BT Daily News: Russia Becomes World’s Second Biggest Crypto Miner
1. Russia Becomes World’s Second Biggest Crypto Miner
Russia has become the world’s second-largest cryptocurrency mining country this year, the Kommersant business daily reported on Friday, citing Bitriver, Russia’s largest bitcoin mining provider.While the United States remains by far the world's largest crypto miner, boasting 3-4 gigawatts of mining capacity, Russia’s generating capacity reached 1 gigawatt in January-March 2023.
In taking second place for the first time, Russia took a spot previously occupied by Kazakhstan, which introduced restrictions on crypto mining activities in 2022 and now ranks ninth, Kommersant cited Bitriver as saying.
China, which banned crypto mining in 2021, did not make Bitriver’s top 10 at all.
Bitcoin use is limited in Russia due to restrictive laws on cryptocurrencies, including President Vladimir Putin’s 2020 law on digital financial assets, which legalized cryptocurrencies but banned paying for goods and services with them.
Still, cryptocurrencies have been linked to Russia’s sanctions evasion, with the United States blacklisting a bitcoin and an ether address in February that it said may have been involved in Russian defense equipment sales abroad.
The European Union imposed a total ban on carrying out cryptocurrency transactions with Russian citizens and anyone resident in the country as part of its eighth round of sanctions introduced last year.
2. U.S. Bitcoin Corp. Settles With Niagara Falls City to Resume Bitcoin Mining
U.S. Bitcoin Corp has settled with the city of Niagara Falls in New York state, in a deal that will allow the mining firm to resume its bitcoin mining operations.The 50-megawatt (MW) facility has been contentious due to noise complaints from residents. In early March, State Supreme Court judge Edward Pace ordered USBTC to stop operations at the Buffalo Ave. site and pay a $1 million fine.
The deal was passed by a 4-1 vote, according to a U.S. Bitcoin Corp spokesperson.
A company spokesperson confirmed the site, which has a computing power capacity of 1.1 exahashes/second (EH/s) has been shut down since then. Prior to the shutdown, USBTC said that 0.4 EH/s of self-mining was running at the site.
The deal expected to be voted on Wednesday by the city council will limit noise pollution from the facility to 65 decibels. Accommodations will include a "noise dampening wall" and an "independent monitor" that will keep tabs on the noise levels. USBTC will also have to comply with new zoning laws, which pertain to developing or buying renewable energy on par with their energy consumption; it will also pay $150,000 in compliance fees over the next 30 days.
The Buffalo Ave. facility is the smallest of four that USBTC operates. It also gained access to three more facilities during the Compute North bankruptcy proceedings; two of those it manages in conjunction with Generate Capital.
The firm's access to 680 MW of energy capacity after the Compute North bankruptcy garnered the attention of Canadian Hut 8 Mining (HUT), and the two are now going through an all-stock merger of equals. Hut 8, known for its strategy of retaining its produced bitcoin, has begun selling some its holdings to fund operations.
Asked as to whether the Niagara Falls issue could affect the merger, Erin Dermer, senior vice president of communications and culture at Hut 8, declined to comment.
When CoinDesk visited the town last year while the USBTC site was running, a humming could be heard in the vicinity. However, residents that CoinDesk spoke to were divided as to whether it was a problem.
A health worker at a rehab clinic less than a third of a mile from the site told CoinDesk that the noise it wasn't really an issue, except for once when they were doing counselling sessions outdoors. Another resident in the immediate vicinity said that at times it is annoying, but most of the time "it is not that bad."
But some who live further away have claimed that the facility is causing them to lose sleep.
Beverley, who lives about a quarter of a mile away, said she "hasn't slept since it started" operations and that to her, it feels like "living in an airport." Bryan Maacks, who lives about half a mile away, said to him the particular vibration is a constant throbbing hum that he cannot avoid in his own home, even with earplugs.
3. Report On the Impact Of Bitcoin Mining Ignites Debate: Is It Myth Or Fact?
Bitcoin skeptics are questioning a report released by the Environmental Working Group (EWG) on Wednesday detailing how Bitcoin miners are “polluting” communities across the United States.The non-profit group, through six case studies, claims to have documented how the mining industry interferes in the daily lives of Americans through air, water and noise pollution.
“The incessant noise generated by mining operations continues 24 hours a day, seven days a week, and is driving nearby residents to despair,” the official said. report. One of the case studies followed a married couple in Cook County, Georgia, whose hearing has allegedly been “impaired” due to one of Blockstream’s Bitcoin mining facilities nearby.
Other case study focused on Stronghold Digital Mining in Venango Country, Pennsylvania. The company burns coal waste to power Bitcoin mining machines and then spreads the remaining coal ash on areas of land to be used as fertilizer. EWG argued that the toxic contaminants present in that ash fertilizer are carried into nearby rivers and streams when it rains, contaminating the water.
“What these miners have in common is their use of proof-of-work, which is wasteful by design,” the report stated, calling it “highly inefficient” requiring a large amount of “fossil fuel generated electricity” to operate.
Proof of Work is a consensus mechanism used by Bitcoin and other decentralized blockchains that allows all network participants to agree on the sequential order of transactions, while also non-subjectively issuing new coins. Powerful computers compete in a race to build the next block of Bitcoin transactions by solving a complex math problem and are rewarded with new BTC for solving it first.
Many modern blockchains use an alternative consensus mechanism called proof-of-stake, which uses cryptocurrency instead of power to secure the network. EWG has long called for Bitcoin developers to similarly change their code and reduce their power consumption, backing another well-funded environmental campaign to do so.
However, the prominent Bitcoin developers are not at all interested in such a risky protocol change. Blockstream CEO (and presumed Bitcoin creator) Adam Back argues that the energy costs to produce new Bitcoin are necessary for it to function as money.
“People buy digital gold to protect themselves from inflation and monetary erosion. Central banks buy physical gold for similar reasons at a record rate,” he told Decrypt via Twitter. “Gold is also expensive to mine in an analogous way, and that too is inherent in sound money.”
When EWG asked about Blockstream’s noise pollution, Blockstream’s mining director Chris Cook described the facility as “barely audible… crickets are definitely louder.”
Veteran Bitcoin developer Luke Dash Jr. also questioned Bitcoin as a source of environmental damage, arguing that the fiat currency system is much more damaging.
“Proof of Work (PoW) is actually good for the environment,” he told Decrypt via direct message. “It makes clean energy, such as solar, viable on its own, where previously it generally required fossil fuels to supplement it.”
Meanwhile, the developer called proof of stake a “scam”, referencing a rehearsal of 2015 describing the system as “unfeasible”.
“By relying solely on resources within the system, proof-of-stake cannot be used to form a distributed consensus, as it relies on the very story it tries to form to apply loss of value,” said report author Andrew Poelstra.