Weekly Roundup: BTC Flat, Consensus Fails to Deliver, Electricity Woes Again at the Forefront
In this week’s edition, we review what happened (and didn’t happen) at the prestigious Consensus conferences that took place in New York City last week, review the current state Bitcoin Network’s energy consumption, and reflect on the impact that bitcoin is finally beginning to have on the corporate world, nearly nine and a half years after its quiet launch.
Quiet Discord at NYC’s Consensus Conferences
The price of BTC remained relatively flat over the week, dipping below $8000 on Friday for the first time since mid April. A series of expensive-ticketed Consensus: 2018 bitcoin conferences in New York City failed to spark a highly-anticipated bitcoin rally, although it did bring a series of rented Lamborghinis that were also mocked by the surrounding press. The reasons for the widely-held perception that Consensus was a failure include the following:
- Exorbitant ticket fees that priced out the masses, aka the people that blockchain technology was designed to help.
- The lack of acceptance of crypto for tickets or any conference amenities.
- A general disconnect between conference speakers, who insisted on hyping the materialistic benefits of well-timed (or lucky) cryptocurrency investments, and conference attendees, who were more interested in hearing about solutions to scalability and merchant adoption problems.
No they hate us for show offs! This was not what crypto was invented. Crypto is to empower the average joe not to make joe go crazy for Lambos. They are off track.
— LakhTek (@LakhTek) May 14, 2018
Meanwhile during the week, Twitter CEO Jack Dorsey doubled-down on his bitcoin bullishness, saying that not only will the first internet-native currency likely be bitcoin, but that cryptocurrencies in general will eventually replace all traditional forms of currency as civilizations furthers itself along into an overwhelmingly digital age. Unlike most of the other members of the 1% present at Consensus, Dorsey is a proponent of Satoshi Nakamoto’s original vision for bitcoin: a truly decentralized system of finance meant to re-empower the average citizen, no longer leaving them beholden to unfavorable rules and terms set by the N.Y.-dominated finance industry that rose to prominence in the late 20th and early 21st centuries.
Bitcoin Mining Power Consumption Becoming a Real Problem — Or is it?
A new study was released over the week which pointed to the possibility that the Bitcoin Network would soon be consuming as much energy as the entire country of Austria by the end of the year, a nation of 8.8 million. The report states:
These methods tell us that the Bitcoin network consumes at least 2.55 GW of electricity currently, and that it could reach a consumption of 7.67 GW in the future, making it comparable with countries such as Ireland (3.1 GW) and Austria (8.2 GW).
Indeed, this demand is predicted to steadily increase into the foreseeable future; so much so that another estimate the Bitcoin Network is on track to consume 5% of the world’s total electricity supply in the next few years (it currently consumes about 0.5% — still a massive amount). At this great a demand, the entire network could falter altogether in less than 2 years time, either through being illegalized by a mass consortium of countries or ditched on the wayside for a more environmentally-friendly alternative.
The next bitcoin Reward Halving will take place on May 7th, 2020, which will reduce the mining reward to 6.25 bitcoins per block. If mining ASICs are not developed with better efficiency by then, it is estimated that bitcoin mining would theoretically become an unsustainable practice.
Not everybody concurs with such dire predictions about the short-lived future of bitcoin. Other analysts are calling them overblown and sensationalist, fearmongering tactics meant to generate hype with the sole purpose of receiving intention. Previous figures generated by the author of the study had been labeled an overestimation, which could be mitigated by an increase in the world’s energy supply. Regardless, as the network difficulty for mining a bitcoin block steadily increases over time, so must the amount of electricity required in order to mine the block, as more processing power must be dedicated to discovering an incoming block’s nonce, or cryptographic solution.
Also in the News
- Facebook is the latest in a trend of major corporations to toy with the idea of adopting blockchain technology and perhaps even its own cryptocurrency, slightly loosening their ban on blockchain tech-related advertisements in the process. The news comes on the heels of an announcement that cell phone manufacturer HTC may begin putting a cryptocurrency wallet in their phones as a factory default application.
- Exchange titans Coinbase and Kraken both announced plans to further the legal compliance of their businesses; the former by obtaining a banking license and the latter by pursuing SEC registration. This would allow both exchanges to increase the number of services they can legally offer their customer base, putting them on par with traditional banking operations and financial service providers. Even the famed Winklevoss Twins are seeking to increase their corporatization after successful application of New York-based licenses that would allow them to offer new cryptocurrency services.
- Also on Wall Street (and we’d like to think it was due to our previous Roundup article), Goldman Sachs long-standing CEO Lloyd Blankfein will be stepping down from his position, owing his departure to his firm’s complex relationship with bitcoin. Probably not coincidentally, Goldman Sachs also announced they had plans to develop their own “digital USD” coin in the near future in an overt attempt to lure big-monied investors caught up in the blockchain craze.
- Being the first country in the world to do so, the government of China released their ranking of cryptocurrencies, placing bitcoin in a confounding 13th place.
- In an idea that combines several cutting-edge technologies into one, plans for a nation of floating houses in the middle of the Pacific Ocean made headlines last week, to be funded by proceeds raised by an ICO process for a coin which would be the central currency of the libertarian nation. The country’s founder states that the main selling point for attracting citizens would be a highly de-regulated tax structure, designed to draw in tech entrepreneurs and those otherwise looking to escape the burden of paying tax rates deemed inflated or otherwise unfair.