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Bitfury and Swiss Investors Launch Bitcoin Mining Fund

Bitcoin Mining Fund

Bitcoin mining technology firm Bitfury Group, recently valued at USD 1 billion, has entered an alliance with Switzerland-based investment firm Final Frontier to launch a regulated Bitcoin mining fund, as reported by Reuters.

Under the supervision of Liechtenstein’s financial regulator, the Financial Market Authority, the fund was developed for both institutional and professional investors to claim access to “the esoteric world of bitcoin mining”.

Bitcoin mining is basically the means by which the Bitcoin network is secured and transactions validated, using computing power to solve extremely difficult cryptographic puzzles. A computer, or a collection of computers connected to a node, credited with solving the next puzzle will have built a block. New blocks will include verified transactions and are added to a chain of chronological blocks, hence adding on to a blockchain. The node credited with finding a new block also receives a block reward of freshly minted bitcoin, so this is also a way of minting new coins, hence, Bitcoin mining.

It has proven to be a profitable business for almost a decade now, with home mining on personal computers very quickly switching to more powerful processors, and eventually companies like Bitfury manufacturing highly specialized equipment called ASICs. Bitfury’s part in this new deal will be to supply the hardware and end-to-end services for the Bitcoin mining fund. It will also be responsible for scouting out the new sites for the activities, deploying equipment and servicing them later.

Ultimately, the fund hopes to invest in mining sites operating with the lowest costs featuring Bitfury data centers. Final Frontier co-founder Imraan Moola aid:

“With the bitcoin price down significantly from its all-time high, yet institutional interest growing every day, now may be an opportune time to consider investing in Bitcoin mining.”

 

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Breaking Down the Latest Ethereum Developments

Breaking Down the Latest Ethereum Developments

Ethereum’s core development team is constantly working to improve and make changes to the native blockchain on which the #2 cryptocurrency is built. This can be observed via the on-chain data available, including the popularity of the native smart contracts.

However, as the bulk of the cryptocurrency market enjoys a period of bullish growth, Ethereum is struggling to entice miners to the network due to break-even prices.

What the on-chain dates can tell us

  • Like Bitcoin, active Ethereum addresses (those engaged in transactions within the last 24 hours) have experienced an upturn after 9 months or so of steady decline; this change has coincided with the rise of both cryptocurrencies’ prices.
  • Decentralized finance, or DeFi, has proved to be the second biggest use case so far for Ethereum, private fundraising being the first. Growth in the area of DeFi has been at a lull for the last month or so after demonstrating impressive growth rates since September last year, potentially showing it has reached a temporary structural ceiling.
  • The aggregate number of smart contract interactions have been on the rise since February, coming close to the all-time highest levels, seen in April 2018. Because the number of new ICOs have been at such low levels for over a year now, it can be assumed that the rising smart contract use demonstrates a strengthening of trust in their utility. Stability in Gas cost also implies the network is moving closer to network capacity.

The Ethereum hash rate negative trend

Like Bitcoin, Ethereum is a Proof-of-Work cryptocurrency, but unlike Bitcoin, Ethereum’s hash rate has failed to pick up since the favorable market turn. Current market prices have meant Ethereum mining is still unprofitable for many, showing the network has failed to meet equilibrium yet. Compared to Bitcoin, the inflation rate of Ethereum remains high.

The fact that Ethereum will be moving to a Proof-of-Stake system in the near future may also be influencing the lack of miners on the network, although the date of this implementation has already been pushed back once this year.

Ethereum price fluctuations

While Ethereum may not be as bullish right now as Bitcoin or many of the altcoins it has pulled up with it, in the last few days ETH has shown a strong rebound hitting USD 174 before settling around USD 166. Against the USD, Etherum surpassed key levels at USD 169/ USD 179, showing indicators that a climb past USD 180 is viable.

Ethereum is currently +1.25%, trading at USD 173.22; at its peak price in January 2018, Ethereum was trading at USD 1345.07. In December last year, it fell as low as USD 84.00 – a level not experienced since May 2017.

 

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China Firm Mines Bitcoin Secretly, End up Losing $23 Million

China Firm Mines Bitcoin Secretly, End up Losing  Million

A Chinese company has sold off its subsidiary at only 10% of the original valuation after suffering losses from suspected secret cryptocurrency mining activities amounting to some USD 23 million.

Huatie HengAn, the subsidiary of listed Chinese company Huatie, was reported by local media outlet 8BTC as having been sold for USD 2 million. Just one year ago, it had been valued at USD 25 million.

Originally a construction company, in 2018, Huatie HengAn allegedly bought about 36,500 pieces of hardware equipment it listed as “servers” from hardware manufacturers Canaan and Ebang. These are both specialized Bitcoin mining hardware producers, so it was suspected that the pieces of equipment were bought solely for the purpose of mining crypto instead of construction.

Huatie’s end of year report released last December showed losses of about USD 14 million for its subsidiary firm. By February 2018, this net loss had risen to a total amount of USD 23 million.

The company can take comfort from the fact that they weren’t the only ones who suffered in the mining business. Although the first half of 2018 already saw prices of crypto falling, it wasn’t until the latter half of the year that difficulties emerged for Bitcoin miners.

Hashflare was the first big casualty, closing down its popular cloud mining services. And then when Bitmain – along with its failed support for Bitcoin Cash – posted massive losses, hash power began to drop for the first time in years.

 

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Bitcoin Miners Flock to Canadian Provinces with Low Cost Energy

Bitcoin Miners Flock to Canadian Provinces with Low Cost Energy

An article in Bitcoin Magazine is describing how several provincial governments in Canada are making attractive offers to Bitcoin miners, plying them with cheaper electricity thanks to the country’s cool climate and its abundance of hydroelectricity in return for economic gains.

Across Alberta, British Columbia, Labrador, Manitoba and Quebec, Bitcoin miners are answering the call. According to a National Post story, the government in Labrador is now making way for even more incentives as a response to what it is calling “outstanding requests for service” from Bitcoin and others.

It isn’t always good news, however, as Quebec was surprised by the deluge of miners responding to their earlier beckoning, with even Chinese companies considering to relocate there, willing to pay standard business rates for electricity. that province was forced to rescind some of its earlier advantages. That move did not come without controversy as well.

Labrador may feel it has nothing to lose, however.

Formerly a resource rich province, like much of north Canada, its forests and fisheries have been depleted and is too far away from major markets to thrive economically. What it does have still is two huge hydropower dams — Churchill Falls and Muskrat Falls.

So far so good, and there has already been a recognized increase in demand from miners, according to an anonymous source who spoke to The Telegram:

“Data businesses are expressing an interest and willingness to ‘take what’s available,’ and are requesting new transmission infrastructure to make more power available to them in Labrador, locating wherever the feed of power is possible. They just want low power rates.”

 

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Chinese Miners Struggle for Easy Ride in Iran

Things aren’t turning out to be smooth for Chinese Bitcoin miners heading into Iran to profit from cheaper electricity rates.

Long before China hinted it may consider halting Bitcoin mining projects, the exodus began and Iran recently became a hotspot for miners along with parts of South East Asia such as Vietnam and Cambodia. China’s National Development and Reform Commission (NDRC) is now looking to siphon off a number of industries which include cryptocurrency mining as part of a state cleanup.

The Iranian venture for many of those Chinese miners deciding to make the move has gone sour, and reports coming back from Iran highlight some of the issues which have made the Middle East less attractive than was at first perceived.

One issue has been getting the equipment across the Iranian border. One miner Liu Feng reported that the chance of losing equipment at the border has become common, with Iranian customs confiscating at least 40,000 crypto mining rigs to date. Some rigs can be sneaked through if presented as non-mining processors for those lucky enough to be able to strike up a deal with customs officials. Feng explains the reason for the confiscations:

“Because of [Iran’s] huge electricity subsidy, the government has added this energy-hungry device (bitcoin miner) to the list of 2,000 banned shipments to come in.”

The same mining enthusiast, Lui Feng also had problems pricing his electricity supply with a local supplier after his supply tariff was doubled just two months into operation. A subsequent set up resulted in angry locals complaining about the noise emitted from his rigs, resulting in miners being confiscated.

Despite these hurdles, Chinese Bitcoin miners are still optimistic that it can get better for them in Iran. With the Iranian government now accepting crypto mining as a legal activity, Iran’s President Hassan Rouhani is behind a new cloud computing industrial park. Also, there are rumors that Tehran may get behind the import of Bitcoin mining hardware.

Currently, the Islamic Revolutionary Guard Corps are still detaining or confiscating machines at border points with tough import rules still in place.

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China State Planner Targets Crypto Mining on Clean Up List

China State Planner Targets Crypto Mining on Clean Up List

China’s National Development and Reform Commission (NDRC) is looking to siphon off a number of industries which include cryptocurrency mining as part of a state cleanup.

The NDRC of the People’s Republic of China, formerly State Planning Commission and State Development Planning Commission, is a macroeconomic management agency under the Chinese State Council, which has broad administrative and planning control over the Chinese economy. The commission is therefore responsible for rubber stamping or even eliminating industry in the country.

It appears that Bitcoin mining may fall into the latter scenario as the activity has been added to a cull list of over 450 activities under scrutiny due to what it sees as a violation of relevant regulations. The public has been given a month to make their own views felt on the commission’s latest draft, after which, more formal decisions will be taken regarding the future of the named activities.

Such a move has been anticipated within the Chinese cryptocurrency community after ICOs were banned and many exchanges driven overseas after an official shutdown. Although Chinese companies list among the world’s major manufacturers of mining gear and the country remains home to major crypto mining firms, the pressure is on to follow the government line, which remains vehemently anti cryptocurrency, despite top-down official expressions of interest in the burgeoning blockchain industry.

A local state-owned paper the Security Times said that the announcement “distinctly reflects the attitude of the country’s industrial policy”.

A plan by mining giant Bitmain which suggests it is preparing to roll out 20,000 of its own mining units in China to capitalize on the country’s cheap hydroelectric power later this year may well have to be revised dependant on the outcome of the NDRC decision.

 

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Missoula County’s Sole Bitcoin Miner Protests Emergency Ruling

Missoula County’s Sole Bitcoin Miner Protests Emergency Ruling

Just a day after promising to make the Missoula urban area run only on renewable energy by 2030, commissioners in the Montana state county yesterday declared a public emergency to justify interim regulations on new or expanded cryptocurrency mining operations. These are to stay in place until a solution is found.

Although the authorities have insisted that it is not specifically targeting a specific company, since emergency zoning measures would target all businesses, mining firm HyperBlock is the only operation in the county. It has now protested the new regulations, saying it would have no choice but to shut down its business to comply.

The attorney representing the firm, James Bowditch, told commissioners the firm did not want to be forced into litigation:

“You’re really targeting one business and that’s the only business that exists that will be impacted by these regulations. Nobody disagrees, including myself and my client, that climate change is important. But this is not the way to do it. Doing so this way will only result in one thing, and that’s what I’m fearful of, and that’s a lawsuit.”

HyperBlock brought attention last year when commissioners said that its operations consumed energy equal to a third all households in the county. Commissioner Dave Strohmaier declared:

“As near as I can tell, cryptocurrency mining is using exponentially more energy than any other energy user. As far as an industry goes, it’s a grotesque amount of energy and we’ve got to take steps to address it.”

The new regulations mean that HyperBlock cannot expand, and prevents other miners from starting up in Missoula County, unless it develops or buys renewable energy to fully offset what it consumes. HyperBlock does in fact run on 100% hydropower but does not meet the new criteria because the green energy must be newly acquired, and not taken from existing supply.

Diana Maneta, the county’s climate action advisor, explained:

“The mining operation must be able to establish that their actions will introduce new renewable energy onto the electrical grid, beyond what would have been developed otherwise.”

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The Environmental Debate is Here to Stay: Bitcoin Miners Explore Greener Options

The Environmental Debate is Here to Stay: Bitcoin Miners Explore Greener Options

The power-hungry Bitcoin debate is back on again after the release of the latest research conducted by economist Alex De Vries; the last of which stirred the crypto community into a frenzy in late 2017. One year on, the cryptocurrency ecosystem in all of its forms has developed a far thicker skin.

The argument

To refresh the original argument posed by De Vries at about this time last year, the Dutch researcher concluded that Bitcoin mining used almost as much electricity as the entire Republic of Ireland; quite an assumption and quite a response, many of which were pretty unfavorable, to say the least. Many pointed out the similarity to concerns in the 1990s when some experts predicted that half of the US electrical grid would be needed to power the then-burgeoning internet, which was later proved to be highly exaggerated.

What then of De Vries’s latest report which has taken a step further now asserting that cryptocurrency is killing the planet? Is there truth in this? Without attempting to balance what cryptocurrency is giving back to the planet in terms of helping alleviate some of the world’s humanitarian issues, many of which have been covered by Bitcoin News over the past 12 months, it might be worth examining this latest De Vries assertion in more detail, on its merits.

Although no one knows for sure exactly how much energy is being consumed across the planet through crypto mining, De Vries has now pulled Switzerland’s total power supply out of a hat as a comparison. He goes on to maintain that that this approximated 62.3 terawatt-hours consumed through mining over the course of 2018 is moving the world closer to his killing the planet prediction.

Does he have a point? It is well known that Bitcoin mining clearly is not economically viable in its present guise and that changes must be made to drastically lower power consumption. The industry, the man in the street even, knows this. It has been well published elsewhere and no one is attempting the hide this fact. The industry, however, is attempting to reassess how mining is carried out, in a way which both protects the environment and reutilizes the energy created in the process of mining, albeit slowly. The willingness is there.

The figures

De Vries poses the problem as he sees it in his latest paper. Here are the numbers which, although give a nod to renewable energy as a possible next step to solving power over consumption, focus primarily on electronic waste caused by the current status quo:

In this paper, we find that the Bitcoin network, with an electrical energy footprint of 491.4 to 765.4kWh per transaction on average, is relatively much more energy-hungry than the traditional financial system. Even though it has been argued that renewable energy may help mitigate the environmental impact of this, we find that there exist fundamental challenges in uniting variable renewable energy production with the consistent demand of Bitcoin mining machines. Moreover, we find that the environmental impact of Bitcoin mining reaches beyond its energy use. Continuous increasing energy (cost) efficiency of newer iterations of mining devices ensures that older ones will inevitably be disposed on a regular basis. The resulting electronic waste generation could equal that of a small country like Luxembourg, with a staggering average footprint of four light bulbs worth of electronic waste per processed Bitcoin transaction. Bitcoin will therefore have to address its sustainability problem in another way. This may consist of replacing its mining mechanism with a greener alternative like Proof-of-Stake.

The De Vries paper goes on to claim that based on 2018 figures the Bitcoin network processed 81.4 million transactions at about 491 to 765-kilowatt hrs per transaction. The paper asserts that the global banking industry, estimated to use 650 terawatt-hours per year, processed 482.6 billion non-cash transactions per year, meaning it only uses 0.4 kilowatt-hours per transaction.

Industry response to energy consumption

A Coinshares report conducted last year called on industry insider knowledge and data available to the general public in order to put together an estimate of exactly where the energy used by the miners originate from. The proposal is that 77.6% of worldwide Bitcoin mining is conducted through the use of renewable energy resources.

Even if these figures are refuted elsewhere, it is clear that the use of renewables and the recycling of energy created by mining is being explored both individually — using some bizarre and innovative methods — and at company-level, and also nationally. China, a massive mining nation, now has a major campaign which is aimed at drawing the country to supplying renewable energy such as solar.

The Chinese program, entitled “curtailment” is largely conducted in regions where most Bitcoin mining takes place. Last year China became the world’s highest producer of solar energy. This has resulted in a glut of power which regional grids in these newly labeled areas are simply unable to deal with. Iceland, Georgia, and the Northwestern US are also strong adherents to the use of renewable energy for Bitcoin mining. Projects are currently underway in the Sahara using a 900-megawatt wind farm south of Marrakesh, and in Japan using solar power through the Kumamoto Electric Power Company.

Natural gas

How can oil companies burning off unneeded natural gas supplies into the atmosphere be seen as viable? The releasing of unwanted gas must be viewed as an opportunity. In parts of the US, natural gas is so cheap companies pay to have gas that they can’t burn due to imposed federal limits simply hauled away. The use of gas to power mining rigs can be explored further.

To prove it can be done, one oilman turned Bitcoin supremo, is doing exactly that on a Canadian oilfield using a generator attached to a shipping container full of mining rigs which converts the natural gas to enough electricity to run the system 24 hours a day 7 days a week. The brains behind the system, Steven Barbour, believes that this transformation of otherwise wasted energy is running computers to provide “financial freedom for people all over the world”, and he has a point.

Recycling mining energy

Energy normally used elsewhere in an environment can be saved and harnessed by reliance on that same energy created by the mining process. This is now becoming a much-used process, particularly at the individual user level and must present an option for large mining companies in the future. Heating is an obvious choice as mining is mainly conducted in cold climates in spaces that require air conditioning to stop equipment overheating. With both heat available for warming attached spaces and the saving of power on air conditioning, much energy can be saved by using the mining equipment as a source of energy. With imagination, the energy generated in the mining process can be employed, not only to heat space but to grow crops and provide hot water, and there are clearly other numerous uses for the unwanted energy.

Changes to the mining mechanism

“Ultimately, Bitcoin is just software,” says de Vries. “The mining mechanism can be replaced. The challenge is that the entire network needs to agree to this change.”

De Vries is referring to his argument that by changing the mechanism behind the mining of Bitcoin the digital currency’s energy consumption can be drastically cut. It this regard he is correct, as proven by the proof of stake system used by Dash and NXT which is not dependable on computing power and doesn’t require specialized hardware.

Other solutions are out there, such as the EBGLO mechanism which operates through data transmission and HETTARER, a technology which uses an electromagnetic sticker that gathers the elementary particles into a constitution state which then work together to neutralize the electromagnetic noise. This system can lower the frequency of electric devices by around 90%. The Data Transmission System works to increase the computing performance, increase the hash rate and allow miners to receive higher revenue compared to the regular process that involves only computers.

 

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Bitmain Reveals Next-Gen Antminer S17 Launch Date

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Major cryptocurrency mining equipment manufacturer Bitmain has revealed the launch date for its latest technology, the Antminer S17 series.

Comprised of three different models: the Antminer S17 Pro, Antminer S17, and Antminer T17, the series will go on sale internationally on 9 April. Bitmain claims the second-generation 7nm ASIC chips will save 28.6% energy consumption during the mining process. While the company says the S17 series will operate at a higher hash rate, they did not reveal further details regarding numbers.

The company noted that with heavy electricity costs in relation to Bitcoin’s current prices, the ”improved energy efficiency” of the new models will lead to a ”significant drop in costs,” improving the profit margin.

It was recently revealed that Bitmain would deploy 200,00 of its own mining devices to Southwestern China after an executive decision was made that it would be more profitable to do so than to sell them.

A poorly performing cryptocurrency market has influenced fiscally conservative policies for the company. Bitmain closed its Israel center in December and reduced its Netherland operations earlier this year in January.

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Bitmain to Install 200,000 Mining Units in China

Bitmain to Install 200,000 Mining Units in China

Major cryptocurrency mining company Bitmain is reportedly preparing to roll out 20,000 of its own mining units in China to capitalize on the country’s cheap hydroelectric power this summer.

The estimated USD 80 million in equipment may actually provide the company higher profits if it chooses to mine cryptocurrency in China rather than sell the equipment on, a source familiar with the matter shared with CoinDesk.

Bitmain is allegedly already in conversation with local mining farms over a deal to host its equipment, which are cited to be in this case the AntMiner S11 and S15, alongside some older models like the AntMiner S9i/j.

The mining company has been fiscally conservative over the last year, closing its Israel center in December and reducing its Netherland operations earlier this year in January. Bitmain said both moves were part of a long-term, cost-saving road map as it struggles against a poorly performing cryptocurrency market.

Gadi Glikberg, head of the Israeli branch and Bitmain vice president of international sales, said at the time of his branch’s closure: “The crypto market has undergone a shake-up in the past few months, which has forced Bitmain to examine its various activities around the globe and to refocus its business in accordance with the current situation.”

 

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