What Does China’s Full Ban of Cryptocurrency Exchanges Mean for Bitcoin? 29 655

The rumors were true. China finally announced its full ban on cryptocurrency exchanges yesterday, causing catastrophic landslides in Bitcoin trading value. Hitting a new low on Monday February 5th, Bitcoin dropped below $7,000 for the first time since November 2017, losing approximately 60 percent of its value in just three months.

It wasn’t only Bitcoin that took a bashing, either. Ethereum and Ripple were also heavily affected and other cryptocurrencies as well, losing a collective total of $60 billion in just 24 hours. So, what does this mean for the future of Bitcoin, and could this be the start of the bursting bubble that so many analysts predicted?

China’s Ban on Bitcoin

You have to admit, it doesn’t look good on paper. While the threat of China banning digital currencies has long been looming overhead, the crackdown previously only applied to domestic cryptocurrency exchanges. But yesterday, the central bank announced its intention to block all cryptocurrency trading platforms, including the issuing of ICOs. Moreover, China’s infamous “great firewall” will block all cryptocurrency websites as well.

It’s still unclear whether India will follow suit, although the country’s Finance Minister, Arun Jaitley reported that the country aimed to “eliminate” usage of all digital currencies. With nothing certain as of yet, and lack of government action, a full ban is not anticipated any time soon. Moreover, India is currently a minor player in the cryptocurrency world. There are greater, more pressing threats to deal with.

The Banks

One of the issues that has repeatedly hampered the widespread adoption of Bitcoin is the sticky matter of regulation. The success of the digital currency is largely tied into the banks’ reaction to it, and now they have dealt Bitcoin a further blow by starting to restrict the use of their services for buying cryptocurrencies.

Lloyds Banking Group, a major UK lender, said on Monday that people would no longer be able to buy cryptocurrencies with their credit cards. This announcement comes on the back of US banks, J.P Morgan Chase, Citigroup and Bank of America, who implemented the same policy the week before.

Tether

With all eyes on Bitcoin, Ethereum and Ripple, cryptocurrency, Tether, may have fallen under the radar, but it’s a silent and potentially deadly threat. What’s so special about Tether? Tether tokens are tied to the dollar, with one token equalling one dollar. And the largest exchange in the world, Bitfinex, has been steadily increasing supplies of Tether in the last few months.

But with the 1:1 ratio, Bitfinex has been accused of not having enough reserves of dollars to issue Tether tokens. Moreover, because of Tether’s dollar value, the price of cryptocurrencies like Bitcoin could have been inflated, as investors have been buying with Tether and not with actual US dollars. What does all this mean? If the accusations are true and Bitfinex doesn’t have the dollar reserve to support the amount of Tether tokens in existence, things could get pretty ugly.

Is There Any Hope For Bitcoin on The Horizon?

That depends what angle you examine it from. There are still some analysts positive about the ailing cryptocurrency future. Wall Street’s Tom Lee, the only major strategist to issue Bitcoin price targets, commented that this major low for Bitcoin represents the biggest buying opportunity of this year. He further issued a report maintaining his target price of $25,000 for Bitcoin.

Saxo Bank analyst, known for predicting the crypto rally at the start of 2017, Kay Van-Petersen also told CNBC that he believed Bitcoin could still hit between $50,000 and $100,000 this year.

Whether these figures are to be believed or not remains to be seen, but one thing is for sure. Crypto investors and ICOs will be biting their nails around the globe as the roller coaster gets set for further intense highs and lows.

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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 2,182 10511

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 9461

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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