According to the European Union, The Bubble’s About to Burst 4 1116

It’s been a choppy few weeks for crypto since the sharp rise and fall of Bitcoin value in December last year. And if that wasn’t bad enough, things have steadily gotten worse, with the China full cryptocurrency ban and large banks, including Citi and Bank of America, refusing to allow clients to buy crypto with their credit cards.

Next up for the struggling digital currency, is a scathing attack from the European Union, averting investors of Bitcoin and other digital currencies that the bubble will soon burst and that they could lose most, or even all of their money.

Bitcoin Value Sinks Like a Stone

Famous for its extreme price volatility, Bitcoin’s value rose by more than 1000 percent throughout 2017, causing a huge stir in the crypto world and awakening interest from the public at large. But despite UBS Chairman and other industry experts warning about the risk, saying Bitcoin is “not an investment we would advise,” many have still jumped on board.

Facing further possible government bans around the world, or at least, some fairly heavy regulation, Bitcoin’s value has sunk like a stone since the start of this year, with the price collapse being described as a “bloodbath” and a “cryptopocalypse.”

The Market is Rife with Misinformation

The European Union’s Banking, Securities and Insurance Watchdog yesterday said that the cryptocurrency and ICO world is ripe with misinformation. They added that the advice given is “in most cases incomplete, difficult to understand, does not properly disclose the risks… and may therefore be misleading.”

“Virtual currencies such as Bitcoin, are subject to extreme price volatility and have shown clear signs of a pricing bubble, and consumers buying VCs should be aware that there is a high risk that they will lose a large amount, or even all, of the money invested,” the warning stated.

This warning comes out at the same time that an article in China’s Beijing News reported a rise in professional copywriters offering their services to write ICO whitepapers, which may include fabricated information.

Despite the domestic ban on ICOs in September of last year and the full ban on international cryptocurrency trading earlier this month, keyword searches using “blockchain,” “ICO,” and “white paper,” bring up numerous stores that offer white paper copywriting and fundraising consultancy services for ICOs.

White paper copywriting is sold for around $600 and may include false claims about the viability and credibility of a project.

A Magnet for Unlawful Behavior

This examination into cryptocurrency investing was requested by Valdis Dombrovskis, Vice-President of the European Commission, amidst concerns that digital currencies could be used as a “token for unlawful behavior.”  

With European governments now turning a serious eye to what’s going on in the crypto word, that may spell out bad news for Bitcoin. Just last week, France and Germany requested that cryptocurrency regulation be a topic of discussion at the next Group of 20 Economies (G20). They are anxious to assess the long term viability of cryptocurrency, looking beyond the current rollercoaster markets.

Too Little, Too Late?

If the warning is to be heeded and the cryptocurrency bubble will soon burst, the warning comes overdue for many unfortunate investors. Markus Ferber, Vice Chair of the European Parliament’s Economic Affairs Committee, pleaded for regulation, just as with any financial currency.

He said, ‘I expect the Commission to take the warnings by the three supervisory authorities seriously and issue a legislative proposal in this regard as soon as possible.”

But imposing regulation on these untamed markets will be challenging at best. Regulators will be looking to strike a healthy balance between allowing for market innovation and growth while protecting consumers and preventing money laundering and other criminal activity.

Bitcoin, Litecoin, Ripple and Ethereum are not issued by any central bank, neither are exchange rates regulated by EU law. That means that European investors won’t be covered by any type of national investment scheme insurance should the apocalypse come.

Things certainly don’t look good right now for crypto, with major players on the scene including the Wolf of Wall Street and Goldman Sachs claiming the Bitcoin bubble will be bigger than the dot-com era.

But then again, government bodies and financial institutions have been wrong about many an economic crash in the past. Perhaps this is just a sea change, rather than a tidal wave for digital money.

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Christina is a technology and business communicator who has worked with high profile ICOs and blockchain influencers to break industry news.


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Bitcoin Uses As Much Energy As Austria, Could Add 2°C to Earth’s Atmosphere 2,187 14286

Bitcoin mining, it turns out, damages the earth more than more traditional environmental assaults like actual mineral mining.

According to a paper published Monday in Nature Sustainability, the power-hungry Bitcoin mining process consumes more than triple the amount of energy needed to mine the equivalent amount of gold, more than quadruple what’s needed for copper, and more than double what it takes to mine platinum.

Other coins didn’t fare much better. By their measurements, Ethereum and Litecoin consume 7 megajoules of electricity to produce the equivalent of $1, the same energy expenditure as copper mining but more than that of platinum or gold. Monero eats up 14 megajoules to produce $1.

Naturally, these measurements refer to the notoriously variable dollar valuations of such tokens. “While the market prices of the coins are quite volatile,” write researchers Max J. Krause and Thabet Tolaymat, “the network hashrates for three of the four cryptocurrencies have trended consistently upward, suggesting that energy requirements will continue to increase.”

Bitcoin’s Growing Electricity Bill is Bigger Than Some Countries

We’ve long known that Bitcoin is unsustainable. In a 2015 article for Motherboard, Christopher Malmo pointed out that a single Bitcoin transaction used 5,033 times as much energy as a Visa swipe, and could power 1.5 American homes for a day.

The electricity used to crunch Bitcoin code—and its environmental cost—has been growing with its increasing popularity. Digiconomist’s Bitcoin Energy Consumption Index shows Bitcoin currently consuming 73.12 terawatt hours (or 263.232 billion megajoules) of electricity annually. To put that in context, it’s comparable to the amount of energy it takes to power Austria for a year.

That means there are 175ish countries on earth using less energy than Bitcoin (to say nothing of crypto on the whole), while 66 countries consume less energy per capita than one Bitcoin transaction (it takes 94 thousand kilowatt hours of electricity to mine a single Bitcoin).

Iceland, a major hub of Bitcoin mining farms, spends nearly as much energy on Bitcoin as it does powering its residential homes. In this case, the damage is mitigated because most of Iceland’s power comes from renewable energy.

Canada’s Bitcoin emissions are also on the lower end due to renewable energy sources. They’re using this to court mining companies from China, where mining emissions are about four times that of Canada’s. Montreal International attracts foreign investment by calling Quebec the land of “green bitcoin”. This has caught the eye of some Chinese mining companies looking to go overseas as the Chinese government has discouraged expansion and shut down some mining operations altogether.

Depending on Bitcoin’s growth, some have projected that it could use as much energy as the entire world by 2020.

Digital Currency Has a Real Carbon Footprint

Krause’s and Tolaymat’s research reminds us of the sobering reality that all this invisible wealth has real world costs.

For the 30 months they measured between January 2016 and June 2018, they estimate their four featured tokens collectively belched out at least 3 million tons of CO2 emissions, possibly as much as 15 million tons.

These findings follow another study, published last month, which determined Bitcoin alone could add two degrees Celcius to global warming within the next three decades. That’s enough to raise ocean acidity by 29 percent.

Solving Bitcoin’s Energy Consumption Crisis

So what is the solution? If the world were to switch to 100 percent renewable energy overnight, the problem would be moot. But we can’t hold our breath for that. There could be ways of incentivizing clean energy so greener mines reap more coins, or of implementing clean energy in other ways.

It’s also possible to adopt less computationally intensive mining algorithms so the mining computers don’t guzzle as much juice. This would disappoint a lot of old school Bitcoiners who have invested in hardware, but their feelings don’t really outweigh that 2 degrees celcius that everyone will have to live with (or die by).

Whatever the best solution turns out to be, something needs to change soon. Bitcoin is growing up, and it’s time for it to mature into something more sustainable.

Kenya Looks to Blockchain for Affordable Housing Project 9 11442

The “Silicon Savannah” is moving deeper in direction of tech. The Kenyan government has announced a plan to manage the property allocation and funding of 500,000 affordable housing units with blockchain technology.

The units, which the government aims to build by 2022, will be set aside for households with an annual income below 100,000 Kenyan Shillings, about $990 USD. The World Bank estimates Kenya’s gross national income per capita at $1,290, according to Business Daily.

Blockchain will help ensure that the affordable housing is in fact going to those who fall below the average income bracket. Land title fraud has caused problems for Kenyans, as land grabbers target homes and even schools for illegal sales and development. Blockchain’s ability to store verifiable proof of title could help safeguard against fraudsters.

“Kenya will use blockchain technology to ensure the rightful owners live in government funded housing projects,” said Principal Secretary of Housing and Urban Development Charles Hinga, speaking with the World Bank on Monday.

Hinga said the plan will be financed by the National Housing Fund, which will raise over $59.5 million per month to get the project underway. But Cabinet Secretary for Transport, Infrastructure, Housing and Urban Development James Macharia said it will take $31.7 billion to build a million homes, each of which will cost between $3,000 and $30,000. Macharia called for support from private sector financing.

Under the financing plan, working Kenyans will contribute 1.5 percent of their salary, which will be matched by their employers. “On affordable housing one should not spend more than 30% of their disposable income for housing,” Hinga tweeted yesterday. “Anything above 30% is not affordable.”

A Trustless Relationship Between People and Government

The initiative represents a considerable push to solve housing and title problems for the nation’s lower income families. But how will the government decide to whom the housing units will go? With so much talk about financing underway, people are already calling on the government to outline a plan for how they’ll distribute the affordable housing units.

The government will need to deliver the housing projects in a time when, Hinga acknowledges, the public is skeptical. Earlier this year $78 million went missing in a corruption scandal involving the National Youth Services. Where there is little trust between the people and their government, Kenya hopes to establish transparency through the blockchain’s distributed ledger system.

Kenya’s Move Toward Tech

In March, Kenya’s Ministry of Information, Communications and Technology appointed a blockchain taskforce to explore the ways the nation could use blockchain technology in the public and private sectors. They called it the Distributed Ledgers and Artificial Intelligence taskforce, and by September its chairman, Bitange Ndemo, was calling on the government to tokenize the economy.

Ndemo also proposed government implementation of blockchain to certify the authenticity of retail goods, so consumers can be sure of where their food is coming from, for example.

Governor of Kenya’s central bank Patrick Njoroge has also voiced support for the use of blockchain technology to strengthen service delivery, although he’s opposed the use of tokens and digital currencies.

But the affordable housing initiative could be the Kenyan government’s first real world implementation of the blockchain.

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