Welcome to Chain Letter! Great to have you. Here’s what’s new in the world of blockchains and cryptocurrencies. | | “Ethereum Christmas” is upon us. This week I am joining the thousands of Ethereum developers and entrepreneurs who have descended upon Prague for Devcon, the annual conference sponsored by the Ethereum Foundation—or, as core developer Lane Rettig thinks of it: Ethereum Christmas. Some of the most lively discussions this week will revolve around questions of scale (when will Ethereum finally be ready to execute on its long-planned transition to a new, more energy-efficient consensus mechanism based on proof-of-stake?) and governance (how can the community work together more efficiently to make decisions and accomplish goals?). If you are here too and would like a chat—send me an email or a Twitter DM. | | Nobody knows how much electricity Bitcoin is using now, or will use in the future. A new analysis in Nature Climate Change makes the most dramatic claim yet regarding Bitcoin’s growing environmental impact: that carbon dioxide emissions from Bitcoin mining alone could be enough to increase global temperatures by two degrees Celsius within just a couple decades. The paper has drawn sharp rebukes from Bitcoin aficionados and energy experts who have criticized its assumptions and methodology. But let’s face it: Bitcoin is using a massive amount of electricity—and we’re still lacking the data to properly assess its scale and impact.
To arrive at their conclusion, the authors of the new paper first determined the electricity consumption of Bitcoin mining rigs, and the emissions from electricity production in the countries where those machines are located (commonly in China, where coal is particularly cheap). Then, they looked at the rate of adoption of broadly used technologies like credit cards, electricity, and dishwashers. They found that if Bitcoin sees adoption at a pace that is the average of those rates, it will cause catastrophic global warming by the early 2030s.
Critics argue that extrapolating Bitcoin’s electricity use based on today’s data doesn’t make sense, since the mining process is designed to change over time. Many observers believe technological innovations, like the lightning network, will make Bitcoin more energy-efficient. But besides that, the growth of Bitcoin mining will depend on additional factors, including Bitcoin’s price, the cost of electricity, the efficiency of the mining rigs, and government policies, points out Jonathan Koomey, a researcher who has written extensively about the electricity use of information technologies.
It’s hard enough knowing how much electricity Bitcoin is using today, writes Koomey, since the best estimates don’t include much, if any, data from real facilities. “If we’re to get a better handle on Bitcoin electricity use, such field studies and data are vital." | | Sweden’s central bank is getting (even more) serious about launching a digital currency. We’ve known for a while that Riksbank has been considering creating its own form of electronic money, and has set a deadline of 2019 for determining how to pull it off from a technical standpoint. Now, the bank says it is time to start building and testing an “e-Krona” that could be spent using a card or mobile app, and would have traceable transactions. The bank’s motivation is the rapid rise of private apps to transfer money around as people in Sweden increasingly ditch cash. The bank is worried that if there’s no state-backed rival then people’s trust in the Swedish monetary system will be eroded. There are also fears that certain groups—those who don’t have access to the private apps or who prefer to use cash—will be put at a disadvantage if there is no state alternative. In this context, an e-Krona “could ensure that the general public still has access to a state-guaranteed means of payment,” according to the bank. | | Loose Change Fill your pockets with these newsy tidbits. | | | Ripple has hired Amir Sarhangi, who had been heading up Google’s messaging technology development. (Reuters) | | | | Zcash has upgraded its software via a hard fork, which the company behind the currency says will make transactions 90 percent quicker and require 97 percent less memory. (CoinDesk) | | | | A small Canadian crypto exchange says all of its money has been stolen, but the mysterious disappearance (and then reappearance) of its Internet presence has caused confusion and suspicion over what actually happened. (Finance Magnates) | | | | Japan says digital coins pegged to national currencies are not cryptocurrencies, at least from a regulatory standpoint. (ETHNews) | | | | | | The Money Quote “The only thing that a blockchain brought to the world that was not possible before a blockchain is that for the first time we have a computer system that is sovereign, and that is autonomous.” —Wences Casares, founder of Xapo, which stores its clients’ cryptocurrency keys in high-security vaults located all over the world. Casares, one of Bitcoin’s biggest early promoters, told Bloomberg that cryptocurrency is an “intellectual experiment” that could still fail. | | | |
