Category: Digital Asset Mining

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BTC Holders Breathe Sighs of Relief as EU Parliament Votes Against Proof-of-Work Ban

In yet another unexpected twist in the ongoing European cryptocurrency regulation saga, the EU Parliament has officially removed all language banning proof-of-work (POW) cryptocurrencies from the newly passed Markets in Crypto Assets (MiCA) directive. 

EU Goes Back and Forth on POW

The crypto industry was initially concerned about a draft of the MiCA bill that included provisions banning POW cryptocurrencies such as Bitcoin. It then reversed course following a strong backlash, claiming it “wasn’t their intention to create a de facto Bitcoin ban”.  But then things changed, again.

In a classic last-minute insertion of dangerous far-reaching language, reminiscent of last year’s US$1.2 trillion infrastructure bill, provisions banning POW cryptocurrencies were once again inserted into draft bill.

Even though research shows that Bitcoin mining emissions are at “inconsequential levels”, policymakers nonetheless felt it necessary to highlight so-called “unsustainable” crypto mining practices, a clear attempt if ever there was one at appeasing ESG stakeholders.

Crypto lawyer Jake Chervinsky had his doubts about the true intentions of lawmakers and didn’t mince his words:

Nathaniel Whittemore, host of The Breakdown podcast, suggested in his latest episode that environmental concerns are likely more about Bitcoin using energy at all:

My point is that fundamentally, the key thing that any environmental consideration of Bitcoin or proof-of-work is going to rest on, is not whether other things consume more energy, it’s whether the energy that Bitcoin does consume in the first place, is worth it.

Nathaniel Whittemore, host of The Breakdown podcast

POW Provisions Rejected 
 For Now

After the surprise inclusion of the POW provisions, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) rejected versions of the legislative package that contained a “de facto” ban on POW cryptocurrency mining by a count of 32 to 23 – with six individuals abstaining.

While commentators breathed a sigh of relief, Patrick Hansen of Unstoppable DeFi was quick to pour cold water on the notion that the battle was over:

Any chances left for the POW-ban? The groups that lost the vote have one last option. They could veto a fast-track procedure of MiCA through the trilogues and bring the discussion to the plenary of the Parliament. They need 1/10 of the votes of the EP to do so, which they have. That would bring the discussion around POW into the high-level policy arena. As we can’t predict how that would play out, it should be prevented. Even if it doesn’t change the vote on POW, it would unnecessarily delay the regulation for at least a couple of months. And even outside of this MiCA regulation, the discussion around POW-regulation is far from over. It will come back in the context of the sustainability taxonomy or in the upcoming data centre regulation.

Patrick Hansen, head of strategy & business development, Unstoppable DeFi

Hansen concluded by saying there is still “loads of work left in the month and years ahead, but today is a big political success for crypto in the EU”.

Bitcoin holders, miners and other POW cryptocurrencies might have won the battle, but clearly the war is far from over.

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Bitcoin Mining Digital Asset Mining ETFs Investing

Investors Can Now Get Exposure to Crypto Mining With Newly Launched ETF

Global investment manager VanEck has launched a Digital Assets Mining (DAM) ETF, an exchange-traded fund customised to expose investors to firms within the DAM ecosystem. The fund will not directly invest in digital assets, rather it seeks to highlight the importance of miners.

VanEck’s DAM ETF is set to put a minimum of 80 percent of total assets into crypto mining securities, with the potential to earn at least 50 percent of their revenue from DAM activity. The ETF will be tracking the MVIS digital assets mining index closely, offering a net expense ratio of 0.5 percent.

Ed Lopez, head of product management for VanEck, has a lot of time for crypto miners:

https://www.linkedin.com/in/helopez/overlay/photo/

Blockchains introduce transparency, efficiency and lower costs compared to traditional centralised databases and processes, but without miners, blockchain transactions cannot be verified and audited, making their role absolutely essential.

Ed Lopez, head of product management, VanEck

The VanEck DAM ETF follows asset manager Valkyrie’s bitcoin miners’ ETF, WGMI, a fund focusing predominantly on crypto miners using renewable energy.

Crypto Mining in the Greater Industry

Since October 2020, Aussies have been able to get increased exposure to crypto through blockchain mining investments. With local crypto trading volume increasing during the pandemic, crypto mining has offered an alternative, lower-risk method of participating in the market without losing any savings.

The crypto mining process is linked to every transaction that takes place, and it is integral to ensure miners are properly compensated for their efforts. If you’d like to understand more about the mining procedure, check out our guide to bitcoin mining.

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Bitcoin Bitcoin Mining Crypto News Cryptocurrency Law Digital Asset Mining Regulation

EU Scraps Plans to Ban Proof-of-Work Following Backlash

In what has been heralded as a victory for Bitcoin, European lawmakers have backtracked on provisions in a crypto regulation bill that would have effectively banned proof-of-work (POW) tokens, most notably Bitcoin.

European Union Parliament’s U-Turn

Following outcry among miners and the broader investment community, German outlet BTC Echo first reported that the controversial provisions of the Markets in Crypto Assets (MiCA) bill had been struck.

Just days ago, Crypto News Australia highlighted the significant impact that may result from a ban which provided that by 2025, “no crypto assets could be created, sold, or traded within the EU if they used environmentally unsustainable consensus mechanisms”.

Most construed this as a de facto ban on Bitcoin, given that by 2025 it would likely be the only digital asset of value still using POW. This is, of course, assuming that Ethereum successfully transitions to proof-of-stake, a process that is apparently well under way.

Stefan Berger, a German EU member of parliament, was tasked with driving the legislative change and took to Twitter saying:

Correct is: The paragraph is no longer in the text. The report has yet to be voted on in committee. In this vote we will then see where the majorities lie. The decision has not yet been made.

Stefan Berger, Twitter (translated)

According to Berger, the vote on MiCA was originally scheduled for February 28, but since the deletion of the offending paragraphs, the vote has been postponed for an indeterminate period.

Bitcoin Battles ESG

With the risk of China nationalising miners well and truly behind us, it’s become evident that ESG (environment, social and governance) concerns are presently one of Bitcoin’s greatest hurdles to overcome.

Even though Bitcoin consumes less than 0.05 percent of global energy, of which more than 60 percent originates from sustainable sources, the bigger challenge seems to be persuading detractors that it has any value at all.

As long as one fails to see the value of Bitcoin and the importance of POW to security and decentralisation, from their perspective the appropriate amount of energy consumption is likely zero.

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Bitcoin Mining Crypto News Digital Asset Mining

Queensland Sunshine Coast Energy Company ‘LPE’ Moves into Crypto Mining

Australian energy retailer LPE is dipping its toe into crypto mining after raising A$7.5 million to help fund its role in a sustainable-energy biohub near Bundaberg, in the Wide Bay region of Queensland.

Aerial view of the biohub near Bundaberg, Queensland. Source: LPE

The biohub, already generating electricity from biogas, hydrogen, solar and batteries, has crypto mining company Stak Mining as one of five tenants. Sunshine Coast-based LPE (Locality Planning Energy) plans to convert A$3 million of its A$5 million capital works funding into a 50 percent stake in Stak.

Should the conversion take place, LPE would receive a share of the proceeds in cash generated from crypto mining operations at the biohub, along with any additional mining operations Stak develops from its renewables-powered projects.

Deal Subject to ASX Regulatory Approvals

Before exercising its option on Stak, LPE requires regulatory approvals from the Australian Securities Exchange (ASX) relating to its change in business activities. For its part, Stak estimates that its mining operations will commence in Q3 of 2022, although it has yet to build any infrastructure on the site.

LPE chairman Justin Pettet says his company’s involvement in crypto mining is “potentially highly lucrative”, and attractive to both new and existing investors. “The ASX has already flagged that crypto mining listings on the exchange are coming this year, so our timing is perfect.”

LPE chairman Justin Pettet. Source: themercury.com.au

Just last month, a piggery near the Central Queensland town of Biloela revealed it was generating enough excess methane via its biogas plant to mine bitcoin. And in September last year, Australian multinational investment bank and financial services giant Macquarie announced a partnership with Blockstream to create a carbon-neutral bitcoin mine in the US.

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Bitcoin Mining Crypto News Digital Asset Mining Industries

Intel Set to Launch a More Energy-Efficient Crypto Mining Chip

Semiconductor giant Intel could be about to join the Bitcoin mining business with a new chip designed to make the process more efficient.

Intel is poised to unveil a new crypto mining chip at one of the foremost conferences on the advancement of chips and circuits, at next month’s International Solid-State Circuits Conference (ISSCC).

On the agenda for February 23, day four of the confab, is the Q&A of “Bonanza Mine”, an “Ultra-Low-Voltage Energy-Efficient Bitcoin Mining ASIC” which might step into the ring this year with other ASIC miners such as those provided by Bitmain and MicroBT. Application Specific Integrated Circuit (ASIC) miners are special processors designed to execute one type of workload, making them ideal for mining compared to GPUs.

Intel’s Bitcoin mining ASIC presentation set for ISSCC on February 23.

ASIC Miners Set to be a Game Changer

Details are limited but considering the focus on sustainable Bitcoin mining over recent months, the new ASIC miners could be a game-changer for the company expanding into new avenues. Bitcoin mining is becoming more prevalent all over the world; in Australia, for example, Sydney-based crypto mining company Mawson has acquired 17,352 ASIC bitcoin mining rigs.

In an interview in December, Intel’s Accelerated Computing Systems and Graphics (AXG) senior vice-president Raja Koduri hinted that the company might be working on something for the crypto industry: “Being able to do much more efficient blockchain validation at a much lower cost, [using] much lower power, is a pretty solvable problem. And we are working on that, and hopefully not too far into the future we will share some interesting hardware for that.”

Intel Could Bring Mining to the Mainstream

In general, ASIC manufacturers price their components highly since they rely on third parties to produce their chips, and miners are notorious for their supply shortages. Last year there were major shortages of GPUs due to miners snatching them up, which led US manufacturer Nvidia to implement limiting software to prevent them being used for mining.

Intel could become a significant competitor purely because of its capacity to produce a large supply of chips. By cutting the main cost of electricity, mining becomes more sustainable and affordable, thereby also increasing profits. Even on a small scale, an Australia piggery has done this by using excess methane to power its Bitcoin mining sideline.

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Blockchain Crypto News Digital Asset Mining

Decentralised WiFi Token Helium Up 81% Following First Governance Vote

Helium (HNT) is in the process of building “the world’s first peer-to-peer wireless network” by utilising blockchain technology. The community has recently started participating in its first governance vote, spurring the token price to new all-time highs.

The altcoin project Helium (HNT) has opened its first on-chain vote, allowing community members to nominate Helium Improvement Protocols (HIPs) that let the community decide on some of the project’s governance mechanisms.

The explosive price movement also follows an announcement from DISH Network late last month detailing a new partnership with Helium, stating that “DISH will be the first major carrier to utilise the Helium Network’s unique blockchain-based incentive model with customers deploying their own 5G CBRS-based hotspots”.

Helium HNT/USD price chart.

Helium (HNT) shot from a low of US$29.60 on November 4 to US$54.05 in just seven days, an explosive 81 percent rally and a 150 percent total gain over the past two weeks.

A growing number of Aussies are also helping to set up a network of Helium wireless hotspots that reward their owners in Helium Network Tokens (HNT).

What Is Helium About? 

Helium is a decentralised internet network that currently has over 300,000 hotspots worldwide. These 5G hotspots are the backbone of the network the team is trying to establish, and it also has capabilities for creating distributed IoT networks of smaller devices connected to the network.

By connecting to the Helium network, connectivity costs are a fraction of those associated with cellular without the restrictions. Unlike cellular, Helium companies never have to pay for SIM cards, worry about data caps, or be charged for overage fees since users use a p2p network and not a cellular network.

At this stage, there are only a few nodes in major cities in Australia where people generate HNT for sharing their WiFi.

Helium coverage of Australia.

By using Proof-of-Coverage, a unique work algorithm that uses radio waves to validate hotspots is providing legitimate wireless coverage, where miners get compensated for verifying network transactions, adding new blocks to the blockchain, and performing other tasks.

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Bitcoin Mining Cryptocurrency Law Digital Asset Mining

Iran Authorises 30 Mining Facilities Following Mass Seizure of Mining Rigs

Last week, Iranian authorities seized 7000 mining rigs located in the vicinity of capital city Tehran, citing unauthorised energy consumption and illegal operations.

Now, Iran seems to be clarifying that it does not want to follow China’s lead and ban crypto mining altogether – rather, the Iranian government wants to ensure crypto miners abide by the rules and do not cause undue stress to the power grid.

Limiting Consumption During Peak Hours

The abundance of crypto mining farms in Iran – and their associated intensive use of the power grid – is the result of financial sanctions imposed on the country by the US. Since Iran is forbidden from using US dollars and partially restricted from using SWIFT, the government has looked to cryptocurrencies for alternative payment methods.

In order to help local entrepreneurs find their footing, miners were offered a discount of nearly 50% on their electricity bills if they could prove the power was being used for crypto mining.

However, it appears this measure was a little too successful.

Energy Utility Threatens Shutdowns

Government research has revealed authorised crypto mining farms in Iran consume around 300 megawatts each day. However, according to Tavanir – the company that operates Iran’s power grid – illegal mining operations consume an additional 2000 megawatts a day. As a result, Tavanir has announced it will cut off power to mining facilities when the power grid is under stress.

Following crackdowns on illegal operations, 30 mining facilities have been authorised by the government as of June 27. Six of these are in Semnan province. Alborz, Zanjan, Mazandaran and East Azerbaijan provinces are also home to mining operations.

Tehran is home to one newly licensed crypto mining operation – in stark contrast to more than 180 unauthorised operations in the capital region that have been shut down during the past year.

Iran is not the only country to crack down on unauthorised mining. China – a close economic partner of Iran – has also recently called a halt.

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Bitcoin Bitcoin Mining Crypto News Digital Asset Mining

El Salvador is Planning a Huge Bitcoin Mining Operation that is “100% Eco-Friendly”

El Salvador President Nayib Bukele is planning to use a state-owned geothermal electric company to facilitate cryptocurrency mining, using geothermal energy from the country’s 20 active volcanoes. 

In a recent tweet, Bukele revealed his plan to use the country’s hundreds of megawatts of geothermal energy potential to mine Bitcoin.

The country has 644 MW of wasted energy. If harnessed, it would make the small Central American country the biggest Bitcoin mining facility in the hemisphere, while remaining 100 percent clean, according to Bukele.

The IMF Expresses Concerns

Unsurprisingly, regulatory and financial bodies globally shared their concerns about the country embracing and mining Bitcoin. The International Monetary Fund (IMF) said Bukele’s plan might raise “macroeconomic, financial, and legal issues”. However, the crypto community has embraced the move, echoing the fact that 75 percent of Salvadoreans are unbanked and have no access to traditional financial systems.

Crypto enthusiasts have also pointed out that using geothermal energy could push miners globally to move towards clean production of Bitcoin. Besides, countries like Norway and Iceland are already using hydro-electric and geothermal energy to power their mining rigs.

Other Countries Set to Follow El Salvador’s Example

El Salvador accepting Bitcoin as legal tender has been in the news in the past week – a move that surprised many in the crypto community as it has become the first country to do so. Days later, Wikipedia added Bitcoin as the country’s official currency alongside the Colón and US Dollar.

While powerful nations like China have been causing FUD in the market – in cracking down on BTC trading and mining – smaller countries like Argentina, Panama and Paraguay are now working on plans to adopt cryptocurrencies, following El Salvador’s example.

We could soon see more smaller countries and states, even cities, moving towards crypto mining as an alternative income. A recent example is Rockdale, a small town in Texas that became a mining farm soon after losing its Alcoa aluminum mine in 2019.

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Blockchain Crypto News Digital Asset Mining

Daymak is Making Electric Cars That Can Mine Cryptocurrency With Green Energy

Canadian personal Light Electric Vehicles (LEVs) manufacturer Daymak is building a unique series of electric cars dubbed “Spiritus” that can reportedly mine Bitcoin and other cryptocurrencies, according to a June 1 announcement.  

Daymak Spiritus is more than a car.

Aldo Baiocchi, President of Daymak

Even Parked Cars Will Be Able to Mine Bitcoin

As Daymak explained, Spiritus will be the first-ever electric car to incorporate a cryptocurrency wallet and mining hardware. Each electric car will function as a node on a blockchain, equipped with the company’s proprietary digital wallet and GPU miner. Spiritus will be able to mine cryptocurrencies with eco-friendly energy even when parked or plugged in. 

We envision a future where your highway tolls, your parking, and your drive-thru order will be paid directly on the fly with crypto. Your online bills and your banking can be handled through the same software platform paid in crypto.

Spiritus electric cars will be launched in the next two years and can be pre-ordered with popular digital currencies including Bitcoin, Dogecoin, Ethereum and Cardano. 

Auto Industry Slowly Warming to Crypto and Blockchain

The automobile industry has been advancing towards cryptocurrency recently, as seen with many dealerships and Tesla, which has previously supported Bitcoin payments for electric cars. However, Daymak’s announcement of Spiritus is probably the farthest an automaker has gone towards embracing the future of crypto technology.

Blockchain, the technology behind cryptocurrencies, is also being used by automakers like Volvo to trace cobalt used in car batteries.

In February this year, the founder and CEO of Elrond, Beniamin Mincu, pitched to Elon Musk how Elrond blockchain networks could improve transactions involving self-driving Tesla vehicles.

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New Chinese Investment Fund Launches To Entice Asian Institutions Into Crypto

Huobi Asset Management Launches one of Asia’s Largest Virtual Asset Funds as announced on South China Morning Post.

Huobi (Hong Kong) is a wholly-owned subsidiary of Huobi Technology Holdings Limited and is one of the largest virtual asset funds in Asia, looking to meet the growing demand for cypto based investments. Huobi leads the way in the movement of intitutional adoption into cryptocurrency for the Asian market.

Following Grayscale (US), Huobi Asset Management is aimed at professional investors, offering them a virtual assets portfolio. Huobi Asset Management’s new crypto-based funds include a BTC tracker fund, ETH tracker fund, and a multi-strategy virtual asset fund.

Huobi is the second fund manager to receive approval from the Securities and Futures Commission to issue 100% virtual asset funds. Head of Huobi Asset Management, Gillian Wu, explains how the fund could be ideal for the new type of investor, looking to enter the cryptocurrency market.

“According to the professional investors’ knowledge level and risk appetite of virtual assets, we will advise our clients to choose the fund products that best suit their needs. For institutional, especially corporate clients, they want to allocate to virtual assets through a convenient and compliant channel to achieve diversification needs. 

Our Bitcoin and Ethereum tracker fund, in the way of traditional financial products, solves the worries of clients who have to research on their own how to custody, how to account, how to audit this novel asset class and whether there are tax uncertainties, etc. At the same time, some ultra-high net worth individual clients, as well as some large virtual asset miners, who have previously been passively holding their virtual assets, started to look for options to achieve better returns through different market cycles compared to simple passive allocation, thus our active multi-strategy virtual asset fund is born.” 

Gillian Wu

The first pioneers to shine a light on investing in cryptocurrencies were individual retailers. As Bitcoin and Ethereum become more well known and widely adopted, it is only natural that major institutions turn their attention to the crypto space and adapt to follow the trend.

Huobi will offer piece of mind to serious investors, as demand grows for those looking to invest millions. Huobi’s new fund will likely enjoy the success of Grayscale’s Bitcoin Trust, which has been very well received.

Institutions Going Pro Crypto?

Below is a table of the recent cryptocurrency purchases by Institutions.

DateInvestorAmount
28 AprilNexon$100 Million
8 Apr 2021*Meitu$100 Million*
5 Apr 2021MicroStrategy$15 Million
18 Mar 2021Meitu$49 Million
12 Mar 2021*Purpose Bitcoin ETF AUM$900 Million*
12 Mar 2021MicroStrategy$15 Million
8 Mar 2021*Aker ASA$58 Million*
7 Mar 2021Meitu$40 Million
5 Mar 2021MicroStrategy$10 Million