and different monetary intermediaries—and in the end to switch the present sovereign-based monetary system. However to attain its aspirations, cryptocurrency makes use of expertise that calls for huge quantities of power. Its local weather impacts merely can’t be ignored.

To grasp what cryptocurrency is and the way it works, think about how monetary transactions ordinarily happen at this time. Each time shoppers full a transaction with out money, the transaction should be validated by means of an middleman within the type of a financial institution. The banks function with extra intermediaries within the type of the U.S. Board of Governors of the Federal Reserve System or the European Central Financial institution. All this intermediation entails some small transaction prices, but additionally offers rise to concern in regards to the worth of the foreign money as a result of the Federal Reserve can basically print cash. Orthodox financial idea teaches the extra money created by central banks, the better the danger of inflation. That doesn’t imply that intermediation isn’t good although. It has, in spite of everything, succeeded in financing appreciable financial progress for many years.

The cryptocurrency revolution intends to cut back the price of middleman transactions by utilizing a distributed ledger system: Blocks that type a part of a blockchain are used to validate the so-called actuality of every cryptocurrency. Probably the most well-known and largest cryptocurrency is Bitcoin, however there are different large ones too, similar to Ethereum. They’re validated by a course of referred to as “mining,” which implies that mathematical issues should be solved by “miners,” who’re rewarded with a selected cryptocurrency. This course of analogizes nicely to gold mining in that for those who carry out the work and efficiently establish what’s real gold and never idiot’s gold, you’re going to get the reward of constructing a giant stash of cash.

The distinction within the trendy world is that cryptocurrency may be very sophisticated when it comes to the options to the mathematical puzzles utilized in validation, which get more and more troublesome as extra crypto cash are found. This end result has required the usage of extraordinarily giant computing energy to have the ability to compete—so giant that the size is staggering. Massive banks have large laptop methods, and but even their knowledge facilities are dwarfed by large cryptocurrency-mining facilities. That intensive power consumption has given rise to critical issues in regards to the environmental impacts of cryptocurrency.

Extra environment friendly methods to develop and mine cryptocurrency might exist. However as extra folks use cryptocurrency, these supposed effectivity positive aspects could be overwhelmed. This potential for crypto’s scale to overwhelm even better effectivity issues as a result of the aspiration of cryptocurrency’s proponents is in the end to switch sovereign monetary methods. That might carry a couple of huge enhance within the progress of the usage of crypto expertise—and its power calls for.

At this stage, a single Bitcoin transaction makes use of the equal electrical power of a median U.S. family over about 70 days—actually large power demand. The exact carbon footprint is determined by how the electrical energy equipped to the servers is produced. However assuming it’s based mostly on coal, its local weather impacts could be described in phrases that any teenager can perceive: one Bitcoin transaction equates to nearly 200,000 hours of watching YouTube.

The Bitcoin community makes use of an electrical energy consumption on an annual foundation that’s better than the power consumption of the nation of Norway, and never that far behind that of New York state. Each every so often, commentators even discuss Bitcoin quickly utilizing extra power than the town of London.

Ethereum is considerably extra environment friendly, however not a lot completely different. It has a decrease quantity however a single Ethereum transaction nonetheless makes use of the identical electrical energy as a median U.S. family for about 9 days, and it has a carbon footprint of virtually 24,000 hours of watching YouTube.

This large power consumption interprets into main well being and environmental justice impacts. Individuals dwelling in neighborhoods close to energy-generation crops, similar to coal-fired utilities, should endure the well being results related to air pollution. And any burning of fossil fuels will affect the local weather.

Displaced staff at defunct mines understandably welcome the employment crypto power manufacturing gives, however there are certainly extra environmentally constructive methods to help such staff.

Waste is a priority too, which may end result from discarded laptop chips and different laptop tools when it should be changed. For Bitcoin, the digital waste equates to that of the IT and telecommunication waste generated by the Netherlands. In an period of microchip shortages, this concern turns into more and more vital.

Defenders of cryptocurrency will say, “Certain, it makes use of lots of power, however how a lot power do you suppose the banking system makes use of?” Nicely, the carbon footprint of 1 Bitcoin transaction equates to just about 2 million Visa transactions. When it comes to effectivity, there may be merely no comparability.

Defenders have additionally protested that cloud knowledge facilities, for instance, use monumental quantities of power. The relative comparability, even when conceivably true, is in no way clear. In any occasion, such examples check with the platforms for present commerce, not add-ons similar to cryptocurrency. So the comparability is deceptive.

The crypto business is now below lots of stress from two instructions. On one aspect are the local weather teams which might be nicely organized and really upset in regards to the business’s power use. On the opposite aspect is the Crypto Local weather Accord, a consortium of cryptocurrency organizations that tries to make crypto greener—which means reliant on much less power consumption. Many gamers are concerned within the Crypto Local weather Accord, and it’s doable that might be the place crypto goes sooner or later.

The opportunity of inexperienced crypto definitely gives some hope. Various supposedly inexperienced cryptocurrencies are rising, however my studying is that none of them have but obtained something just like the form of market share that might compete with these of massive gamers like Bitcoin and Ethereum. And there are numerous meanings of “inexperienced.” In the end, it is determined by the place the power is coming from. If the supply is renewable, similar to wind farms or photo voltaic technology, it will not be dangerous. The traits, nevertheless, should not encouraging.

The controversy over crypto is not going to finish by simply declaring it might be extra environment friendly than it’s at this time. In any case, the standard banking business can also be continually striving to make its laptop methods extra power environment friendly too. To resolve the controversy over crypto, business gamers should not solely handle its large environmental impacts, however they have to additionally present why it ought to exist in any respect. How does it profit society? Lots of people imagine in crypto and presumably they profit from it. However that doesn’t imply that it confers an mixture profit to society as a complete. There needs to be one thing higher about crypto than the present system. And for that query, the jury continues to be out.

Lawrence Baxter is the David T. Zhang Professor of the Apply of Regulation at Duke College

This essay attracts on remarks delivered earlier this yr at an occasion cosponsored by the Wharton Danger Middle and the Penn Program on Regulation (PPR). A full video recording of the session is offered at PPR’s YouTube channel.

Proponents of crypto should reveal that its worth to society exceeds its important environmental prices.

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Crypto

Blockchain Revolution: How Cryptocurrency is Transforming Global Logistics – theafricalogistics.com

Published

4 hours ago

December 22, 2024

Press Room

Blockchain Revolution: How Cryptocurrency is Transforming Global Logistics – theafricalogistics.com

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The global logistics industry is undergoing a seismic shift, driven by the integration of blockchain technology and cryptocurrency.

These innovations promise to enhance transparency, efficiency, and security across the supply chain. From tracking shipments to streamlining cross-border payments, the synergy between blockchain and cryptocurrency is setting new benchmarks for the logistics sector.

1. Blockchain’s Role in Logistics

Blockchain technology, essentially a decentralized ledger system, enables secure and transparent recording of transactions. For logistics, this translates into the ability to track goods in real-time, authenticate the origin of products, and mitigate fraud. Key benefits include:

Enhanced Traceability: Every transaction, from the manufacturing stage to delivery, is recorded on an immutable ledger. This ensures that stakeholders have a comprehensive view of the supply chain.
Reduced Paperwork: By digitizing documents such as bills of lading and certificates of origin, blockchain eliminates the inefficiencies of manual processes.
Improved Trust: Smart contracts, self-executing agreements coded on the blockchain, reduce disputes and enhance trust between parties.

2. Cryptocurrency in Cross-Border Transactions

Traditional cross-border payments in logistics are often marred by high fees, long processing times, and currency exchange risks. Cryptocurrencies, like Bitcoin and stablecoins, are addressing these challenges by:

Lowering Transaction Costs: Cryptocurrency transactions bypass intermediaries, significantly reducing fees.
Speeding Up Payments: Transactions settle in minutes, eliminating delays common with traditional banking systems.
Enhancing Financial Inclusion: For businesses in emerging markets, cryptocurrencies provide access to global trade without reliance on conventional banking infrastructure.

3. Use Cases Transforming the Sector

Several real-world applications highlight the impact of blockchain and cryptocurrency in logistics:

Walmart’s Blockchain Initiative: Walmart leverages blockchain to track the origin of produce, ensuring food safety and traceability within its supply chain.
Maersk’s TradeLens Platform: Developed in collaboration with IBM, TradeLens uses blockchain to digitize and streamline global shipping documentation, reducing inefficiencies.
Cryptocurrency-Powered Freight Payments: Startups like Slync.io enable shippers to pay carriers using digital currencies, enhancing payment speed and reliability.

4. Challenges to Adoption

Despite its potential, the adoption of blockchain and cryptocurrency in logistics is not without hurdles:

Regulatory Ambiguities: The legal status of cryptocurrencies varies across countries, complicating implementation.
Scalability Concerns: Processing thousands of transactions per second remains a challenge for blockchain networks.
Skill Gaps: The logistics workforce often lacks the technical expertise to deploy and manage blockchain systems.

5. The Road Ahead

The integration of blockchain and cryptocurrency in logistics is still in its nascent stages but holds immense promise.

Industry players are investing in pilot projects to explore scalability and operational viability. The convergence of these technologies with artificial intelligence and IoT will further revolutionize the sector, enabling predictive analytics, autonomous supply chains, and more.

Conclusion

Blockchain and cryptocurrency are not just buzzwords but transformative tools reshaping the logistics landscape.

By fostering transparency, reducing costs, and expediting processes, these technologies are addressing long-standing inefficiencies in the supply chain.

As adoption accelerates, businesses that embrace this revolution stand to gain a significant competitive edge in an increasingly digital and globalized economy.

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Crypto

My Top Cryptocurrency to Buy Right Now (Hint: It's Not Bitcoin) | The Motley Fool

Published

11 hours ago

December 22, 2024

Press Room

My Top Cryptocurrency to Buy Right Now (Hint: It's Not Bitcoin) | The Motley Fool

The performance of Bitcoin (BTC -0.53%) this year has been nothing short of extraordinary. It’s now up about 46% since the election on Nov. 5, and 146% year to date. Best of all, Bitcoin recently broke through the $100,000 price level to hit another all-time high just north of $108,000.

But what if I told you that there is another top cryptocurrency that is up more than 120% since the election, and 430% year to date? And that this cryptocurrency also just set a new all-time high? That cryptocurrency is Sui (SUI -3.69%), which now ranks 14th among all cryptocurrencies with a $13 billion market cap.

What is Sui and why haven’t I heard of it before?

If you’ve never heard of Sui, that’s understandable. The cryptocurrency only launched in May 2023, just as the market was emerging from the crypto winter of 2022. So, in many ways, its launch flew under the radar of investors. There were bigger issues to consider. The industry was still coping with the aftermath of the collapse and scandal of crypto exchange FTX in November 2022, and nobody was very interested in hearing about another new cryptocurrency launch.

But fast-forward to August 2024. That’s when 21Shares — the company that partnered with Cathie Wood’s Ark Invest on the launch of spot exchange-traded funds (ETFs) for Bitcoin and Ethereum (ETH -0.79%) — released a research report on Sui, detailing all of its unique characteristics. For example, it described how a new technical upgrade suddenly made Sui faster than any other top blockchain by a substantial margin. It pointed out how Sui was rapidly growing in terms of total value locked (TVL), which is a key metric showing the relative strength of a particular blockchain.

Image source: Getty Images.

The title of the report (“Is Sui a Solana (SOL -0.00%) Killer?”) was very provocative, at least for crypto investors. It suggested that Sui had the technological chops to take on Solana, which now ranks as the fifth-largest cryptocurrency. For several years now, Solana has been positioned as the next Ethereum, so Sui being tabbed as a potential Solana killer is a big deal. In fact, 21Shares suggested that there might be a $68 billion market opportunity for Sui if it was able to take on Solana and win.

How high can Sui go in 2025?

My primary concern right now with Sui is that it may be overheating. Just like Bitcoin, it is smashing through all-time high after all-time high. Right now, Sui is trading at about $4.50 after briefly testing the $5 price level. From the perspective of crypto traders, $5 presents the same psychological price barrier for Sui that $100,000 did for Bitcoin. It took Bitcoin a while to break through the $100,000 level, so Sui may not be able to break through the $5 price level by the end of this year.

But, in 2025, watch out. Just take a look at this comparison chart of Bitcoin and Sui since the presidential election. That leads me to think that the market is very bullish on Sui’s prospects under the Trump administration.

Bitcoin / U.S. dollar chart by TradingView

Moreover, consider the trading volume that Sui is now seeing on Coinbase Global (COIN 1.75%). Sui has become one of the 10 most popular cryptocurrencies on the platform in terms of 24-hour trading activity. Granted, the trading volume in Sui is nowhere near that of Bitcoin or Ethereum. But there’s more activity in Sui than in popular cryptocurrencies such as Chainlink, Litecoin, Cardano, Shiba Inu, and Avalanche.

Best of all, Sui has a major new product launch coming in 2025. It’s a $599 handheld gaming device that is currently available for pre-order online. If that product launch is a success, then it could be off to the races for Sui. It could easily double in price to hit the $10 price level.

This cryptocurrency could soar even higher if it ever realizes its full potential as the next Ethereum. Imagine if you had invested in Ethereum just 18 months after its launch. Most likely, you’d be a crypto millionaire by now. In December 2016, Ethereum was trading around $5, which is roughly where Sui is trading right now. Today, Ethereum trades for about $3,400.

That said, I can’t emphasize enough how speculative Sui is. It is still a baby in crypto terms. It has only been around for 18 months, and it can be difficult to get good data and reliable information about it. So, do your due diligence before investing in Sui, and keep your expectations in check. An investment opportunity like Ethereum might only come around once in a lifetime, so it’s asking a lot for it to happen with Sui as well.

Dominic Basulto has positions in Bitcoin, Ethereum, SUI, and Solana. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, Ethereum, SUI, and Solana. The Motley Fool has a disclosure policy.

Crypto

S. Korea, US conducting joint research to block NK cryptocurrency heists

Published

19 hours ago

December 22, 2024

Press Room

S. Korea, US conducting joint research to block NK cryptocurrency heists

A representation of Bitcoin and a price chart are seen in this October 2023 photo illustration. Reuters-Yonhap

South Korea and the United States are conducting joint research to strengthen protection against cryptocurrency heist attempts amid growing concerns of such attacks by North Korea-linked hackers, officials said Sunday.

Based on a recently signed technical annex between the South Korean government and the U.S. Department of Homeland Security, the two sides will jointly develop technologies to prevent cryptocurrency-targeted attacks and to track stolen assets, according to authorities and cybersecurity industry officials.

The science ministry plans to support such research through the Institute of Information & Communications Technology Planning & Evaluation until 2026.

The move comes as the price of bitcoin recently surged to $100,000 after the U.S. presidential election last month, raising concerns of increased attempts by hackers to steal virtual assets.

While the United States collaborates with other countries for cybersecurity research, it is known to have chosen South Korea for research on digital asset tracking technology as North Korea is seen as a key culprit behind cryptocurrency heists.

Under the program, South Korean and U.S. researchers, including those from Korea University and the RAND research institute, will focus on technologies to prevent and track hackers when they steal assets from a cryptocurrency exchange.

They will also focus on understanding how they convert or launder other financial assets they obtain into virtual assets through illegal ransomeware or other methods.

North Korea is known as a major player in cryptocurrency heists, with hackers linked to the country estimated to have stolen $1.34 billion worth of cryptocurrency across 47 incidents this year, according to Chainalysis, a blockchain analysis firm. (Yonhap)