Plan from El Salvador Bitcoin mining with volcanic energy?

Status: 10.06.2021 12:45 p.m.

Completely clean, completely renewable: El Salvador’s President Nayib Bukele plans to mine Bitcoins with the help of energy from volcanoes. This is how the country wants to get its high energy consumption under control. El Salvador wants to use geothermal energy from volcanoes for the energy-intensive mining of the crypto currency Bitcoin. President Nayib Bukele tweeted that he had commissioned the state-run geothermal electricity company LaGeo to work out a corresponding plan. The President is convinced that this is very cheap, 100 percent clean and renewable, does not generate any emissions and will develop quickly. There are more than a dozen volcanoes in El Salvador, many of which are still active.

Huge energy requirements

The immensely high energy requirement of Bitcoin mining has been discussed critically in public for a long time. The Cambridge Center for Alternative Finance (CCAF) is working on this topic and has created an index on it . The Cambridge Bitcoin Electricity Consumption Index is supposed to estimate in real time how much electricity is currently being used for mining. The data is then extrapolated to the year. The calculated value is currently around 111 terawatt hours. This corresponds roughly to the annual electricity consumption in the Netherlands. According to the Federal Environment Agency, Germany consumed around 553 terawatt hours in 2020. According to a study by Bank of America, the global Bitcoin industry emits a total of 60 million tons of CO2 annually, which corresponds to the emissions of around nine million cars.

Bitcoin as a means of payment …

A few days ago, Bukele announced that El Salvador would be the first country to introduce Bitcoin as legal tender . He expects the move to create thousands of new jobs in the Central American country. Among other things, taxes should be able to be paid in Bitcoin. Bitcoin is the most popular digital currency. It is not issued by a central bank, but created using a decentralized computer process known as mining. It is by no means clear whether it is even suitable as a means of payment.

… or as an object of speculation?

Because so far, cryptocurrencies have mainly attracted attention as speculative objects, the value of which is subject to extreme fluctuations: Bitcoin was quoted at more than $ 55,000 around May 10, and is currently around $ 36,000. If the value of part of the income is exposed to such strong fluctuations within a very short period of time, this poses a number of problems for a state budget policy. The high volatility of cryptocurrencies is also an incalculable risk for companies. The US electric car maker Tesla, for example, started in March of this year To accept Bitcoin as a means of payment for its vehicles and reversed this step a little later . As a justification, Tesla boss Elon Musk referred to the “insane” energy consumption of prospecting. But it is likely that Musk, as a businessman, at least had these price fluctuations in mind.

This hacker organization has received ransom from many victims. This shows that data ransom attacks have become a lucrative business for cybercriminals. Bitcoin is increasingly preferred by criminal organizations Earlier this month, Colonial Pipeline suffered a severe attack that forced the company to shut down nearly all of its fuel system supplying the southeastern states of the United States. The FBI confirmed the crime was DarkSide, a cybercrime organization believed to be located in Eastern Europe. Last week, it was reported that Colonial had agreed to pay $ 5 million to DarkSide (in bitcoin) for the data recovery password. Recently, the CEO of the company confirmed this information. DarkSide operates like a business. This group develops malicious code to crack and steal the target’s data, then trains partners, the partners continue to train the hackers. When hackers use this malicious code to carry out successful missions, DarkSide will receive a percentage of those successful attacks. In March 2021, when it announced a new software that can crack data faster than before, DarkSide even released a press release and invited reporters to interview. Hackers often demand ransom in virtual currency. London-based blockchain analytics firm Elliptic has identified a bitcoin wallet that DarkSide uses to receive ransoms from victims. On May 14, London-based blockchain analytics firm Elliptic said it had identified a bitcoin wallet used by DarkSide to collect ransoms from victims. That same day, Intel 471 security researchers said DarkSide closed after losing access to its servers and when the organization’s virtual currency wallets were empty. According to Elliptic, DarkSide and other affiliates of this organization have collected at least $90 million in bitcoin ransoms, and they receive funds through 47 different digital wallets. “To our knowledge, this analysis includes all payments to DarkSide,” said Tom Robinson, Elliptic co-founder and chief scientist. However, there may be other undetected transactions, so this $90 million figure should be considered the lowest limit.” Also according to Elliptic’s research, DarkSide’s bitcoin wallet was holding $5.3 million in cryptocurrency before it was all withdrawn last week. There are some rumors that these bitcoins have been seized by the US government. Of the $90 million ransom, $15.5 million went to the developers of DarkSide and $74.7 million to affiliates. Much of that is being sent to cryptocurrency exchanges and thereby converted into fiat. Bitcoin is increasingly preferred by criminal organizations as crypto traders do not reveal their identities. However, because the digital ledger that underpins bitcoin is public, researchers can keep track of where these funds are going.

“BlockFi has always had provisions for loss in accordance with its accounting policy. This is part of the provision so it doesn’t have a big impact on the equity or operation of the platform,” Prince said that the mis-transfer problem has been fixed dress. BlockFi also developed additional measures to prevent a similar situation from happening in the future. A BlockFi user received 701 Bitcoins due to the crash. Screenshots. BlockFi’s Twitter page states that some participants in the promotion may “see incorrect bonuses in transaction history”. Those withdrawing to cold wallets were emailed by BlockFi asking to send their funds back. Share with CoinDesk , a BlockFi user said he withdrew a large amount of Bitcoin received from BlockFi to a cold wallet, claiming that this was a reward of a promotion. After realizing the problem amount, he requested to cancel the withdrawal. However, it is not clear why the Bitcoins are still withdrawn to cold wallets. The next day, this user received emails and calls from BlockFi, threatening to get legal intervention if the money was not returned. On the Internet, many BlockFi users have shared images of receiving large Bitcoins from “falling from the sky”. “I thought BlockFi was going to transfer 701 USD but mistaken it for 701 Bitcoin”, Twitter user Ric Burton share. Another said that he received 5 Bitcoins but was also asked to return it by BlockFi. “I got to be a millionaire in 3 hours”, account nebrijo comment, with a picture of an account balance of more than $1.5 million before transferring the mistakenly sent Bitcoin to BlockFi. According to the Bloomberg , BlockFi is a platform that provides lending and trading services for cryptocurrencies. Despite having just experienced a sharp price crash, the world’s most valuable cryptocurrency is trading at around $40,000, as of May 21. BlockFi’s large Bitcoin transfer by mistake is reminiscent of last year’s incident, when Citibank mistakenly transferred $900 million to several creditors of cosmetics firm Revlon, instead of just paying $8 million in interest. Expensive price for Bitcoin mining Since the advent of cryptocurrencies, the amount of electricity required for mining has increased significantly. This leads experts to believe that cryptocurrency mining is not environmentally friendly.

The importance of Chinese mining farms is evident in the accident at a coal mine in Xinjiang. This incident caused nearly a third of the world’s crypto mining network to be interrupted over the weekend. Bitcoin price has also plummeted since April 18 and there is no sign of recovery. The incident caused Bitcoin’s mining capacity to decline According to the Fortune A coal mine in Ho Do Bich district, Xinjiang was overflowed, trapping 21 workers inside on April 11. The workers were then rescued. A week later, the coal mine is still shut down to check the safety of workers, so it is not able to supply enough fuel for power plants in the region. The coal mine incident in Xinjiang left more than 20 workers trapped. Photo: AP. This causes Bitcoin mining farms, which consume huge amounts of electricity, to stop working. At the end of the following week, April 17-18, the capacity of the global Bitcoin network dramatically plummeted. Bitcoin’s difficulty to “mine”, calculated as the total algorithmic capacity (also known as hashrate) of the computers on the network, has dropped sharply from over 160 EH / s to around 130 EH / s. By the morning of April 23, this number was still around 133 EH / s. Before the incident, experts all considered China to play an important role in the Bitcoin mining network. However, the flood showed that almost all the miners in Xinjiang are located in Ho Do Bich district and surrounding areas, depending on the fuel source of the same coal mine. “This accident confirmed the predictions, possibly even confirming that the mining capital in Xinjiang is much smaller than previously thought. It shows China’s dominance in Bitcoin mining. , and concerns about security, “said Alex de Vries, an economist specializing in tracking the use of Bitcoin mining energy. Inner Mongolia, China, has banned Bitcoin mining since May to minimize the environmental impact. Photo: Getty. The incident also showed that the energy source for Bitcoin mining still mainly comes from coal. Not only in China, in many regions in the US such as New York state or Kentucky, mining farm owners also take advantage of old factories to get cheap electricity. This is Bitcoin’s danger to the environment. The bad side of Bitcoin “Carbon footprint”, the term for the amount of CO2 emitted when mining Bitcoin is about to exceed the emissions of the whole country of Australia and greater than the technology giants like Facebook, Google or Microsoft combined. The negative impact on the environment is the ugly face of Bitcoin. In addition to Xinjiang, Bitcoin is also banned from mining in Inner Mongolia, China from May to here because of environmental impact. It is also the region that contributes about 4% of the world’s Bitcoin mining capacity. Of course, there are Bitcoin farms that use renewable energy as well. However, this power source is considered to be unstable, difficult to ensure that it runs 24/7. “Miners often do not like renewable energy because they are difficult to guarantee to run 24 hours a day. Green energy is not suitable for Bitcoin,” said de Vries. Much of Bitcoin is mined on farms in China. Photo: Bloomberg. In the Bitcoin mining game, miners need to take full advantage, because only those who complete the first series of computations will be rewarded with Bitcoin. The number of miners joining the network more and more, so the reward received Bitcoin is less and less. Miners therefore need the machine to run continuously. Mr. de Vries said that about 70% of Bitcoin created using fossil energy, of which the majority is coal. Bitcoin’s price increase almost 6 times in the past 7 months has caused more and more miners to enter the game. The total amount of electricity that the Bitcoin mining network uses is about 2% of the US, and 10% of Russia’s electricity. The numbers all point to Bitcoin’s environmental impact. However, this ugly truth seems to have been ignored by celebrities like Elon Musk in praising Bitcoin.