Latest news with #CambridgeCentreforAlternativeFinance
Business Mayor
29-04-2025
- Business
- Business Mayor
Bitcoin Mining Centralization in the U.S.: A New Risk for the Industry?
A groundbreaking study from the Cambridge Centre for Alternative Finance (CCAF) claims that the United States now dominates Bitcoin mining, controlling as much as 75.4% of the global hashing power. 'The U.S. has solidified its position as the largest global mining hub (75.4% of reported activity),' the CCAF reports, based on a survey of 49 mining firms representing nearly half the Bitcoin network's hashrate. This concentration, equating to roughly 600 exahashes per second (EH/s) of the global 796 EH/s, raises a pressing concern: Is Bitcoin mining becoming dangerously centralized in the U.S., and what risks does this pose for the emerging asset's future? Howard Lutnick, U.S. Secretary of Commerce and former CEO of Cantor Fitzgerald, recently shared insights into the Trump administration's vision to position the U.S. as a Bitcoin superpower. 'It's like gold. To me. It's a commodity,' Lutnick said in an interview with Frank Corva of Bitcoin Magazine, highlighting Bitcoin's fixed supply of 21 million coins. He outlined plans to 'turbocharge' U.S. mining through the Commerce Department's Investment Accelerator, which streamlines permits for miners to build off-grid power plants. 'You can build your own power plant next to [your data center]. I mean, think about that for a second,' he said. This pro-business stance has fueled America's mining boom, but the CCAF's findings suggest a downside: centralization. For years, Bitcoiners worried about China's dominance, which peaked at 65–75% of global hashrate before its June 2021 mining ban. 'In 2019, China dominated global Bitcoin mining, accounting for 65–75% of the total Bitcoin network,' a 2025 Nature Communications study notes. When China banned mining, hashrate dispersed globally, with many operations relocating to the U.S., drawn to states with abundant energy and favorable policies. This shift caused a 50% market correction but paved the way for a 130% rise toward the end of the year, demonstrating the market's resilience. Read More Bitcoin Covenants: CHECKTEMPLATEVERIFY (BIP 119) While China's historical hashrate concentration never led to network abuse, it was a constant concern. Now, with the U.S. holding 75% of hashrate, similar risks emerge. The Trump administration is Bitcoin-friendly, but a future administration could turn hostile, leveraging centralized hashrate to control the network. Unlike China's ban, a future U.S. government might try to regulate or manipulate mining, using executive powers like sanctions to censor transactions — a threat amplified by mining's concentration. The U.S.'s federal structure offers a potential safeguard. The division of powers between states and the federal government could enable resistance to federal overreach. In states with significant mining activity, officials and the public might argue that manipulating the industry harms Bitcoin's value, impacting investors. Such resistance could preserve the network's integrity. The weakening of the U.S. monetary sanctions regime might play to our advantage. Following the 2022 seizure of Russian treasuries, nations misaligned with U.S. policy have reduced U.S. bond purchases, undermining the fiat rails abused in sanctions. The Trump administration is shifting toward tariffs to control goods rather than money flows, potentially reducing the threat of monetary censorship. This pivot buys Bitcoin time, as centralized hashrate may be a soft target for federal intervention. Nevertheless, American Bitcoiners must stay proactive. Deepening Bitcoin adoption to embed it widely in the economy and throughout the world could deter censorship, as attacks on the network would harm personal wealth, spurring backlash. History also shows miners adapt when displaced — China's ban proved that — but governments learn. A future U.S. administration might not ban mining but seek to control it, exploiting centralization. The Bitcoin industry faces a critical juncture. With as much as 75.4% of hashrate in the U.S., even low estimates of 50% present a centralization risk that looms large. Should we diversify globally or lean into America's mining dominance? As Lutnick's vision unfolds, Bitcoiners must ensure this sovereign money remains resilient, regardless of who holds power.
Yahoo
20-03-2025
- Business
- Yahoo
Analyst uncovers unexpected source powering crypto industry: 'The future of bitcoin mining'
Bitcoin is often criticized for its high energy use, which contributes to planet-warming pollution. However, as The Crypto Times reported, one climate tech investor wants to get the word out that bitcoin derives the biggest share of its energy from a potentially unexpected source: hydroelectric power. Daniel Batten's findings show that the bitcoin network gets 23.12% of its energy from hydroelectric sources, with coal and gas sources following at 22.92% and 21.14%, respectively. This updates findings from the Cambridge Centre for Alternative Finance, which previously identified coal as bitcoin's largest energy source. However, the CCAF report confirmed that the estimate was limited, at least in part, by limited real-world data. According to The Crypto Times, Batten's difference comes from including off-grid mining operations using renewable energy. "The study by Daniel shows that the future of Bitcoin mining indeed belongs to hydro power," the Crypto Times said. While bitcoin operations don't directly produce pollution, their computing processes require massive amounts of electricity. That means when bitcoin data centers are connected to power grids relying mostly on dirty energy (such as coal, gas, and oil), it increases local air pollution, in addition to putting a strain on those grids. That problem is beginning to subside as more bitcoin mining operations strike deals to gain their own dedicated power sources — as Mara Holdings, whose advisory board includes Batten, recently did with a Texas wind farm — or to operate exclusively on excess energy from plants that have a habit of overproducing. Looking forward, it's crucial for the industry to continue to mitigate these environmental effects and get those coal and gas percentages down into the single digits. According to the North American Electric Reliability Corporation, reporting in late 2024, its estimates for electricity demand are rising faster than at any point in the last 20 years, and crypto and artificial intelligence data centers are complicating demand forecasts. Their ability to scale also strains energy grids and can make them less stable. Plus, higher demand generally means higher electricity bills for consumers. The good news is it benefits crypto miners to seek the lowest electricity prices, since their profit margins depend on it. Renewable energy is typically cheaper, and it's much cheaper once built, so increasing renewables is a win-win for crypto and the environment. Energy innovation is essential for this transition. For example, methane pollution from landfills — the third-largest source of human-related methane pollution in the U.S. — can be used for energy. So Vespene Energy developed technology that converts landfill gas on-site to power data processing centers, which offsets gas pollution and generates revenue at the same time. Inspiring such efforts is one example of how these energy-intensive industries can be part of the solution. Bitcoin mining can also support the transition to green energy with financial incentives, according to sources. A study in ACS Sustainable Chemistry & Engineering found that 32 planned renewable sites could generate $47 million in profit by supporting bitcoin mining before going commercial. Should the government ban gas stoves? Yes Only in new buildings Only in restaurants No way Click your choice to see results and speak your mind. We've seen some crypto investors prioritizing clean energy for mining facilities. However, as the world's largest crypto asset, bitcoin must make more progress for the industry to become sustainable. "Bitcoin relies on miners using powerful computational power to solve complex puzzles, consuming massive amounts of energy. Crypto mining's future relies on embracing sustainable and ethical practices to ensure it's not just green but genuinely clean," Tin Pei Ling, co-president of digital asset platform MetaComp, told Financial News. "It is in the industry's interest to reduce energy usage and its environmental impact as it evolves," added David Lenigas, chair of Vinanz, a London Stock Exchange-listed bitcoin mining firm. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
The Independent
29-01-2025
- Business
- The Independent
Bitcoin just made Trump billions. But how much will it cost all of us?
If you've never heard of cryptocurrencies before, stop now. Hold on to whatever innocence you've maintained thus far, and just enjoy your day. If you have, it was probably explained to you on a bad date with some over-caffeinated dude who watches too much Joe Rogan and won't stop texting you. Don't worry – I won't try to explain it today. But you should know that its boosters and their energy-consuming supercomputers have captured American politics, and they're hoping their industry will grow to immense proportions over the next four years. In fact, these infamously anti-government crypto -bros were perhaps the biggest contributors to the 2024 presidential election. The crypto industry pumped more than $200 million in direct donations and hundreds of millions more into industry Super PACs. Like any big donor group, they're now expecting massive returns on their investments. Their biggest libertarian dream is not only for the industry to expand, but for the US government to step in and subsidise their speculative investments by trading US gold reserves to buy a national reserve of billions of bitcoins. You should also know that because these digital crypto-currencies require massive amounts of inter-connected computer power to perform thousands of complex calculations every time they want to 'mine' a new 'coin', they soak up electricity like a sponge. Admittedly, some are better than others. But just like any type of unregulated mining, the industry in general is an environmental disaster. Right now, the Cambridge Centre for Alternative Finance projects that without any further growth, the electricity demand of all these computers mining and trading bitcoins alone could already reach 172 terawatt hours this year – that's greater than the annual electricity demand of Poland. And that is assuming no further growth or taking account of any of the hundreds of other cryptocurrencies online. Since 2021, a lion's share of this complex computing has been happening in the USA, especially in Texas. The Energy Information Agency believes it's putting a massive strain on local power grids, especially at peak times, and estimates that it could represent up to 2.3 per cent of national electricity consumption. As crypto-mania grows, so too will this terrible energy bill. And so too, it seems, will its political promoters. If you didn't watch Trump 's two-part inauguration, you might have missed 'Paster Zo', more formally known as Pastor Lorenzo Sewell, who launched his very own cryptocurrency – quite literally from church – that rocketed to anestimated value of $4.5 million, but crashed and disappeared four hours later. It has now lost 93 per cent of its value, as have many of its everyday investors, with some estimates that individual investors may have lost tens of thousands of dollars each. This came only days after the $Trump meme-coin launched, which could become one of his most successful money makers. The coin was launched last week while Trump 's inner circle attended an invite-only crypto ball in DC. Soon after, many of the party-goers were boosting the coin online, as were his family and the president himself. Trump launched the meme coin by inviting his followers on X to 'join my very special Trump Community'. The meme-coin, which is 80 per cent owned by two of Trump's shell companies, rose by more than 600 per cent in its first day. It kept climbing as average Americans joined the weekend pile-on. By Sunday night, the price of a single coin had risen from under $10 when it opened to just under $75, reaching a market capitalisation of more than $15 billion. Due to his shell company's 80 per cent share, Axios analysts estimated that the meme-coin could account for almost 90 per cent of Trump's net worth. Over the course of a weekend, a slew of crypto-boosters and everyday fans had made him an instant blockchain billionaire. That is, until the price dropped dramatically. Late on Sunday night, the meme-coin lost half of its market value within an hour. A wave of major investors sold all at the same time, while the Trump family welcomed the newest family meme-coin, $Melania. Those who knew about the coin's launch, who invested early and calculated when to time their exit correctly, may have made millions in profits. Analysis of the Solana blockchain suggests this to be the case, and that many others, especially the everyday traders following on Twitter or Truth Social, may have lost millions as well. As such, in just the first week of his presidency, Trump and his inner circle of bitcoin bulls had just tried and tested a new and potentially far more lucrative form of energy-hungry political extraction. What we do know is that the public explosion of bitcoin and cryptocurrencies globally is already destabilising local power grids, and will likely expand its already gargantuan environmental footprint. What we don't know is whether or not it may also become a destabilising force for national sovereignty – as well as the climate.
