ALU

Mining

Bitmain’s New 7nm Chip Miners Are Available for Purchase Today

Bitmain;s new miner

Chinese mining giant Bitmain’s 7nm Bitcoin miners go on sale today, November 8, 2018.

Announced in September of 2018, the miners allegedly offer considerably faster hash rates (though Bitmain didn’t disclose any specifications) and come in two separate Antminer models: the S15 and T15.

The company first provided the news on Twitter, writing, “We are officially announcing the release of our new 7nm miners which possess industry-leading hash rates designed to mine with the SHA256 algorithm. Two models will be offered, the Antminer S15 and T15. Available for purchase on 11/8.”

Bitmain’s new ASIC chips will operate via 7nm Finfet, which Bitmain refers to as “one of the world’s most advanced semiconductor manufacturing technologies.” The chips utilize more than a billion transistors each.

In addition, 7nm technology enables the chips to consume less power and mine at much faster paces. In a keynote lecture two months ago, Bitmain CEO and co-founder Jihan Wu said that the chips would “achieve a ratio of energy consumption to the mining capacity that is as low as 42J/T.”

Mining companies everywhere are now seeking to compete with Bitmain and strengthen their spots in the industry. Just 24 hours before Bitmain made its September announcement, the Bitfury Group unveiled its own 14nm ASIC chip called the Bitfury Clarke, which is also customized for SHA256 Bitcoin mining and built to compete with Bitmain’s upcoming model. Bitfury stated that the chip could execute a hash rate of up to 120 gigahashes per second, and a power efficiency rate of roughly 55 millijoules per gigahash.

Another competitor working to up the ante is U.S.-based semiconductor manufacturer AMD. In October, the venture reported that crypto-mining sales were “negligible” in quarter three of 2018, yet the company is now partnering with several major technology companies to produce eight new cryptocurrency mining rigs that are being marketed as “blockchain compute solutions.” Among these companies are Sapphire, ASRock, ASUS, MSI, TUL and Biostar.

In August 2018, mining manufacturing company Pangolin announced it would be releasing a 16nm miner designed to compete with the likes of 7nm. Known as the Whatsminer M10, the miner was alleged to possess speeds of up to 33 trillion hashes per second. While not as up-to-date as 7nm technology, the company is still putting its money on 16nm and claims that SHA256 mining rigs with 7nm technology will sell out very fast and can thus be very difficult to acquire as many companies are struggling to keep up with growing demands. Some mining developers, such as GlobalFoundries, have already stopped producing 7nm chips as a result.

Innosilicon’s forthcoming Terminator3 ASIC miner will sport either an 8nm or 10nm chip, though an Innosilicon representative who spoke to Bitcoin Magazine wouldn’t disclose the exact chip size.

Bitmain also said two weeks ago that it would be offering a firmware update for (overt) AsicBoost to all its Antminer machines, which will increase overall mining efficiency.

This article originally appeared on Bitcoin Magazine.

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Bitfury Secures $80M in Private Funding Round

Bitfury funding round

Cryptocurrency mining firm Bitfury Group has closed a Series C, $80 million funding round led by EU-based Korelya Capital. The round also included crypto merchant bank Galaxy Digital, Lian and Jabre Group, Dentsu Inc., Armat Group and others.

Bitfury is a diversified blockchain company known for its expertise in developing high-performance computing technologies, processing capabilities and advanced blockchain-based solutions for companies and governments, including the development of a blockchain-based land registry in Ukraine.

The funding round will be used by the company to enrich its software and hardware development, as well as explore other technologies that are emerging alongside the blockchain.

“This private placement enables Bitfury to expand our existing areas of focus, including securing the Bitcoin Blockchain, as well as hardware and software development – and broaden our financial strategic options. It also enables us to concentrate on adjacents such as high-performance computing, including emerging technologies like artificial intelligence (AI),” CCO John Mercurio told Bitcoin Magazine.

Valery Vavilov, CEO and co-founder of Bitfury, said the success of the round was a reflection of the company’s achievements and its ability to meet the needs of “adjacent market segments in high-performance computing.”

In correspondence with Bitcoin Magazine, Vavilov stated:

“We are very pleased with our successful private placement, which enables us to expand our work designing ground-breaking blockchain solutions to governments, businesses, and institutions around the world. Strong support from the investor community also allows us to concentrate on adjacent businesses such as high-performance computing, including emerging technologies like artificial intelligence.

Bitfury made headlines last week when word broke out that the company may be considering going public. When Bitcoin Magazine asked if this private funding changes the prospect of an IPO, Mercurio responded with the following:

“Bitfury is continuously evaluating financing options to support its development strategy, and the IPO is one alternative. But no decision has been made and ultimately it will depend on a number of factors, including the capital markets environment.”

At a time when cryptocurrency miners are being criticized for the energy consumption required to secure public blockchains with high security requirements, Bitfury has made a commitment to using renewable energy. It has also created standard processes for reducing the consumption of energy in its data centers by using immersion cooling technology.

In September 2018, Bitfury announced a bitcoin mining chip called the “Clarke” ASIC chip, which it claims offers the “strongest performance among bitcoin mining chips and is unparalleled in efficiency,” via a Medium post. The company also has plans to integrate Clarke into its range of existing mining products and on its mining farms across the world.

In addition to the Clarke chips, the company also launched its latest computing servers dubbed the Bitfury Tardis. Both the chip and the server will be included in the company’s product offering, the Bitfury BlockBox, per reports on its release.

Founded in 2011 and recognized as the largest, non-Chinese company that provides hardware for bitcoin mining, Bitfury is also known for pioneering the hybrid algorithm Flare on the Lightning Network, which ensures that payment routes can be found as quickly as possible.

This article originally appeared on Bitcoin Magazine.

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BTCC Announces the “Indefinite” Closure of Its Mining Pool

BTCC Mining Pool

BTCC will be shutting down its mining pool by the end of the month.

According to a recent notice made by the Hong Kong-based exchange, BTCC will deactivate its mining pool servers on November 15, 2018, and cease all operations entirely come November 30.

Citing “business adjustments,” the notice was generally vague about the exact reason for this particular closure. Having started operations in 2014, the mining pool is one of the oldest in the space, while BTCC itself is China’s oldest crypto exchange.

BTCC’s mining pool was one of the world’s more prominent mining pools as recently as June of 2018, but, in the latter half of the year, its hashrate has steadily decreased. BTCC has requested that all current miners “complete the power switch by November 15th” and has stated that they will eventually “release the profits of all miners in time.”

It is unclear at this time what impact this shutdown will have on the regular operations of BTCC’s exchange. The announcement did not go into any specific detail on their other functions, and they have not made any similar announcements about the functionality of the company.

Still, the notice for the shutdown did end on a hopeful note, as the exchange proclaimed, “We firmly believe that the digital encryption assets and blockchain industry represented by Bitcoin will continue to develop and improve!” The announcement even concluded with an optimistic final farewell to the BTCC community that said, “We will see you again!”

At the time of publication, BTCC has not responded to Bitcoin Magazine’s request for comment.

This article originally appeared on Bitcoin Magazine.

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Blockstack Looks to Boost Decentralized App Usage Through New App Mining Program

Blockstack Looks to Boost Decentralized App Usage Through New App Mining Program

As a company looking to give users full control over their digital rights, Blockstack is piloting a new app mining program that encourages designers to create new applications directly on Blockstack’s platform and earn rewards in bitcoin. The goal is to expand the decentralized app ecosystem while financing developers who build the most popular applications.

Patrick Stanley is the head of product growth at Blockstack. Speaking with Bitcoin Magazine, he says that app mining is a system where developers are rewarded by Blockstack and other participating companies for creating platforms that community members actually want. The stronger and more popular an app is, the more money the developer will earn.

“Right now, app mining is an experiment,” Stanley mentions. “App developers bring value and resources to the community. We’re looking to coordinate early on and test out the concepts early. If everything works well, we’d like to transition things to the PAX blockchain.” PAX is short for Paxos Standard, one of several new popular stablecoins.

Once an app is created, it is examined by one of Blockstack’s primary app reviewers: Product Hunt or Democracy Earth. Both platforms seek out newly registered applications and place them on Blockstack. They then collect information on the surveyed apps regarding their usability and personnel and rank them depending on their own unique standards.

“The idea is to eventually have many app reviewers that are elected by the Blockstack community,” Stanley says.

At present, Blockstack has several tools designed to assist app designers with their endeavors including Blockstack Auth, which the company insists that all developers add to their apps as a login model. Blockstack Auth works as a quick sign-in feature for programs like Facebook and Google by issuing users with private keys and unique names rooted in the blockchain, ensuring the identities in question always stay registered to their respective users. This type of functionality is set to work against problems like fraud and collusion.

“The identities are all part of an open social graph,” Stanley says. “Over 80,000 names are on the Blockstack network already, and they’re all sovereign identities. They are then stored on a system that gives users access to their own private, encrypted cloud where they can store all their app data.”

Payouts to app developers during the pilot run will be issued starting on December 1, 2018. The highest-ranking apps have the opportunity of earning up to $100,000 each month.

The app mining program will launch as a centralized platform, which Stanley admits is the downside of Blockstack’s present level of protection, though he assures the team is taking steps to reduce this centralization in the future and that this is just the first move toward creating a fair system.

“We’ve been engaging with many app developers, and for the next year or so, we’ll be having lots of conversations with our community and working to arrive at the best solutions for checks and balances, governance and voting,” he explains.

This article originally appeared on Bitcoin Magazine.

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Bitmain Releases Overt AsicBoost Firmware for Antminer S9

Bitmain Asicboost

Bitmain has finally released its firmware for the popular Antminer S9 to enable what is called “overt AsicBoost.”

In a recent blog post, Bitmain explains their rationale for the firmware release, citing that they originally “decided against activating this mathematical function in mining hardware” due to the “uncertainty surrounding the use of AsicBoost.”

Bitmain previously released support for AsicBoost back in March 2018 by adding support for it on their mining pools BTC.com and Antpool. This, however, came after the company noticed blocks being mined on the blockchain using AsicBoost. Bitmain had not released firmware support for its own miners until yesterday’s blog post.

Now, Bitmain has enabled AsicBoost on its own hardware, calling it “overt” because of the obvious use of AsicBoost when it is being used by miners (by looking at the blockheader in a block, it is easy to tell if the block was boosted).

In one week, Bitmain will also release firmware to enable AsicBoost in its other hardware devices, namely the Antminer R4, S9i, S9j, T9 and T9+.

What Is Overt AsicBoost?

AsicBoost is a technology implemented in ASIC chips used for mining cryptocurrencies like Bitcoin. When applied to these chips, AsicBoost allows miners to take a “shortcut” to finding a valid block, essentially saving some energy. The technology was originally patented and held by CoinTerra CTO Timo Hanke and RSK Chief Scientist Sergio Demián Lerner. Following the Blockchain Defensive Patent License (BDPL), an agreement to make certain blockchain technologies are shareable with other companies that take part in the agreement, AsicBoost was put in a defensive patent license as part of the process to get rid of all mining patents.

Bitmain, however, is not part of the BDPL agreement.

“With regard to patent rights, we continue to respect third parties’ IP right and take actions accordingly. Based on legal opinions from various jurisdictions, we believe that there isn’t and may never be a patent right over AsicBoost. Thus, all miners should be entitled to make their own choice on whether to use AsicBoost technology without anybody having an exclusive right over it.”

This news comes after there has long been speculation that Bitmain has been using AsicBoost within its own walls, in the form of what’s called covert AsicBoost. The accusations stated that Bitmain covertly, or privately, used the technology to give themselves an advantage over mining hardware that did not utilize AsicBoost. Furthermore, speculations have long circulated claiming that Bitmain’s opposition to the SegWit soft fork upgrade and later support for Bitcoin Cash back in August 2017 was due to a greater incentive: SegWit made it more difficult for covert AsicBoost to be used in the Bitcoin blockchain.

This article originally appeared on Bitcoin Magazine.

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Braiins OS: An Open Source Alternative to Bitcoin Mining Firmware

Braiins OS

Braiins OS wants to redefine open-source mining software.

The project recently rolled out the initial release of its ASIC miner firmware. The operating system is advertised as “the very first fully open-source, Linux-based system for cryptocurrency embedded devices,” an alternative to the factory-default firmware that comes with most popular mining hardware.

Upon visiting the project’s website, visitors are greeted with a clear message, a mantra that resonates with its related industry’s ethos: “Take back control.”

Rethinking Open Source in an Open Source Space

Further down on its website, the project invites community members to “[say] goodbye to backdoors, closed systems and hidden features.” This promise of transparency is an implicit reference to the contrasting opacity of its biggest competitor’s mining software.

Bitmain advertises its software as open source. But Jan Čapek, CEO of braiins, the company behind the eponymous OS and Slush Pool, explained to Bitcoin Magazine that too many features of Bitmain’s code are covertly closed off, making it impossible to provide a proper software image — a record of the state of the mining system at a given time.

Essentially, Čapek indicates that a few key components are missing to make Bitmain’s code full open source, such as the FPGA code. Without these pieces, users cannot parse together a full image of the mining client.

“The problem is that most of the people out there are not able to build a complete S9 image as it is not quite obvious that all the components are provided by Bitmain. To build a complete system you need the first stage bootloader (sometimes called SPL), u-boot, Linux kernel, Linux system (buildroot/openwrt?), FPGA bitstream (+ sources) and cgminer sources. So, there is quite more things that are to be reviewed that are still closed source and open quite a few questions,” he said, “For example, why is the FPGA code still closed?”

Even without these closed systems, other softwares may include “backdoors” or “hidden features” — a practice that braiins OS rejects as well.

In Bitmain’s case, there was a backdoor baked into the code.

Known as Antbleed, the feature was introduced in July of 2016, and it gave Bitmain the ability to remotely shutdown most of its active Antminer hardware, most notably the S9. Bitmain claimed that the backdoor was there so that it could police stolen or hijacked hardware, telling Bitcoin Magazine that the company “never intended to use this feature on any Antminer without authorization from its owner.”

Regardless of its purposes, stated or otherwise, Antbleed was the primary motivation behind braiins OS, Čapek said.

A Bid For Transparency, Flexibility

Braiins OS’s initial release leverages OpenWrt, “a generic embedded Linux distribution that allows [it] a great deal of flexibility,” Čapek said, and its central meta project is open to developers on GitHub.

Per Čapek’s earlier statement, the software offers a more complete, customizable kit than the factory defaults that companies like Bitmain provide with their hardware. “None of the manufacturers provide an easy, documented or central way of building an image and running it on their hardware,” he said in our interview, chalking this up to “probably [a] lack of transparency.”

As an alternative, braiins OS “can be used to build the entire firmware image,” he continued. This includes a tool to configure and run this firmware for specified hardware, something its competitors currently don’t offer.

For its rollout, braiins OS will only be compatible with the Antminer S9 and DragonMint TI, as those are the most commonly used mining rigs currently in use. Going forward, the team plans to open up integration for other devices as well, including the Whatsminer M10.

The project will also look to integrate with more mining pools as it gains traction among developers. Currently, “Slush Pool is one of the few pools that supports the version rolling extension of stratum protocol (BIP310),” Čapek said.

This is in part due to caution. Čapek told us that braiins OS didn’t want to have too many different images installed for the rollout “just in case there were any serious issues with transitions from factory firmware.” Seeing as this is “an alpha release,” he continued, “massive deployment was not desirable.”

In the meantime, the team looks forward to the community enriching its project, and Čapek indicated that they’ll be taking notes on developer activity in order to improve the project in future releases.

“Currently, we are already gathering feedback from the community. The next release with regards to S9 will bring additional features like per hashboard frequency and voltage configuration.”

An earlier version of this article incorrectly indicated that braiins is an offshoot of Satoshi Labs. The article has since been corrected.

This article originally appeared on Bitcoin Magazine.

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Report Links 74% of Bitcoin Mining to China, Sees Threat to Network

China Mining report

Bitcoin, the world’s most sought-after cryptocurrency, could be at the wish and whim of Asia’s economic giant.

A recent study titled “The Looming Threat of China: An Analysis of Chinese Influence on Bitcoin,” jointly researched by Princeton University and Florida International University researchers, suggests China’s mining scene has an overwhelming influence over Bitcoin, something that could invite network manipulation.

China, which the researchers refer to as the “most powerful adversary to Bitcoin,” has long been known as the country with the largest numbers of miners in the world and the home to Bitmain — the company responsible for mining roughly half the world’s bitcoins.

Bitcoin’s network is largely dependent on miners, who use a vast amount of computing power (hash rate) to verify transactions, find blocks to continue the network’s ledger and mint new bitcoin — and 74 percent of that computing power currently resides in China, according to the study.

The Bitcoin community is privy to this worrisome trend and has been wary of a potential attack that could be spurred by external factors. Controlling 51 percent of the network’s hash rate opens the threat of a 51% attack, a scenario where miners can modify transactions on the ledger for their own economic gain.

According to the report, the Chinese government is keeping its eye on all of the Bitcoin-related activity going on in its domain, and, given the concentration of miners in the area, it may have the potential to disrupt the Bitcoin network.

It claims that the government has made well-calculated efforts to reduce the speed of Bitcoin’s network. The researchers made references to China’s Great Firewall and the Great Cannon as the primary tools used to modify and keep track of internet traffic into the country in its bid to hinder the network. While expatiating on China’s technical ability to weaken bitcoin, the paper gave insight on how the Great Firewall was used to incentivize miners to mine “empty blocks” — a possibility since put to rest with the recent Bitcoin software upgrade.

The study explored other ways within China’s disposal to weaken the cryptocurrency, among which are a series of regulatory and technical actions. A vivid regulatory option would involve IP surveillance targeted at Bitcoin users to prevent them “from committing transactions to the blockchain.” Another option at the country’s disposal is the deanonymization of bitcoin users, linking them to real-world entities and disrupting the activities of competing mining pools to “consolidate their control” over Bitcoin.

The concluding analysis in the study was centered on China’s ability to use Bitcoin as a weapon in weakening nations that have found an economic leverage while using the cryptocurrency as an alternative to native economic instruments.

“To exert influence in a foreign country where Bitcoin is in use, China may aim to weaken or even totally destroy Bitcoin. This could be done by targeting specific users or miners for attack or by generally weakening consensus to increase volatility to a breaking point,” the researchers noted. 

This article originally appeared on Bitcoin Magazine.

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Federal Election Committee Asked to Consider Crypto Mining for Political Contributions

Federal Election Committee Asked to Consider Crypto Mining for Political Contributions

OsiaNetwork LLC has reached out to the Federal Election Committee (FEC) in the hopes that it will allow computer sharing for crypto mining for campaign donations. Osia says it would like to be the platform in which volunteers share their computer power to mine cryptocurrencies, which are then donated to political campaigns of their choice. At press time, the request is in a “public comments” stage.

Initially published September 10, 2018, the venture’s request states, “OsiaNetwork would allow volunteers to support federal political committees by ‘pooling’ the processing power of their internet-enabled devices to mine cryptocurrencies. OsiaNetwork believes that enabling individual volunteers to so ‘pool’ the processing power of these devices would allow individuals to support their preferred candidates, which they would not otherwise be able to do.”

Osia further explains that volunteers can use any registered device(s) so long as they are actively signed into the company’s website. Mined coins do not go to the volunteers themselves, but rather to the OsiaNetwork pool, which keeps a certain portion for company processing fees while sending the rest to volunteers’ choice campaigns.

“Mining rewards will be allocated among OsiaNetwork’s clients proportionately to the number of hashes that each committee’s volunteers generate to solve the block that generates the mining reward,” the company says. “OsiaNetwork will maintain a separate account for each of its clients that reflects, on an ongoing basis, the number of hashes generated by the individual volunteers of that particular client.”

In addition, campaigns also have the option to solicit donations themselves. Osia simply connects to the campaigns’ websites and allows contributors to sign up from that point. Its letter explains, “If a federal committee would like to allow their individual supporters to volunteer the processing power of their internet-enabled devices, OsiaNetwork will provide the tools necessary to create a webpage on that committee’s website that provides the methodology to pool the processing power of these volunteer’s internet-enabled devices.”

Accountability

Where OsiaNetwork may encounter problems is in the amount of trust it expects from its users. For example, in the “terms of service” section of the company’s request document, it says that Osia does not guarantee the uptime of its services, nor does it take any responsibility for equipment damaged while using Osia’s services.

In addition, the request does not specify how much money will be delivered to designated campaigns, only that mining rewards “will be allocated among OsiaNetwork’s clients proportionately to the number of hashes that each committee’s volunteers generates to solve the block that generates the mining reward,” and that campaigns will receive the value of mined cryptocurrency in USD. The identities of people who participate in the volunteer program are kept secret from campaigns.

The document also says that there are no restrictions regarding how Osia can sell or distribute mined cryptocurrency; however, neither does the document offer details regarding OsiaNetwork’s accountability measures. Thus, the plan basically describes a custodial service, where all the mining rewards are pooled centrally and disbursed by Osia, but without any mention of transparency or accountability — an important aspect for most blockchain users. Osia appears to be requiring a high level of trust from people using the company’s services: All volunteers and miners will just have to have faith that Osia will do as it promises.

Bitcoin Magazine reached out to legal representatives of OsiaNetwork to learn more about any transparency measures that might be in place but was unable to get a response.

Political Contributions and Cryptocurrencies

The FEC began allowing bitcoin-based donations to political campaigns in May 2014, though reactions have been relatively mixed throughout the United States. In California and North Carolina, for example, donations in bitcoin and cryptocurrency to political campaigns are strictly prohibited.

On the other hand, areas like Missouri have made tremendous headway. Last year, Republican Senate candidate Austin Petersen of Missouri received upwards of 24 separate bitcoin donations, one of which is the largest in political history — 0.284 BTC, worth approximately $4,500 at the time.

Petersen’s campaign manager Jeff Carson later commented that the Senate hopeful was a “big fan” of marketplace competition, which bitcoin tends to deliver.

“I think it goes without saying we’re going to see a lot more of this in terms of campaign contributions and campaign financing,” he said. “With the rise of cryptocurrencies like bitcoin, it was a no-brainer for us to use those.”

This article originally appeared on Bitcoin Magazine.

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Bitmain IPO Prospectus Reveals Offering May Be a Gamble for Investors

Bitmain IPO Prospectus Reveals Offering May Be a Gamble for Investors

Bitmain, the biggest company in bitcoin mining, has filed for its IPO in Hong Kong. As part of the approval process, the company submitted a prospectus to the Hong Kong stock exchange at the end of August 2018. The prospectus was published on September 26, 2018.

Most of the document’s financial data is old information, except for that of Q2 of 2018. When Bitmain raised $400 million in a pre-IPO round last month, leaked financial documents provided most of the information we see in the prospectus now. The new prospectus includes three months beyond what was previously known. And that new information tells a bigger story.  

According to the new prospectus, Bitmain posted $701 million in net profit in 2017. Yet, for the first half of 2018, Bitmain claims a gross profit of $743 million, despite a massive slump in crypto markets. This is odd because one would expect any company in the cryptocurrency business to have felt the pinch from this decline.

In fact, Bitmain has. The leaked pre-IPO presentations showed that Bitmain made a $1,137 million net profit in Q1. This means Bitmain actually lost $400 million in Q2.

About Bitmain

Most of the Beijing-based firm’s business comes from making ASIC mining rigs used to mine bitcoin and other cryptocurrencies.

According to its IPO prospectus, 90 percent of the company’s profits came from miners in 2017. And in the first six months of 2018, miners accounted for 94 percent of the profits. The rest of the profits came from mining farms, shared mining pools, AI chips and blockchain services.

In addition to having a corner on 74.5 percent of the entire crypto mining market, Bitmain also runs two of the biggest bitcoin mining pools, AntPool and BTC.com, and is an investor in ViaBTC, a smaller mining pool and exchange.

Where Bitmain Lost Money

In its prospectus, Bitmain explains that losses in 2018 were mainly due to having an excess of inventory and having to sell its miners at a lower price. (As the new prospectus reveals, in 2018 Bitmain suffered an inventory write-down of $391 million.)

Reflecting that, the company’s gross margins are in decline. In the first half of 2018, Bitmain’s gross margin was 36 percent, down from 48 percent in 2017 and 54 percent in 2016. Contributing to that, cost of sale percentage was 52 percent in 2015, 52 percent in 2016 and 64 percent in H1 of 2018.

Antminer sales is not the only area where the company lost money. Since the beginning of 2017 to mid-2018, Bitmain failed three times in trying to come up with a more efficient mining chip. Each of those efforts cost Bitmain hundreds of millions of dollars. Those costs amounted to losses of $500 million. This pinpoints the risks and costs involved in making silicon chips. It is also important to note that any successful company needs to take risks, so this is not necessarily a bad thing.  

Bitmain also lost money in its bitcoin cash investment. It is no secret that Bitmain is a huge fan of the alternate cryptocurrency that resulted from a controversial fork in the bitcoin code in mid-2017. In support of the coin, Bitmain sold much of its bitcoin holdings (which it got from mining bitcoin and also accepting bitcoin as a form of payment for its Antminers) in exchange for bitcoin cash.

In December 2018, Bitmain owned 5 percent of all of the bitcoin cash in circulation, according to the leaked prospectus. Most of those holdings were bought at $900 on average. Price declines in bitcoin cash caused the company to lose about $500 million in 2017. (Bitcoin cash is currently at $550.)

A Risky Bet?

Despite these figures, Bitmain has already raised $785 million in venture capital funding this year (its net cash balance went from $105 million in Q1 to $343 million in Q2, and Bitmain has raised even more in Q3), and it is planning to go public in 2018 or early 2019. The company has not said how much it hopes to make in its IPO, but some estimates put it in the ballpark of $14 billion.

This could make the Bitmain IPO one of the largest IPOs of all time. Facebook’s IPO (2012) was worth just over $16 billion and that of Visa (2008) was $17.9 billion. (In its prospectus, Bitmain said it will funnel the money into research and development and expanding its production output.)

Yet, for investors, the question is: What are Bitmain’s prospects for the future, given that most of its current profits come from manufacturing mining rigs? Crypto markets exert a strong influence on Bitmain’s revenues, but they are declining. Since December 2017, the price of bitcoin has fallen 65 percent from its all-time high. At press time, bitcoin sits at about $6,500.

A lot else is changing in the crypto space — regulation, for one. China has been taking increased action to clamp down on all things cryptocurrency. And in the U.S., regulators are starting to get tough with crypto exchanges and bring down the hammer on questionable initial coin offerings. All of this will have an impact on the price of bitcoin.

Also notable in a report issued in August 2018, analysts at investment firm AllianceBernstein questioned Bitmain’s sketchy cash flow and suggested the company may be slowly losing its edge.

Ultimately, it will be up to investors to weigh Bitmain’s potential down the line. As for the company’s competitors, the influx of cash from an IPO is likely to give Bitmain a much needed boost.

This article originally appeared on Bitcoin Magazine.

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Innosilicon’s Impending ASIC Miner Could Challenge Bitmain’s Dominance

Innosilicon’s Impending ASIC Miner Could Challenge Bitmain’s Dominance

As controversies surrounding Bitmain’s looming IPO spell uncertainty for the future well-being of the mining goliath, competitors are fast to move in on the manufacturer’s territory.

One of these competitors, Innosilicon, now claims to have a new ASIC miner for bitcoin in the works that will outperform any current hardware in speed, profitability and efficiency.

Speaking to Bitcoin Magazine, an Innosilicon representative, who asked to remain anonymous, said its upcoming ASIC, the Terminator3 (T3), “has been in development since February of this year.”

Founded in 2006, the technology company, which produces various IP and IT hardware, has made significant headway in the mining arena. With 12+ years of experience building ASICs under its belt, Innosilicon’s team has shifted its focus in recent years to engineering ASIC miners for Litecoin, Zcash, Decred and Dash. They’re prototyping a machine for Ethereum, as well.

Innosilicon began producing Bitcoin ASIC miners this year, and it was among the first manufacturers to implement overt AsicBoost into its hardware. Seeing as roughly 5 percent of Bitcoin blocks today are mined using overt AsicBoost, Innosilicon’s machines likely account for most of this activity.

Enter the T3

Scheduled for release in December of 2018, the company’s third generation Bitcoin miner builds on its predecessor’s architecture with some added improvements.

“We experimented with many different recipes and options in the T2 Turbo to learn the optimal points of the process and circuit architecture. So there’s a combination of improvements to circuit architecture and process options for the T3.”

Purportedly consuming only 44 watts of power per tera hash (44W/TH), the T3 could become the most energy-efficient miner on the market when it is released. With its single tube design and a power consumption of roughly 2100w, the miner achieves its efficiency with help from a processing chip similar to the groundbreaking design Samsung developed for its smartphones last year. The representative declined to specify whether it is an 8 or 10 nanometer chip, stating the exact specs will be revealed after production and before shipment.

This chip, and the low energy use it promises, should outfit the T3 with near-unmatched voltage, the source claimed. Like the T2 Turbo that came before it, the new model will be one of if not “the only ASIC design in the world to operate at approximately 0.35 volts.” To put this into perspective, the Apple and Intel processing chips that power most of the world’s computers and smart devices run at approximately 0.6 volts, and Bitmain’s s9 ASIC operates at 0.41.

Stacking Up

This same metric means that the T3’s hashrate will capitalize on its energy efficiency. At 43 tera hashes a second (Thash/s), our source claimed the T3 will sport the fastest hashrate on the market. If this promise holds up in practice, this would make the T3 “200 percent faster than Bitmain’s s9,” the representative said.

These specs would have the T3 outperforming top-shelf hardware from other rivals as well. Founded in 2016 by Yang Zuoxing, Bitmain’s former head of design, Bitwei claims that its WhatsMiner M10 will be the most energy efficient on the market. But even with its still-impressive 66-68 W/TH — a figure that Innosilicon’s T2 Turbo-32T matches — the WhatsMiner M10 could lag behind the T3 if Innosilicon’s forthcoming product lives up to its potential. As described by our source, the T3’s design positions it most closely to Bitfury’s newly released ASIC chip. The Bitfury Clarke, as it’s called, is a 14 nanometer chip that promises a power efficiency of 55 milijoules per giga hash (mJ/GH) and a voltage requirement of 0.3v.

The circuit architecture behind the T3 was built from the ground up, the representative said, though Innosilicon took notes from Samsung’s manufacturing process. The South Korean electronics company made its entrance into the cryptocurrency space this year when it revealed it was producing ASIC processing chips for Halong mining.

“Samsung is our manufacturing process provider, not our design partner. We used some of their production line to experiment different combinations, so we use their nanometer chip process to invent and architect our own circuits. The circuit design is ours; the process model is mostly from them with our own data calibration.”

The representative indicated that the T3 will likely cost the same as the T2 Turbo ($1,568), if not “slightly higher,” continuing to say that the company will gauge production “depending on demand.”

In a bid to produce the most efficient hardware on the market, Innosilicon will continue to seek out innovative technologies. Our source believes that the recent bear market exposes the need for such innovations. Not only do they help miners retain profit potential, but they also push manufacturers to produce greener products to guide the community toward more sustainable solutions.

“I’d like to emphasize that currently there is a landscape change in terms of cryptocurrency mining because of the bear market and more focus on technological innovations. Previous products have been in the product for too long, and these are becoming defunct because they can’t pay the electric bill. It is important to pick the right product in the future to be more green, to sustain the growth of the bitcoin mining industry. For us, our goal is to keep innovating and to keep supporting the blockchain community.”

This article originally appeared on Bitcoin Magazine.

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New Mining Manufacturer Linzhi Announces Ethereum ASIC Miner

Want to Learn More About Mining? There’s a New Summit for That

Chen Min, the former chief chip maker at Bitcoin mining chip developer Canaan Creative, is turning her attention to Ethereum. Announcing her venture at the Ethereum Classic Summit in Seoul, South Korea, Chen’s new company, Linzhi, will focus on building cryptocurrency mining devices, and its first official products are a series of application-specific integrated circuit (ASIC) miners designed specifically for Ethereum and Ethereum Classic.

Ethereum ASIC miners are relatively new. The first group arrived five months ago in April by way of Bitcoin mining giant Bitmain. Known as Antminer E3s, they were first shipped out last July and cost approximately $800 per unit. The first batch sold out almost immediately despite several selling limits, including Bitmain’s “one unit per user” principle, and restrictions on shipping to both Taiwan and China. The company had been touting its new technology since early February.

Susquehanna analyst Christopher Rolland was one of the first voices to break the news. Rolland explained, “During our travels through Asia last week, we confirmed that Bitmain has already developed an ASIC for mining Ethereum, and is readying the supply chain for shipments in [Q2 2018].”

Unfortunately, the Ethereum community has posed several problems for Bitmain by seeking to halt the use of ASICs, which they believe cause centralization and prevent fair competition in the mining arena. Recently, a developer put forth an Ethereum improvement proposal (EIP) suggesting an Ethereum Network hard fork that would ultimately prevent the utilization of ASICs in Ethereum mining.

In addition to this EIP impediment, Bitmain faced criticism for the release of its latest chip, the Antminer X3, which was built to mine Monero. The currency’s founder, Riccardo “Fluffypony” Spagni, claimed that the chip would be rendered inoperable by the time it was ready for release given that Monero was scheduled for a hard fork that would make it immune to ASICs.

Furthermore, Monero would undergo biannual changes that developers asserted would discourage both the centralization of mining and the use of ASICs when mining the currency. Prior to selling the chip, Bitmain posted on its website that the risks of cryptocurrency mining could be “related to changes in exchange rates of the cryptocurrency or to changes in the algorithm that is used to mine the cryptocurrency.” It also asked customers to “please deliberate well before making a purchase,” as they would not be processing any refunds.

During her talk at the Ethereum Classic Summit this week, Chen claimed that Linzhi’s new Ethereum miner would use only one-eighth of the power consumed by Bitmain’s devices. In addition, she said it would run at about 1,400 million hashes per second — a sizable increase compared to the 190 million hashes per second that Bitmain’s Antminers produce. If Chen’s claims hold up, Linzhi’s product could produce as much as $20 in ether per day — about $17 more than what miners would make using a Bitmain miner. At this rate, Chen believes the money people would pay for a unit could be earned back in as little as four months.

The miner is slated for release by April 2019, though Chen has yet to offer a figure of what a single mining unit might cost.

This article originally appeared on Bitcoin Magazine.

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Montana Senator: Closing Coal Plant Could Hurt Bitcoin Mining Industry

Coal mine

The crypto industry has scored another first, as a junior U.S. Senator from Montana, Steve Daines, has lobbied against the planned closure of a coal-fired power plant in Rosebud County, arguing that its closure could harm the growing cryptocurrency mining industry in the state.

According to reports, the Colstrip coal plant in Rosebud County is scheduled to shutdown by 2027 as State and Federal governments in the U.S. look to transition toward clean and renewable energy sources.

Unusual Situation

Elsewhere in North America and around the world, crypto mining generally takes place where cheap power is available, which is the case in Montana, but with one key difference: most other crypto mining hubs with access to affordable electricity make use of renewable energy.

Indeed, mining ventures have increasingly flocked to sources of renewable energy in an effort to generate greater profit, as is the case in Scandinavian countries, which make use of hydroelectric and geothermal energy, or America’s Pacific seaboard and China’s Sichuan mountain region.

In Montana, however, vast coal deposits and several coal-fired power plants supply an abundance of cheap electricity, and this has attracted a growing number of mining farms to the area. According to Senator Daines, this should be encouraged and not stifled, as bitcoin mining is one of the few growth industries with immediate, long-term prospects in the state.

Speaking during a U.S. Senate Energy and Natural Resources Committee meeting recently he said:

“As the demand for Bitcoin miners increases and supply of cheap, reliable electricity from coal generation decreases, this could pose a threat [to] the expansion of Bitcoin generation and an even greater threat to energy supply and prices for Montana as a whole.”

Montana’s Unique Crypto-Positive Atmosphere

It will be recalled that Montana is currently one of the most crypto-positive states in the U.S., offering permission to bitcoin mining operations before any other state in the country.

Governor Steve Bullock also announced last year that, out of a special fund meant to stimulate economic activity and boost growth in the state, $416,000 was allocated to Project Spokane.

Alongside low energy costs, Montana’s low temperatures are also a draw for coin miners who want to save costs on cooling, as ASIC miners and other related mining hardware require temperature controls to keep from overheating. Mining companies that have taken advantage of Montana’s unique comparative advantage include CryptoWatt LLC and Bonner Bitcoin.

CryptoWatt’s facility in the town of Butte has an exclusive agreement with the Colstrip coal-fired plant to supply it 64MW, and it’s one of the largest consumers of electricity in the state. Located in Missoula, Bonner Bitcoin’s data center,Project Spokane, is also undergoing expansion to take its total number of mining rigs from 12,000 to 55,000. This could mean more controversy for the company whose neighbors have complained about the noise levels of its hardware in the past.

Speaking with Bitcoin Magazine, CryptoWatt Chief Communications Officer Matt Vincent said they chose coal for their current power contract because it was the most “competitive on the market for our intents and purposes at the time.”

The company, however, has a number of “competitive alternatives for power contracts” and he expects them to be adequately secured before the closure in 2027.

“We will continue to strategically and responsibly evaluate the best options for our needs in the future, and we have a lot of confidence that Montana will continue to be the best place for us into the future. We consider sustainable options (wind, solar and hydro) every bit as viable for us as coal and we will always strive to do what’s in the best interest of our company in balance with the communities in which we are invested,” he said.

Elsewhere in the States, mining operations in New York may benefit from plans to revitalize the Valatie Falls hydroelectric dam. DPW Holdings has spearheaded the restoration process to power its subsidiary’s cryptomining farm in the state of New York.

In a statement released to the media, DPW Holdings said the project is an “important step” in creating a “self-sustaining cryptocurrency mining business.”

“Our successful repurposing of Valatie Falls dam to provide clean, low-cost, renewable power to Super Crypto’s future co-located mining farm is another important step in our strategy to create an economically viable, self-sustaining cryptocurrency mining business.”

This article originally appeared on Bitcoin Magazine.

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New Research Claims Satoshi Mined Far Fewer Bitcoins Than Previously Thought

New Research Claims Satoshi Mined Far Fewer Coins Than Previously Thought

Based on five-year-old research, Bitcoin enthusiasts and critics alike have often held that Satoshi Nakamoto originally mined some 1,000,000 bitcoin in the early days of the network. New numbers from BitMEX Research, however, demonstrates this number could be off by 300,000-400,000 total bitcoin.

Breaking Down Lerner’s Research

The oft-cited 1,000,000 coins estimation comes from research conducted by Bitcoin developer and RSK founder Sergio Demian Lerner and presented on Bitcointalk in 2013.

Lerner came to this conclusion by examining the Total Network Strength of Bitcoin’s blockchain in 2009. At 7 MH/s, he argued, Satoshi must have been mining alone in the network’s first two weeks, and, since the network’s hashrate remained at 7MH/s for the entirety of 2009, he must have been mining alone for the entire year.

In the comment section of the forum, Lerner was met with some understandable criticism and skepticism. Counter arguments posit that his MH/s estimation doesn’t include a large enough sample size and is based on unreliable block timestamps. Many forum users also recalled mining themselves in the early days of the network.

These arguments and anecdotes were enough for community members to shrug off Lerner’s claims, until a few days later, he came back with more evidence derived from a different method and posted it on his personal blog.

Lerner’s new findings were derived by using Bitcoin’s ExtraNonce value, a bit of data in coinbase transactions that miners can use if it takes them too long to find a block.

Lerner’s research was accompanied by two graphs that, he argued, illustrate that Satoshi was the only miner working in the network’s infancy. As the slopes that represent the ExtraNonce value are of the same size and gradient, the argument goes, it’s reasonable to assume that they represent the same miner.

This method and its findings were enough to convince most of Lerner’s naysayers; as a result, many assumed that Satoshi netted roughly 1,000,000 bitcoin as a reward for his solitary mining in the early days of his creation.

BitMEX Rethinks Lerner’s Method

This week, BitMEX Research revisited Lerner’s research, although it arrived at a different conclusion.

BitMEX Research does agree with Lerner’s findings to a point, and they have no problems with his method. But they also argue that his findings only support his argument up to August 2009.

“After August 2009, the pattern breaks down to some extent. The gradient of the slopes varies considerably (from 1.1 nonces per block to 10 nonces per block),” BitMEX Research explains. “At the same time, the height of the slopes is inconsistent and there are many large gaps between them. Therefore, although the image still looks compelling, the evidence that the miner is one entity is somewhat weak, in our view.”

The research finally concludes that “the number of blocks allocated to the dominant miner is grossly overestimated.” The authors continue to write that “[even] if the slopes are similar, this could be because different entities had a similar setup. Each miner is not independent, in the sense that they are likely to be running the same software or could be using the same popular hardware, which could produce the same pattern.”

A more likely figure for how many bitcoins Satoshi mined, the report reads, is likely between 600,000 and 700,000.

It’s important to note that the biggest assumption in this case is that Satoshi is the dominant miner in the network’s early days. There’s no hard evidence to confirm this hypothesis, something BitMEX acknowledges in its report.

The Implications of This Evidence

In the Bitcointalk Forum detailing Lerner’s original evidence, some community members argue that the mining rewards reaped by the first miner (be that person Satoshi or otherwise) is unethical. In effect, these critics say, these rewards act like a pre-mine of sorts. With no one else on the network, Satoshi would have been able to mine without competition and, as a result, he accumulated a treasure trove of bitcoin.

Whether this critique is valid or not, the new evidence BitMEX presents may partly mitigate these concerns. Though these same critics may find little solace in the notion that Satoshi or the first miner may only own 30-40 percent fewer coins than originally evidenced, it appears as though, at least from August 2009 on, Satoshi wasn’t the only miner on the network.

BitMEX calls into question just how many blocks Satoshi mined, meaning that the first year’s block rewards may not have been so centrally allocated as originally assumed.

Under this argument, the network was more active in its nascency thanks to a handful of early adopters, so Satoshi couldn’t have monopolized it as some critics claim.

This article originally appeared on Bitcoin Magazine.

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Noise Complaints May Cause Norwegian Bitcoin Mining Center to Shut Down

Norway noise

Norwegian bitcoin miner Kryptovault is facing a shutdown of its operations due to extensive noise complaints from locals and a lack of proper paperwork. The company, which is headquartered in a former paper mill in Norway’s capital of Oslo, uses more than 40MW of power to drive an arsenal of nearly 10,000 computers. The staff could mine several million Norwegian kroners’ worth of bitcoin per week, but financial promise isn’t enough to keep residents interested.

“The sound of the factory comes 24 hours a day, 365 days a year,” explains Trond Gulesto, one of the facility’s closest neighbors. “Our summer has been ruined.”

The noise comes predominantly from the large fans required to cool down the operation’s mining computers. Many of the area’s residents have been forced to evacuate bedrooms close to the venture’s primary facility and keep their windows shut throughout the day, even during the summer’s rising temperatures.

Things have gotten so out of control that the company allegedly received a bomb threat last week.

The threat read, “This is sabotage. If you are expanding crypto mining and filling the country with noise, then you will be sabotaging the peace. I am threatening to send you some explosives.”

Following the bomb threat, Kryptovault’s managing director Gjermund Hagesaeter informed the nearby police force and warned employees to remain cautious while traveling to and from work.

“The threat has been reported to the police, and we are taking the whole issue very seriously indeed,” he commented. “We have also asked the police to assess whether any further action needs to be taken.”

He later stated that, while the threatened facility is in a fenced area and difficult to access, others are more exposed and could be vulnerable to potential attacks, and that everyone should remain “on their toes.”

It appears as if the noise isn’t the venture’s biggest problem. According to the local municipality, the mining operation doesn’t possess the required permissions to mine cryptocurrency and has been operating illegally since last spring. Arne Hellum, who handles construction cases for the municipality in question, states that Kryptovault may now be required to shut its doors temporarily and cease all operations until it gathers the appropriate permits.

Executives of Kryptovault say they were told all their permits were in order when they first began conducting business. They plan to fight any threats of shutdown while applying for the missing permits but admit they have experienced conflict with locals. They are now investing in noise-reduction equipment that would potentially reduce the noise from approximately 60 decibels to about 45.

This article originally appeared on Bitcoin Magazine.

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Mining Like a Viking: How the Fjords of Norway Offer a Greener Alternative

Mining Like a Viking: How the Fjords of Norway Offer a Greener Alternative

“Make sure to close the door behind you,” Mathis Schultz, the CEO of Northern Bitcoin, said to me in a near shout. As we entered the backside of the shipping container, partitioned for the ASIC miners’ exhaust, Schultz wanted to make sure the heat emitted wouldn’t mingle with the temperature-controlled front end of the shipping container.

The door opened, my senses, already ringing from the blaring of the ASICs’ mechanized grind, were ignited. Like stepping from one climate zone to the next, I was greeted by a wave of hot air, the collective, arid exhaust from the shipping container’s 210 Antminer S9s.

The backside of the mining rigs emit a powerful exhaust.

All that heat and the cacophony came from just a fraction of the 3,250 miners Northern Bitcoin runs in 15 shipping containers. Situated in Lefdal mine — a data center located roughly 31 miles northwest of Sandane, Norway — the operation is certainly unique. Bridging two industries and centuries, the bitcoin mining farm sits in a defunct olivine mine from the ’70s.

Even more serendipitous, the converted data center is powered by 100 percent renewable energy from hydroelectric plants built in the same decade. Fed by the fjords that punctuate Sandane’s mountainous landscape, hydroelectric dams provide the data center with an abundance of clean energy.

For Northern Bitcoin, this means mitigating the biggest headache when it comes to scaling and operating a mining farm: electricity costs.

Northern Bitcoin

Northern Bitcoin was founded in 2015. In its infancy, it was the aspirational leap into a new and still uncertain industry for CEO and Founder Mathis Schultz. A former banker for such firms as LGT, Julius Baer and Elan Capital partners, Schultz decided to shelve his former career in the old financial mode to pursue what he considers the future of finance.

“I have always been interested in finance, the nature of money and its impact on our society. When I first heard of bitcoin and began to deal with it, I was instantly fascinated: Bitcoin is a revolution of our financial system. Its technology will replace many of their services, especially global transactions, and I wanted to be part of it,” Schultz told Bitcoin Magazine.

Northern Bitcoin’s core team who accompanied us in Norway, standing front of a shipping container: (from left to right) Dr. Hans Joachim Dürr, Moritz Jäger, Mathis Schultz, and Marieke Garrels.

Thus far in the company’s young development, Schultz’s gamble has been paying off. What started off as a single container operation of a handful of miners has scaled into the 3,000+ ASICs held in Lefdal today. From this growth, the company has taken its operations public. Traded on the Munich stock exchange, Northern Bitcoin is valued at $177 million. More impressive, its valuation has stayed relatively stable during the recent bear market, something that most crypto-related businesses have struggled with as prices continue to tread water.

Northern Bitcoin’s novel operations are no doubt integral to this success. Schultz expressed that Norway and the Lefdal mine formed “a perfect match for all [the company’s] criteria.”

With access to the cheap, renewable energy — which the region’s plants produce in surplus and the Norwegian government exports — the mine can operate with minimal costs and with neutral carbon emissions.

The region itself boasts up to 6.7 TWh of excess renewable energy. This puts the mine’s electricity costs somewhere between $0.035–0.045/kWh, giving it a power usage efficiency value of 1.08 — a more than favorable figure.

To put this into perspective, Mongolia provides Bitmain access to renewable forms of energy at an average of $0.08–0.09/kWh.

Northern Bitcoin’s energy costs are lowered still by the climate control measures Lefdal mine features by design. As if the Norwegian climate wasn’t cool enough, the data center is situated some 656 feet below ground, so it maintains a constant temperature of 55 degrees Fahrenheit (~12.5 degrees Celsius).

On top of this, the center pumps water in from the surrounding fjords to cool its IT hardware, dumping it back into the fjords so as to ensure zero waste.

This process allows Northern Bitcoin to cool its rigs down from 86 degrees Fahrenheit to 64.4 degrees Fahrenheit when they’re operating at full capacity. The team claims that this reduces their operating costs by up to 40 percent.

“The 15 containers in Lefdal have an electric power of about 4.6 MW and thus consume a little bit more than 110 MWh a day,” CTO Moritz Jäger told Bitcoin Magazine.

To increase the hardware’s efficiency and cut operating costs further, Jäger and his team have developed their own software for running the miners. This software, Jäger claims, allows the miners to perform at a fuller capacity by cutting back on secondary functions.

“… the factory software is not optimized for best performance. It is doing other things additionally to the hash computations, like communicating with different servers, rendering a web user interface and so on. Some of these functions can be turned off completely and others can be executed with lower priority to save CPU time for the actual hashing. It is also very restricted in its overclocking functionality.”

The company has also developed its own proprietary monitoring software, Jäger added, “which makes managing the ASICs as easy as possible.” This lets the team oversee their hardware and manage problems from back in Frankfurt, the most common problems needing only a reboot to resolve. Many of these issues, like when a machine has temporarily degraded performance, are automatically fixed with a reboot.

The team receives alerts for problems that cannot be solved automatically. For everything else such as “maintenance that requires remote-hands, like replacing a power supply, the technical staff in the mine has been trained and knows what to do,” Jäger said.

The Mine: A Look Inside

Traversing the two-lane highways that weave in and around the mountainous landscape, we set out for the mine. Situated 111 miles from Bergen, Norway’s second-largest city, the trek took a good 30 minutes from our lodging in Sandane, and it included a 10-minute ferry ride across the fjord’s many vast channels.

Lefdal Mine Data Center, featured with a Northern Bitcoin shipping container

Arriving at the mine, we were greeted by Mats Andersson, the chief marketing officer of Lefdal mine data center. Eager to showcase the mine’s digs, he briefed us on a few dos and don’ts and, loading up in the van, we began our descent.

Established in the late ’70s, the data center occupies what was originally an olivine mine. Maintaining cool, steady temperatures year-round thanks to its subterranean environs, the mine is ideal for housing IT hardware, which often require intensive cooling measures to prevent overheating and excessive electrical consumption.

As the mine was already hollowed-out from its previous incarnation, the data center’s infrastructure was largely in place upon its inception. In total, the mine’s prior activity furnished the data mine with six levels to house equipment, a total surface area of 393,700 feet. Spiraling downward a total of 4,265 feet, a central avenue runs through each level, which branch out to numerous streets on either side, typically 328 feet in length, that house storage containers for the IT equipment. Of these six levels, three are currently operational as the mine builds out its cooling and electrical infrastructure.

Running through the mine’s multiple levels, the avenue is flanked on either side by the streets that house IT equipment.

Northern Bitcoin’s operation sits on the second level of the facility. Stacked three units high, the shipping containers are equipped with power grids to monitor and manage their power consumption.

As an additional means for chilling to add to the mine’s naturally cool insulation, a series of pipes pump water from the fjord through each shipping container to refrigerate the 210 ASICs resting inside. Going in, the water averages a temperature of 46.4 degrees Fahrenheit, and it leaves the mine to reenter the fjord at temperatures upward of 80 degrees Fahrenheit.

This cooling effect resulted in the drastic temperature change we experienced as we moved from the front to the back of the storage container the Northern Bitcoin team showcased. The near frigid-climate of the frontend, fitting enough for a pullover or heavy cardigan, gave way to a circulation-parched, baking air on the backend, an atmosphere more suited for swimsuits and flip-flops than the mild winter gear we were sporting at the time.

On the front end, the ASIC miners hard at work in the temperature-controlled shipping container.

The temperature change was palpable and drastic, enough to give one the impression of how pivotal the mine’s natural and artificial cooling features are to making the operation sustainable — and profitable.

When asked by a German reporter how low bitcoin would need to drop to throw the operation into the red, Schultz gave a confident, if esoteric and pithy, reply.

“Very low.”

Scaling: A Look Forward

As Schultz put it, given its access to intrinsic cooling techniques and clean energy, “right from the start the infrastructure for fast growth was in place.” Having only operated in the Lefdal mine since May of 2018, Northern Bitcoin has harnessed the infrastructure and its unique setup and to an impressive and expedient effect. A single container turned 16-container operation, the company claims to invest 100 percent of its mining profits back into infrastructure to scale further.

One of three streets where Northern Bitcoin has parked their shipping containers.

At its current size, the farm averages a hash rate of 47,000 TH/s. Even still, this nets them just below 1 percent of the entire Bitcoin network’s hashrate, a far cry behind AntPool, Slush Pool, BTC.com and BTC.top.

The difference here being that Northern Bitcoin does not operate as a mining pool. As the company continues to grow, however, it plans to expand its reach by establishing a pool for serious, larger-scale projects to join, giving special preference to those miners who tap into renewable energy.

“The next step is the opening of our mining pool for miners worldwide at the end of August. As one of very few mining pools worldwide, we support ‘Asic-Boost.’ We plan to promote miners who engage in green sustainable mining … to build a greener Bitcoin network to secure its future prosperity,” Schultz said

In addition to opening up a pool, Schultz stated that Northern Bitcoin will provide different cloud mining services for individuals and entities that lack the technical knowledge and proficiency to engage in the practice themselves.

These mining services are the company’s next target in what is proving to be a continuous period of growth. If it scales its operations in the future as well as it has in the past, it’ll likely be a boon for the company’s investors, which included a handful of family offices and private equity firms, one of which, Singularity Capital, owns a hefty 60 percent of the company.

Taking Steps Toward A Greener Network

At the height of bitcoin’s run-up last year, price wasn’t the only metric on people’s mind.

Media outlets, crypto and mainstream alike, published articles telling a grim story of Bitcoin’s electrical consumption. Some of the more alarmist voices framed this usage as one of the graver threats to our ecosystem. The way they spun it, you’d think Bitcoin had upstaged other sources of carbon emissions as the focus of debates surrounding climate change.

Bitcoin’s power use certainly deserves attention in the world’s and the industry’s conscious, and it’s important to remain critical and vigilant when examining the topic. That said, many reports and articles on the topic favored a sensationalized perspective over a comprehensive one, as they rarely delved into the means through which bitcoin can be mined through clean, renewable means.

As Katrina Kelly argues in a recently published piece for The Conversation, the bitcoin energy debate rarely looks into where the energy is sourced and how it is produced.

“Not all types of energy generation are equal in their impact on the environment, nor does the world uniformly rely on the same types of generation across states and markets,” she argues in the article. Not all energy production nets the same carbon emissions, Kelly’s argument goes, so not all mining operations are consuming electricity that is as detrimental to the environment as detractors claim.

Northern Bitcoin’s zero carbon emission mining is a testament to Kelly’s thesis. As with other companies dedicated to green mining, they’re reframing the debate on mining. If mining can be conducted in a responsible manner, as Northern Bitcoin’s operations demonstrate, this model challenges us to rethink how the network can scale in eco-friendly ways going forward.

Northern Bitcoin’s commitment to taking steps toward a greener future for Bitcoin includes an invitation to other renewable mining operations to join them with their mining pool. According to Jäger, clean mining must be the future; with it, we can secure a sustainable future for Satoshi Nakamoto’s creation to reach its potential.

Bitcoin is a genius creation and the most valuable cryptocurrency for now. It is the most effective way to store value and participate in global trade for people living in countries with unstable currencies. We anticipate a bright future for Bitcoin and that it will impact the lives of billions of people. As it consumes a lot of energy, the future of Bitcoin has to be green. That is why we focus on green, sustainable mining of bitcoin.

This article originally appeared on Bitcoin Magazine.

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SoftBank Denies Reports of Bitmain Deal; Bitmain Still Silent

SoftBank Denies Reports of Bitmain Deal; Bitmain Still Silent

Japanese telecom giant SoftBank has denied media reports of its involvement in a pre-IPO funding round of bitcoin mining rig manufacturer Bitmain.

Last week, several media outlets had reported that SoftBank and Chinese internet giant Tencent were leading a pre-IPO funding round for Bitmain. The new information comes on the heels of a report that shows Bitmain unloaded most of its bitcoin (BTC) to accumulate bitcoin cash (BCH).

According to last week’s story, SoftBank and Tencent invested an undisclosed amount of money in the world’s most valuable bitcoin mining rig maker, bringing its valuation to about $15 billion a few weeks before its planned Hong Kong IPO.

Originally published on the Chinese platform QQ on August 4, 2018, the story was rapidly reproduced and reblogged around the world, It claimed that the funding round was made up of several investors including China Gold, SoftBank and Tencent.

Crypto news publication Cointelegraph reports, however, that following last week’s widely syndicated story, an anonymous source reached out with a tip stating that neither SoftBank nor Tencent were actually involved in the pre-IPO funding round.

Responding to Bitcoin Magazine’s request for comment, Kenichi Yuasa of SoftBank’s corporate communication office called the rumors “background talk” not worth mentioning, stating:

Neither the SoftBank Group Corp. nor the SoftBank Vision Fund were involved in the deal.

SoftBank has been noted for its interest in blockchain technology, having trialed a blockchain-based, cross-carrier telecom payment system in September 2017. Tencent, for its part, is now counted as a truly global tech player, having surpassed Facebook’s market capitalization in 2017.

Investment from either of these behemoths would not only strengthen Bitmain’s financial position but would also indicate to the market that they believe in its long-term growth potential.

Conversely, if the story was shared with an intent to deceive the market, this could lend credence to a growing number of voices that believe that Bitmain is not inhabiting the fantastic market space it claims to be.

Blockstream Chief Strategy Officer Samson Mow is one of those voices. On August 11, 2018, Mow posted a tweet showing Bitmain’s Q1 2018 results with the following comment:

Why is Bitmain raising capital so fast & only showing Q1 results to pre-IPO investors? We’re well into Q3 now. The reason is Q2 was a disaster. Bitmain is sitting on a massive $1.24 billion in inventory & S9 prices dropped by ~85%! Q2 losses range in the $600-700 millions.

In response, other voices around the crypto world have also been speculating about Bitmain’s exact market position. Some opine that it is possible that Bitmain is not being totally upfront about its market position, in essence sitting on an extensive inventory of unsold miners in a bear market and trying to use an IPO as an exit strategy to leave investors figuratively holding the bag.

Responding to a request for comment from Bitcoin Magazine Tina Dang from Bitmain’s International PR and Communications Department said, “Unfortunately, we are unable to comment on these topics.”

Updates to follow as this story develops.

This article originally appeared on Bitcoin Magazine.

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Vietnamese Government Bans Mining Hardware Imports

Vietnam

Following a high-level proposal in July to ban the importation of all cryptocurrency mining equipment into Vietnam, the Vietnamese Customs Department has announced a total ban on all mining rig imports, according to a local news outlet.

The ban comes at a time when the country is dealing with the fallout of July’s Sky Mining scandal, which saw the CEO of a crypto mining firm abscond with more than $35 million in company and investor funds.

Zero Tolerance Stance

According to data from the Ho Chi Minh City Customs Department, crypto mining equipment imports were shuttered by officials in July 2018. Before the restriction, private individuals and firms in the country brought in more than 3,664 mining rigs between January and June. These imports mostly consisted of Bitmain’s Antminer ASIC rigs.

Last year, more than 7,000 mining rigs were imported into the country despite the government’s noted anti-crypto stance. Following the Sky Mining scandal last month, however, local Vietnamese news outlets report that the Vietnamese Customs Department almost instantly imposed total import restrictions on miners, indicating that the government’s negative stance on crypto has morphed into open restriction.

Government Regulation

Prior to the policy change, Vietnam’s government had a reputation for being unwilling to regulate the cryptocurrency industry, bluntly declaring last year that bitcoin and other cryptocurrencies are not “lawful means of payment.” It also explicitly stated that issuing or using crypto as a means of payment within Vietnam is forbidden, indicating that it had no intention of officially engaging with crypto finance, whether the government has the resources to suppress it or not.

Despite the rhetoric, crypto mining persisted as a big business in Vietnam, with port authorities in Hanoi and Ho Chi Minh City issuing clearance for thousands of mining rigs intended to mine bitcoin and litecoin in 2017.

Officially, dealing with cryptocurrency trading has carried with it the risk of criminal prosecution and a fine of up to $9,000, but, until recently, the government generally seemed to turn a blind eye to crypto mining.

In May, the government decided to fine bitcoin.vn, a popular Vietnamese crypto exchange. The following month, Sky Mining investors who were already spooked by regulatory aggression toward crypto businesses noticed people claiming to be “maintenance personnel” clearing out the company’s mining facility. The personnel transported the mining rigs to an unknown destination while investors were left with no information other than a Facebook post by CEO Le Minh Tam, where he apologized and promised to declare bankruptcy.

This article originally appeared on Bitcoin Magazine.

Original Link

Trouble on the Horizon? What Last Weekend’s Ruckus Means for Bitmain’s IPO

Bitmain

Over the weekend, information surfaced that could suggest that mining giant Bitmain may be facing an uphill battle as it looks to launch an IPO on the Hong Kong stock exchange.

Newly leaked public information reveals that, in its pre-IPO presentation to investors, Bitmain provided insight into its cryptocurrency holdings, which shows that Bitmain unloaded most of its bitcoin (BTC) to accumulate bitcoin cash (BCH) in its stead. In a snapshot of a slide from the original presentation, the leftmost column titled “Digital quantity of money” shows Bitmain’s bitcoin supply decreased from 71,560 BTC to 22,082 from December 2016 to Q1 2018. Over the same period, its BCH holding increased to over 1 million coins.

Bitmain

Samson Mow, CSO of Blockstream, pointed out that Bitmain has incurred half a billion dollars in losses through its BCH holdings over the last three months alone. Scrutinizing the company further, Mow pointed out that Bitmain chose not to disclose financial data for its Q2 inventory in 2018. The tweet by Mow brings to light that Bitmain reported $1.24 billion in inventory for Q1 2018, while it has not mentioned any numbers for Q2 despite already being well into Q3, raising speculation that Q2 was omitted because the company may have realized a loss between $600-700 million.

In a recent Medium blog post, a pseudonymous blogger by the name of Crypto Herpes Cat points out that these losses, and the lack of transparency surrounding its reporting, could have an impact on Bitmain’s forthcoming IPO.

Why This Matters

All this could spell concern for Bitmain’s current and potential investors, although some investors have still expressed continued support for the company despite the recent debacle.

A recent twitter thread by Vijay Boyapati, a software engineer at Peach Inc. and a prominent crypto blogger, argues that “Bitmain entered one of the worst trades of 2017” when it chose to support bitcoin cash over bitcoin, going on to state that the mining giant is sitting on a such a large supply of the cryptocurrency that “they have no ability to exit its billion dollar position in BCash without a complete collapse in its price.”

As the evidence from the pre-IPO presentation suggests, Bitmain could be holding 5 percent of the total supply of bitcoin cash at a time when the altcoin is falling below its all-time lows. With market conditions like these, price stability is fragile, making it difficult for a large holder of any cryptocurrency to offload a large number of coins without severely affecting the price. Given its stash of bitcoin cash, Bitmain could risk tanking the price even further, something that would obviously be against its own interests.

Another part of Bitmain’s business is also struggling thanks to increased competition from competitors like GMO, Avalon and Ebang, who have started producing more efficient chips than the 16nm ones that Bitmain’s S9 miner uses, according to Crypto Herpes Cat.

Market saturation and an overall decrease in demand for miners during the prolonged bear market has caused Bitmain, the largest Bitcoin mining hardware company, to incur what may be a substantial loss on its balance sheet. For instance, the antminer s9, Bitmain’s latest and most sophisticated ASIC, once sold for $3,500; now, it’s selling for $700 — a decline of over 80 percent.

The majority of Bitmain’s value, however, is derived from its treasure trove of crypto assets like bitcoin cash, as well as future cash flows from selling mining equipment. During the bull market that saw bitcoin rise to almost $20,000, the same speculative demand that drove prices and mining interest fueled the majority of Bitmain’s business. But since bitcoin’s price has retreated some 70 percent from its all-time highs, the demand for ASIC miners has decreased as well.

Through multiple funding rounds in 2017 and 2018, Bitmain witnessed its valuation balloon to $12 billion, and its IPO valuation has it figured upward of $40 billion.

Now, there is some speculation as to the motives behind Bitmain’s IPO, including suggestions that they may be providing a way for Bitmain to right the ship by offloading onto retail investors. Since Bitmain’s value was derived from its speculative business strategies, its IPO may be a way to sell part of its company at the high valuation they earned during the bull market, Crypto Herpes Cat suggests.

How Did Bitmain Get Here?

Bitmain’s support for Bitcoin Cash has lined up with its narrative since the original hard fork in August 2017. Jihan Wu, CEO and co-founder of Bitmain, has sat alongside proponents like Roger Ver in defending it as the future of Bitcoin and money.

More than this, as an unofficial continuation of Bitmain’s “BIP148 contingency plan,” Bitcoin Cash was effectively initiated by Bitmain, while Bitmain-affiliated mining pool ViaBTC realized the coin by mining its first blocks. Between ViaBTC and its other proxy mining pools, Bitmain supported and mined bitcoin cash from its inception, accumulating a large number on top of what it had already received during the fork.

Through its mining pools, Bitmain supported and mined bitcoin cash, accumulating a large amount on top of what it had already received as a result of the fork. Bitmain has also made substantial investments into projects supporting bitcoin cash, investing $3 million into a bitcoin cash-powered, digital advertising platform.

Bitmain has not responded to Bitcoin Magazine’s request for comment at this time.

This article originally appeared on Bitcoin Magazine.

Original Link

Op Ed: Is Green Crypto (Necessarily) an Oxymoron?

Op Ed: Is Green Crypto an Oxymoron?

Cryptocurrencies are not exactly bathed in the light of righteousness right now when it comes to the environment. Despite not having a physical form, they are ultimately responsible for a substantial amount of environmental impact. This has stemmed from news stories detailing how, in Iceland, more electricity is being used to mine Bitcoin than is used to power its homes, or that Bitcoin mining now uses as much energy as all of Ireland consumes. Sensationalist as these headlines might be, there is no denying that Bitcoin, Ethereum and the myriad of minable altcoins are responsible for significant power consumption today.

These headlines are why people are more aware of the perceived negative impacts of cryptocurrency mining than they are of the process of mining itself. To grossly oversimplify the process, every 10 minutes a bundle of transactions are encrypted in a block, which is added to the blockchain. Bitcoin miners bundle said transactions into blocks by hashing the transactions together in a Merkle tree, then solving a so-called “proof-of-work” puzzle. This puzzle takes the form of a series of mathematical equations used one after another until the “winning” equation is solved. At this point, the block is verified and added to the blockchain. In return, the miner (or consortium) receive the transaction fees and a predetermined allocation of coins for their efforts. For Bitcoin, this reward currently amounts to roughly $14 million per day.

Critically, the difficulty of the mining task adjusts automatically every two weeks in order to maintain a block creation rate of roughly one every 10 minutes. This means that increasing computing power will not result in more coins being created. Instead, the computation task just consumes more computing power to maintain the status quo of production. This system makes existing mining hardware less profitable and drives up the amount of energy consumed per bitcoin earned.

According to Digiconomist, the Bitcoin network currently consumes about 71 TWh of electricity per year, with the Ethereum network a distant second consuming about 21 TWh. Together, they account for energy consumption on par with the United Arab Emirates (~96 TWh per year). Economist Alex de Vries boldly predicted currency mining could consume 0.5 percent of the world’s energy in 2018, something that has put cryptocurrencies — and bitcoin in particular — in the firing line of multiple environmental groups.

Obviously, this would be a moot point if all mining was being powered by renewable sources like solar, wind or hydroelectric power (Iceland is powered entirely by geothermal and hydro power for example). However, an estimated 60 percent of the mining hash power originates from China. Furthermore, 70 percent of the electricity in China is generated by non-renewable sources, particularly coal. It shows that Iceland’s sustainable cryptomining is the exception rather than the rule. Put simply, cryptomining is not all powered by coal, but it mostly is.

Common environmental criticisms of cryptocurrencies often neglect to put the issue in the context of the wider financial sector’s impact. The devastating physical mining of metals to create obsolete coins is a key example. Also, the big banks are fundamentally unable to wean themselves off the massive energy consumption required to keep every headquarters, branch and ATM operating.

That said, if the crypto community really believes itself to be the future, it needs to do better than finger-pointing and petty whataboutism when it comes to environmental issues. How, therefore, do we rehabilitate crypto and blockchain technology to be greener?

The idea of “green crypto” is not a misnomer. There are initiatives out there that encourage more responsible cryptomining. The Canadian province of Québec has actively courted cryptocurrency companies to use its spare hydropower capacity. Recently, actor William Shatner threw his significant weight behind Solar Alliance, a Canadian company building a three-megawatt solar farm that can be rented out to cryptocurrency miners.

The emergence of similar projects is a positive sign for greater investment in crypto’s greener side. While most of these projects receive the bulk of their funding through the ICO route, more traditional investments and partnerships have been effective in driving mainstream visibility of the solutions they provide. Electrify Asia is one such project, raising $29 million through an ICO and going on to secure the backing of one of Ethereum’s original founding team members Wendell Davis, along with prominent Japanese VC group Global Brain.

Another example of mainstream investment in green crypto projects is Climate Coin, which has the backing of tech specialist PAL Capital. Climate Coin operates as a crypto-based carbon credit that can be purchased by anyone worldwide to offset their carbon footprint. On a macro level, energy-focused blockchain startups like this raised over $300 million between Q2 2017 and Q1 2018 alone, most of which came through ICOs. This level of investment, in what would have been a technological fantasy only a short time ago, is a sign that blockchain technology is being taken seriously by energy companies.

From an economic standpoint, increased investment from existing utility companies is inevitable. Blockchains’ penchant for decentralization blends well with existing energy-saving practices. In small scale use cases, the technology is enabling smaller companies to enter markets long monopolized by big energy companies.

Various initiatives are using a peer-to-peer exchange model to trade cheap renewable energy, circumventing the need and cost of buying energy from established suppliers. By motivating small renewable energy producers to sell directly to energy users, and using smart contracts to earn credits in the form of fungible crypto assets from any excess power produced, there is an opportunity to make the existing energy ecosystem cheaper, more efficient and consumer friendly.

While less common, there are still many crypto- and blockchain-based companies directly addressing environmental unsustainability. One blockchain-based initiative is the Plastic Bank, run with the support of partners including IBM. It is issuing tokens earned from collecting plastic waste to help impoverished communities. These tokens can then be converted into cash, exchanged for cooking fuel or education vouchers, demonstrating the good that this technology can do for the less fortunate.

Energi Mine is using a similar system, providing the cryptocurrency EnergiTokens (ETK) to consumers when they engage in energy-saving activities such as using public transport or buying energy-efficient appliances to reduce energy consumption. The ultimate goal of this is to cut global energy demand and carbon emissions by creating a system of financial incentives, which will subtlety shift positive energy decisions to become unconscious reflexes.

In this way, some blockchain and cryptocurrency companies are taking a holistic approach to tackling the established “rebound effect” — where the reduction in energy consumption created by new technologies and new efficiencies gets cancelled out by negative behavioral or other systemic responses. This is something that happens often without people realizing it. For instance, a 5 percent improvement in vehicle fuel efficiency may result in only a 3 percent drop in fuel use because 2 percent more fuel is consumed by people being able to afford to drive faster or further than before.

This is a well-documented phenomenon in the conservation space, and cryptominers are especially guilty of this. Every advancement in processor efficiency or cooling is negated by the gradual upward creep in mining power consumption needed to stay competitive.

This very phenomenon, however, could provide an opportunity for the industry to contribute to energy-saving technology in a huge way. The power/efficiency ratio demanded by cryptominers has given rise to an arms race in specialized hardware that can be used to mine cryptocurrencies more efficiently. A meaningful investment in green tech here would have an impact not only on the crypto community, but on the green hardware sector as a whole, especially if some of the breakthroughs can be extrapolated to other uses, which would go a long way toward creating a “good citizen” reputation for the crypto space.

Whether it is making sure that the energy for cryptomining comes from renewable sources, or simply investing in green-minded initiatives pioneered by the crypto and blockchain community, everyone in the sector can do something to reduce or offset its environmental impact. If crypto truly is the future of money, then the crypto community should feel obliged to do more to change the world for the better. Not just from a financial standpoint but from an environmental one as well.

This is a guest post by Omar Rahim, CEO of Energi Mine. Views expressed are his own and do not necessarily reflect those of Bitcoin Magazine or BTC Inc.

This article originally appeared on Bitcoin Magazine.

Original Link

Cease and Desist Order Against Genesis Mining Now Withdrawn

After five long months of working with South Carolina officials, Genesis Mining has been dropped from the cease and desist order it received back in March 2018 from the South Carolina Securities Division. The company will relaunch to U.S.-based customers shortly. This marks one of the first times a blockchain company has fought back against regulators and been successful.

Shah Hafizi, chief compliance officerCOO and general counsel at Genesis Mining, released the following statement:

“We are happy to announce that the South Carolina securities division has dismissed Genesis Mining from its March 9, 2018, cease and desist. One of our company[‘s] principles is transparency. After all, it is a core value of blockchain technologies. Over the past five months, we’ve worked closely with South Carolina officials to educate them and provide a practitioner’s perspective on mining, blockchain networks and the decentralized nature of the technologies we support.”

He continued on to say, “By working together with regulators, we can ensure that investors are protected, and innovation is not stifled. We believe for the industry to reach its true potential, companies and regulators need to collaborate. We strongly encourage blockchain companies, regardless of where they are in the world, to proactively engage with local regulators at all levels.”

Hafizi joined the Genesis Mining staff back in April 2018. He previously served as the chief compliance officer at BlackRock, Inc., a global investment management firm, where he oversaw both digital and technology ventures. Amongst his duties with Genesis Mining is leading the company’s global regulatory and government affairs. He also works to shape the business’s compliance framework and support its initiatives in the Americas.

When Genesis Mining was first issued the cease and desist, mining contracts sold to residents were considered securities. According to the state’s Securities Commission office, Swiss Gold Global — which was also named in the cease and desist — was alleged to be working as a broker-dealer for Genesis Mining. Representatives stated that the company wasn’t registered in South Carolina and was therefore unauthorized to offer or sell securities to residents.

Buyers were able to purchase specific amounts of computing power over certain periods that were then hosted on third-party platforms. This constituted investment contracts or securities per the Commission office. Authorities then barred both Genesis Mining and Swiss Gold Global from doing business within the state, and both companies were barred from offering securities in South Carolina in the future.

Tracy Meyers, the deputy securities commissioner, announced the end of the cease and desist on July 26, 2018:

“The Securities Division of the Office of the Attorney General of the State of South Carolina, after receiving information regarding matters detailed in the Administrative Order to Cease and Desist issued … upon due consideration of such information, finds good cause has been shown to vacate the [order].”

Founded in 2013, Genesis Mining is one of the largest companies providing cloud mining services to blockchain companies. Based in Iceland, it is allegedly among the nation’s largest consumers of electricity.

At press time, the cease and desist order against Swiss Gold Global remains active.

Original Link

Cease and Desist Order Against Genesis Mining Now Withdrawn

After five long months of working with South Carolina officials, Genesis Mining has been dropped from the cease and desist order it received back in March 2018 from the South Carolina Securities Division. The company will relaunch to U.S.-based customers shortly. This marks one of the first times a blockchain company has fought back against regulators and been successful.

Shah Hafizi, chief compliance officerCOO and general counsel at Genesis Mining, released the following statement:

“We are happy to announce that the South Carolina securities division has dismissed Genesis Mining from its March 9, 2018, cease and desist. One of our company[‘s] principles is transparency. After all, it is a core value of blockchain technologies. Over the past five months, we’ve worked closely with South Carolina officials to educate them and provide a practitioner’s perspective on mining, blockchain networks and the decentralized nature of the technologies we support.”

He continued on to say, “By working together with regulators, we can ensure that investors are protected, and innovation is not stifled. We believe for the industry to reach its true potential, companies and regulators need to collaborate. We strongly encourage blockchain companies, regardless of where they are in the world, to proactively engage with local regulators at all levels.”

Hafizi joined the Genesis Mining staff back in April 2018. He previously served as the chief compliance officer at BlackRock, Inc., a global investment management firm, where he oversaw both digital and technology ventures. Amongst his duties with Genesis Mining is leading the company’s global regulatory and government affairs. He also works to shape the business’s compliance framework and support its initiatives in the Americas.

When Genesis Mining was first issued the cease and desist, mining contracts sold to residents were considered securities. According to the state’s Securities Commission office, Swiss Gold Global — which was also named in the cease and desist — was alleged to be working as a broker-dealer for Genesis Mining. Representatives stated that the company wasn’t registered in South Carolina and was therefore unauthorized to offer or sell securities to residents.

Buyers were able to purchase specific amounts of computing power over certain periods that were then hosted on third-party platforms. This constituted investment contracts or securities per the Commission office. Authorities then barred both Genesis Mining and Swiss Gold Global from doing business within the state, and both companies were barred from offering securities in South Carolina in the future.

Tracy Meyers, the deputy securities commissioner, announced the end of the cease and desist on July 26, 2018:

“The Securities Division of the Office of the Attorney General of the State of South Carolina, after receiving information regarding matters detailed in the Administrative Order to Cease and Desist issued … upon due consideration of such information, finds good cause has been shown to vacate the [order].”

Founded in 2013, Genesis Mining is one of the largest companies providing cloud mining services to blockchain companies. Based in Iceland, it is allegedly among the nation’s largest consumers of electricity.

At press time, the cease and desist order against Swiss Gold Global remains active.

Original Link

Cease and Desist Order Against Genesis Mining Now Withdrawn

After five long months of working with South Carolina officials, Genesis Mining has been dropped from the cease and desist order it received back in March 2018 from the South Carolina Securities Division. The company will relaunch to U.S.-based customers shortly. This marks one of the first times a blockchain company has fought back against regulators and been successful.

Shah Hafizi, chief compliance officerCOO and general counsel at Genesis Mining, released the following statement:

“We are happy to announce that the South Carolina securities division has dismissed Genesis Mining from its March 9, 2018, cease and desist. One of our company[‘s] principles is transparency. After all, it is a core value of blockchain technologies. Over the past five months, we’ve worked closely with South Carolina officials to educate them and provide a practitioner’s perspective on mining, blockchain networks and the decentralized nature of the technologies we support.”

He continued on to say, “By working together with regulators, we can ensure that investors are protected, and innovation is not stifled. We believe for the industry to reach its true potential, companies and regulators need to collaborate. We strongly encourage blockchain companies, regardless of where they are in the world, to proactively engage with local regulators at all levels.”

Hafizi joined the Genesis Mining staff back in April 2018. He previously served as the chief compliance officer at BlackRock, Inc., a global investment management firm, where he oversaw both digital and technology ventures. Amongst his duties with Genesis Mining is leading the company’s global regulatory and government affairs. He also works to shape the business’s compliance framework and support its initiatives in the Americas.

When Genesis Mining was first issued the cease and desist, mining contracts sold to residents were considered securities. According to the state’s Securities Commission office, Swiss Gold Global — which was also named in the cease and desist — was alleged to be working as a broker-dealer for Genesis Mining. Representatives stated that the company wasn’t registered in South Carolina and was therefore unauthorized to offer or sell securities to residents.

Buyers were able to purchase specific amounts of computing power over certain periods that were then hosted on third-party platforms. This constituted investment contracts or securities per the Commission office. Authorities then barred both Genesis Mining and Swiss Gold Global from doing business within the state, and both companies were barred from offering securities in South Carolina in the future.

Tracy Meyers, the deputy securities commissioner, announced the end of the cease and desist on July 26, 2018:

“The Securities Division of the Office of the Attorney General of the State of South Carolina, after receiving information regarding matters detailed in the Administrative Order to Cease and Desist issued … upon due consideration of such information, finds good cause has been shown to vacate the [order].”

Founded in 2013, Genesis Mining is one of the largest companies providing cloud mining services to blockchain companies. Based in Iceland, it is allegedly among the nation’s largest consumers of electricity.

At press time, the cease and desist order against Swiss Gold Global remains active.

Original Link

Google Play Store Removes Mining Apps from Offerings

Google just nixed any app that mines cryptocurrencies from its Play Store.

With a recent update to the store’s policies, the tech monolith rewrote its stance on cryptocurrency apps.

We don’t allow apps that mine cryptocurrency on devices. We permit apps that remotely manage the mining of cryptocurrency.

As the latter half of the policy indicates, other mining applications, such as those that facilitate cloud and other forms of remote mining, will not be removed.

The policy change is a stricter version of the cryptocurrency mining extension ban Google effected in April of 2018. It also puts Google in the company of Apple, which banned cryptocurrency mining apps from its App Store and smart devices this June.

These prohibitions are likely to call to mind recent steps legacy tech companies have taken against the cryptocurrency ecosystem. Earlier this year, Google, Facebook and Twitter instituted industry-wide bans of cryptocurrency and blockchain-related ads. Since such ads were shuttered, Facebook has reversed its decision, though Google and Twitter have stood by theirs, thus far.

Explaining its reasoning for the original ban, Facebook indicated that it sought to steer its users from “misleading or deceptive promotional practices.” And per its reversal, the social media giant also indicated that it would work on sifting the bad actors from the good and revisit its policy later.

“This policy is intentionally broad while we work to better detect deceptive and misleading advertising practices, and enforcement will begin to ramp up across our platforms including Facebook, Audience Network and Instagram. We will revisit this policy and how we enforce it as our signals improve.”

Like Facebook’s original blanket ban and subsequent amendment, Google barring exposure for cryptocurrency mining apps may be from a place of pragmatism and not competitive malice.

As cryptojacking and mining malware rise as persistent cyber threats, Google’s mining restrictions could be an attempt to mitigate the proliferation of such malware on the company’s Play Store. Recently, the store has become a target of hackers who covertly embed their malware into its app offerings, leaving users to mine cryptocurrencies like Monero through these applications unawares.

Original Link

Google Play Store Removes Mining Apps from Offerings

Google just nixed any app that mines cryptocurrencies from its Play Store.

With a recent update to the store’s policies, the tech monolith rewrote its stance on cryptocurrency apps.

We don’t allow apps that mine cryptocurrency on devices. We permit apps that remotely manage the mining of cryptocurrency.

As the latter half of the policy indicates, other mining applications, such as those that facilitate cloud and other forms of remote mining, will not be removed.

The policy change is a stricter version of the cryptocurrency mining extension ban Google effected in April of 2018. It also puts Google in the company of Apple, which banned cryptocurrency mining apps from its App Store and smart devices this June.

These prohibitions are likely to call to mind recent steps legacy tech companies have taken against the cryptocurrency ecosystem. Earlier this year, Google, Facebook and Twitter instituted industry-wide bans of cryptocurrency and blockchain-related ads. Since such ads were shuttered, Facebook has reversed its decision, though Google and Twitter have stood by theirs, thus far.

Explaining its reasoning for the original ban, Facebook indicated that it sought to steer its users from “misleading or deceptive promotional practices.” And per its reversal, the social media giant also indicated that it would work on sifting the bad actors from the good and revisit its policy later.

“This policy is intentionally broad while we work to better detect deceptive and misleading advertising practices, and enforcement will begin to ramp up across our platforms including Facebook, Audience Network and Instagram. We will revisit this policy and how we enforce it as our signals improve.”

Like Facebook’s original blanket ban and subsequent amendment, Google barring exposure for cryptocurrency mining apps may be from a place of pragmatism and not competitive malice.

As cryptojacking and mining malware rise as persistent cyber threats, Google’s mining restrictions could be an attempt to mitigate the proliferation of such malware on the company’s Play Store. Recently, the store has become a target of hackers who covertly embed their malware into its app offerings, leaving users to mine cryptocurrencies like Monero through these applications unawares.

Original Link

Google Play Store Removes Mining Apps from Offerings

Google just nixed any app that mines cryptocurrencies from its Play Store.

With a recent update to the store’s policies, the tech monolith rewrote its stance on cryptocurrency apps.

We don’t allow apps that mine cryptocurrency on devices. We permit apps that remotely manage the mining of cryptocurrency.

As the latter half of the policy indicates, other mining applications, such as those that facilitate cloud and other forms of remote mining, will not be removed.

The policy change is a stricter version of the cryptocurrency mining extension ban Google effected in April of 2018. It also puts Google in the company of Apple, which banned cryptocurrency mining apps from its App Store and smart devices this June.

These prohibitions are likely to call to mind recent steps legacy tech companies have taken against the cryptocurrency ecosystem. Earlier this year, Google, Facebook and Twitter instituted industry-wide bans of cryptocurrency and blockchain-related ads. Since such ads were shuttered, Facebook has reversed its decision, though Google and Twitter have stood by theirs, thus far.

Explaining its reasoning for the original ban, Facebook indicated that it sought to steer its users from “misleading or deceptive promotional practices.” And per its reversal, the social media giant also indicated that it would work on sifting the bad actors from the good and revisit its policy later.

“This policy is intentionally broad while we work to better detect deceptive and misleading advertising practices, and enforcement will begin to ramp up across our platforms including Facebook, Audience Network and Instagram. We will revisit this policy and how we enforce it as our signals improve.”

Like Facebook’s original blanket ban and subsequent amendment, Google barring exposure for cryptocurrency mining apps may be from a place of pragmatism and not competitive malice.

As cryptojacking and mining malware rise as persistent cyber threats, Google’s mining restrictions could be an attempt to mitigate the proliferation of such malware on the company’s Play Store. Recently, the store has become a target of hackers who covertly embed their malware into its app offerings, leaving users to mine cryptocurrencies like Monero through these applications unawares.

Original Link

Canadian Cryptocurrency Miner to Install 85-Megawatt Power Substation

DMG Blockchain Solutions Inc., a diversified blockchain company, is in the process of installing an 85-megawatt transformer and electric substation for the company’s cryptocurrency mining facility, according to a company statement. The new substation is  commissioned to be operational by September 2018, with 60 megawatts available for energizing mining rigs.

The Canadian company offers a range of services including Mining as a Service (MaaS),where it manages bitcoin mining on behalf of third parties at scale. The installation of the new substation is expected to “increase DMG’s hosting capability by more than 20 times.”

DMG runs its crypto mining facilities as a hybrid, both serving its clients and using the facilities to mine on its own behalf. The company says this approach allows it to “scale at a faster pace” compared to a “pure mining model,” as it can “balance the capital requirements” and investor’s ROI with the “steady revenue” generated from the MaaS model.

DMG’s CEO Dan Reitzik and COO Sheldon Bennett spoke to Bitcoin Magazine about the new installation.

“DMG is pleased with its progress toward becoming a leading provider of crypto-mining hosting services in North America,” said Reitzik. “Building the power infrastructure for 85 megawatts in a compressed time frame is a herculean task that truly demonstrates how well the DMG team is executing.”

Bennett highlighted the learning curve the company has had to go through but said they were better for it. According to Bennett, DMG can now scale their mining capacity through a process of “step-and-repeat of our current flagship mining facility.”

The new substation will be connected to the utility power grid, and the company expects it to generate an additional 60 megawatts, when it launches, which will be used to power mining rigs.

EVP for Corporate Development Steven Eliscu added that the combination of “leading-edge mining equipment and access to low-cost power” makes him “optimistic” about the future of the company.

Original Link

Canadian Cryptocurrency Miner to Install 85-Megawatt Power Substation

DMG Blockchain Solutions Inc., a diversified blockchain company, is in the process of installing an 85-megawatt transformer and electric substation for the company’s cryptocurrency mining facility, according to a company statement. The new substation is  commissioned to be operational by September 2018, with 60 megawatts available for energizing mining rigs.

The Canadian company offers a range of services including Mining as a Service (MaaS),where it manages bitcoin mining on behalf of third parties at scale. The installation of the new substation is expected to “increase DMG’s hosting capability by more than 20 times.”

DMG runs its crypto mining facilities as a hybrid, both serving its clients and using the facilities to mine on its own behalf. The company says this approach allows it to “scale at a faster pace” compared to a “pure mining model,” as it can “balance the capital requirements” and investor’s ROI with the “steady revenue” generated from the MaaS model.

DMG’s CEO Dan Reitzik and COO Sheldon Bennett spoke to Bitcoin Magazine about the new installation.

“DMG is pleased with its progress toward becoming a leading provider of crypto-mining hosting services in North America,” said Reitzik. “Building the power infrastructure for 85 megawatts in a compressed time frame is a herculean task that truly demonstrates how well the DMG team is executing.”

Bennett highlighted the learning curve the company has had to go through but said they were better for it. According to Bennett, DMG can now scale their mining capacity through a process of “step-and-repeat of our current flagship mining facility.”

The new substation will be connected to the utility power grid, and the company expects it to generate an additional 60 megawatts, when it launches, which will be used to power mining rigs.

EVP for Corporate Development Steven Eliscu added that the combination of “leading-edge mining equipment and access to low-cost power” makes him “optimistic” about the future of the company.

Original Link

Canadian Cryptocurrency Miner to Install 85-Megawatt Power Substation

DMG Blockchain Solutions Inc., a diversified blockchain company, is in the process of installing an 85-megawatt transformer and electric substation for the company’s cryptocurrency mining facility, according to a company statement. The new substation is  commissioned to be operational by September 2018, with 60 megawatts available for energizing mining rigs.

The Canadian company offers a range of services including Mining as a Service (MaaS),where it manages bitcoin mining on behalf of third parties at scale. The installation of the new substation is expected to “increase DMG’s hosting capability by more than 20 times.”

DMG runs its crypto mining facilities as a hybrid, both serving its clients and using the facilities to mine on its own behalf. The company says this approach allows it to “scale at a faster pace” compared to a “pure mining model,” as it can “balance the capital requirements” and investor’s ROI with the “steady revenue” generated from the MaaS model.

DMG’s CEO Dan Reitzik and COO Sheldon Bennett spoke to Bitcoin Magazine about the new installation.

“DMG is pleased with its progress toward becoming a leading provider of crypto-mining hosting services in North America,” said Reitzik. “Building the power infrastructure for 85 megawatts in a compressed time frame is a herculean task that truly demonstrates how well the DMG team is executing.”

Bennett highlighted the learning curve the company has had to go through but said they were better for it. According to Bennett, DMG can now scale their mining capacity through a process of “step-and-repeat of our current flagship mining facility.”

The new substation will be connected to the utility power grid, and the company expects it to generate an additional 60 megawatts, when it launches, which will be used to power mining rigs.

EVP for Corporate Development Steven Eliscu added that the combination of “leading-edge mining equipment and access to low-cost power” makes him “optimistic” about the future of the company.

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PoWx Seeks to Change Bitcoin Mining with “Optical PoW”

Nonprofit organization PoWx has launched this week with the goal of boosting the idea behind proof of work (PoW) through more innovative algorithms. The company is seeking to decentralize Bitcoin mining and make it more accessible to consumers through a new technology that executives have dubbed “optical PoW” — a new type of hardware that utilizes a more advanced and energy-efficient form of laser technology as the cornerstone of mining.

Bitcoin and cryptocurrency mining is usually off limits to those who cannot afford the expensive mining computers and equipment. In addition, miners are usually stuck dealing with high energy bills and excessive consumption of electricity. It is estimated that approximately 0.15 percent of the world’s energy is used to mine cryptocurrency.

This is where optical PoW comes into play. PoWx founder Michael Dubrovsky says the technology can alter Bitcoin’s current algorithm to make mining more decentralized and that the software’s advancements could make the mining arena “healthy enough and scalable enough.”  

The idea for optical PoW arose last year. Dubrovsky says concern was growing that the mining space would eventually become more centralized. Dubrovsky and the PoWx team specifically point their fingers at Bitmain, the Chinese mining giant largely responsible for building and supplying most of the necessary equipment to power Bitcoin mining.

Speaking with Bitcoin Magazine, Bitcoin Core and Bitcoin Knots developer Luke Dashjr said he’s all for optical PoW and believes the mining scene as it stands could damage the future of cryptocurrency.

“Bitmain has compromised Bitcoin’s security, so changing to a new proof-of-work algorithm is necessary to secure the network again,” he commented. “One problem that enables mining centralization is that electricity costs are lower for large corporations than they are for ordinary users. Optical PoW claims it can eliminate this problem, and since it is an entirely new kind of technology, it also eliminates almost all of Bitmain’s advantages in trying to monopolize a new algorithm.”

If the new algorithm passes, mining chips could become less expensive, thereby potentially increasing the level of decentralization. In addition, optical PoW would make mining more efficient, which would allow miners to extract more coins in less time, giving them the opportunity to compensate for respective energy usage.

Unfortunately, PoWx still has several obstacles to overcome, the biggest one being a lack of funding. At press time, the company is garnering very little monetary assistance.

Furthermore, switching Bitcoin’s current proof-of-work algorithm won’t be easy. Every user will be required to update their own software, and in the end, it will be up to the public to either accept or reject the idea. Granted several users dismiss it or decide it’s not in their best interest, Bitcoin may “split” again as it did several times before, which has resulted in the creation of Bitcoin Cash, Bitcoin Gold and other so-called “forkcoins.”

Dashjr believes this could cause several hurdles. “Any PoW change requires consensus from the entire community, and thus far, it doesn’t seem probable that we will achieve that, in large part due to FUD [Fear, Uncertainty and Doubt] spread by miners who make it sound more dramatic than the simple change it really is,” he claims. “The community will need to overcome these unwarranted fears before Bitcoin can successfully migrate to a new algorithm.”

However, the company’s long-term goals remain ambitious. Dubrovsky estimates the release date of optical PoW to be early 2019. PoWx is also seeking to build a second company — Arrakis Photonics — that will put the hardware into practice.

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Bitmain Nears 51% of Network Hash Rate: Why This Matters and Why It Doesn’t

Recent Bitcoin block data shows that Bitcoin’s mining pools BTC.com, AntPool and ConnectBTC, respectively mined about 25.7 percent, 16.1 percent and 0.2 percent of all new blocks over the past week. This makes for a combined hash rate of 42 percent; an all-time high for the Chinese mining giant’s mining pools.

Several media sources have since covered this news, reporting that this near-dominance is a major risk to the Bitcoin network.

How true are these claims?

51% Attacks

When mining bitcoin, new blocks are produced by mining computers. Each miner on the network competes with its counterparts to produce blocks, and the only way for a miner to effectively do this is to input different hashing combinations until they uncover a valid one.

Once a correct combination is found, the mined block is added to a chain. If there is more than one chain — for example, because different miners found different blocks at the same time — the mining nodes will try to add the block to the one with the longest history.

However, this also means that if one entity controls more than half of the computational power on the network, it can select an older block within the chain and begin re-mining everything from there. This new chain can then overtake the original one, and all previous transactions will become invalid. In other words, if a single entity controls over half of all hash power on the network, this entity can undo transactions, and therefore poses a threat to the network’s immutability, one of Bitcoin’s core features. This entity can also refuse to accept blocks mined by others, ensuring the competition never receives a fair shake, or blacklist particular Bitcoin addresses.

Incidents where a single entity gained control over half of all hash power on the network have occurred in the past. In July 2014, mining pool GHash.io exceeded the 51 percent mark and voluntarily brought itself down to 39 percent in response to growing concern. It subsequently advised other companies that exceeded certain limits to do the same.

Bitmain

Bitmain officially owns and controls three mining pools: AntPool, BTC.com and ConnectBTC. Combined, these pools control over 40 percent of the network hash rate, more than a company like GHash.io was willing to control.

But Bitmain may influence more mining pools. The company is, for example, the sole investor in ViaBTC, which controls about 8.9 percent of the network’s total hash rate. ViaBTC has had sudden rises of hash rate at times when this was of strategic advantage to Bitmain. This has lead many to suspect that ViaBTC was effectively a subsidiary of the mining hardware giant, even before the investment was made public. However, this has been officially denied by both Bitmain and ViaBTC.

In addition, sources close to the Chinese Bitcoin mining industry believe that Bitmain has a similar “unofficial” relation with mining pool BTC.TOP, which controls about 12 percent of the total network hash rate. BTC.TOP owner Jiang Zhuoer has also denied this.

Piecing all this together, it’s easy to see Bitmain’s influence on the network hash rate. Through the different mining pools it exerts influence over in one way or another, it may have already stepped beyond the 50 percent mark some time ago.

Hash Power

This doesn’t necessarily mean that Bitmain, itself, controls all the hash power directed at its pools. Even if the Chinese mining giant owns the mining pools, it’s possible that most of the hash power attributed to these pools comes from individual hashers. These hashers could easily switch to new pools at any time. Still, it’s also possible that Bitmain does, in fact, control well over half of all hash power on the network directly.

Bitmain has not disclosed how much hash power it truly controls, but the company does boast a major data center in China. This center is probably large enough to control most of the hash rate already. (Even if Bitmain does not own all of the mining machines in this data center, it has physical access to them, which is sufficient to mount an attack.)

The company’s 32-year-old co-founder and CEO Jihan Wu, did recently unveil plans for a potential initial public offering. Should executives decide to go mainstream, their books would be opened to the public and make them accountable to shareholders, some of whom might take issue with an alleged campaign for network dominance.

For now, while the combined hash rate of Bitmain’s official mining pools is an indication that bitcoin mining has become very centralized, the particular metric of pool centralization can be considered somewhat superficial. Mining pool centralization has been a reality for some time, while the true hash power centralization risk remains unknown.

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Cryptomining Applications Suspended in Quebec

Canada’s Quebec province has announced that it will be suspending all approvals for new digital currency-mining projects so officials can consider deeper restrictions and potential energy price hikes.

Bitcoin and cryptocurrency-mining operations in Canada are largely powered by Hydro Quebec. Representatives of the company are asking that the total amount of energy made available to digital currency miners be limited to 500 megawatts. While this is enough energy to run a “single aluminum smelting plant,” it’s a small portion of the 17,000 megawatts miners in Quebec originally asked for.

The enterprise is also asking for respective price increases on all energy consumed by cryptocurrency miners. This is to guarantee that Hydro Quebec maximizes its annual revenue while being able to maintain present power rates for residents and standard businesses.

In a statement, Hydro Quebec Distribution President Eric Filion explained, “We are asking the province’s energy board to quickly determine how much it should charge digital currency miners, and how much energy should be allocated to the industry while addressing the need to maximize revenues and job creation.”

Since early January, Canada has been a serious hotspot for cryptocurrency mining projects from China, South Korea and neighboring regions looking to take advantage of the country’s low energy prices and stable government. According to spokesman Marc-Antoine Pouliot, many of these miners are rewarded with the energy they need to mine digital currencies in exchange for investing in Hydro Quebec’s transmission network, thus boosting the company’s reputation and position in Canada’s power sector.

But problems are forming on the horizon. Hydro Quebec now says it doesn’t have the energy sources it needs to power every project that comes its way.

“We won’t be able to power all the projects that we’re receiving,” Pouliot explains. “This is evolving very rapidly, so we have to be prudent.”

While turning away potential business is a hard decision, Pouliot says Quebec’s energy ministry needs time to examine the situation and set new roles for the industry before things get out of hand. Minister Pierre Moreau states that the province now aims to establish new guidelines that will bring in the “best among the companies” and push Canada to the head of the cryptomarketing arena.

The decision to halt new approvals arrives just one week after Quebec lifted a moratorium that banned energy companies from supplying electricity to cryptocurrency-mining projects. The ban was first implemented in March, though Canada later expressed concern over “missing the boat” on crypto and decided it would work with mining companies if they could set different energy prices for miners and cut off electricity to their operations once the power grid was stretched to the maximum capacity.

Pouliot stated, “Having interruptible customers during these critical periods makes it possible to connect more. [Hydro Quebec’s mandate] is to ensure the implementation of cryptocurrencies in Quebec by maximizing economic benefits and ensuring the stability of our electricity supply.”

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Bitcoin Miner Aspires to Launch Largest Crypto Mining Facility in the U.S.

Coinmint, a cloud mining service provider, has confirmed it will go ahead with its proposed plan to open a cryptocurrency mining plant in an abandoned smelter previously used by Alcoa, in Massena, New York.

In a statement published online, the company said it will repurpose the 1,300-acre, 435-megawatt site into the biggest cryptocurrency mining plant in the world. The move, which was approved in February, will see the mining service invest up to $700 million and the creation of 150 jobs in the coming months.

The company remains unfazed by the slump in bitcoin prices, which has seen a drop of almost 50 percent this year, according to data from Coinmarketcap.

In correspondence with Bitcoin Magazine, Coinmint CTO Prieur Leary said, “Current bitcoin prices affect the value proposition. That being said, we are very comfortable with current metrics, given our technology and infrastructure.”

Coinmint sees upstate New York as the perfect environment for them to set up shop. Operations have begun at the complex through Coinmint’s wholly owned subsidiary North Country Data Center Corporation, and the facility is expected to be at full capacity within 12 months.

The company believes this move will impact the crypto industry in a positive way. Leary went further by saying that “given the current concentration of digital currency data centers in Asia, launching the largest of such facilit[ies] in the U.S. makes a bold statement that the West is active within the industry and is a driver of growth and innovation within the space.”

New York is not known for being friendly to crypto companies or to miners, but as Steven O’Shaughnessy, Massena’s town supervisor, remarked in a local interview, “Our main marketing point is that we have cheap, reliable power.”

Mining is a power-hungry activity that has been getting a lot of attention lately.

In May, an expert panel met at a mining conference to discuss the implications of high energy consumption among miners worldwide, where they refuted the notion that energy devoted to proof-of-work operations is a wasteful by-product of cryptocurrency mining.

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Zcoin’s Merkle Tree Proof Release Seeks to Bring Back Fairer Mining

Zcoin, a privacy-focused asset, is launching a working version of MTP v1.2 (Merkle Tree Proof) — an ASIC-resistant proof-of-work (PoW) algorithm — on its testnet. Chinese mining conglomerate Bitmain had recently announced the release of an ASIC designed for mining the similar, privacy-based cryptocurrency Zcash, which ultimately led to some concerns in the cryptocurrency space, and Zcoin is looking to offer reassurance.

Founded in September of 2016, Zcoin was constructed to tackle decentralization and privacy issues on the blockchain. It was also the first currency to implement the Zerocoin protocol and provide financial privacy by using zero-knowledge proofs.

Created by Alex Biryukov and Dmitry Khovratovich in June 2016, MTP is designed to target miner centralization caused by ASICs and permit entry to the mining space for CPUs and GPUs. Speaking with Bitcoin Magazine, Zcoin’s Chief Operating Officer Reuben Yap explained how MTP works to demonopolize the cryptocurrency mining space.

“When you have specialized machines, X dollars will get you a hash rate 1000 times stronger than if I spend X dollars on a CPU or GPU, so if I spend $2,000 on a bitcoin ASIC miner, I’ll get a higher performance than if I spent $2,000 on a GPU rig,” he said.

“MTP’s aim is to make the price and performance as close to each other regardless of whether you use an ASIC, GPU or CPU, so no one can gain an unfair advantage through the use of specialized hardware. It is back to the idea of egalitarian mining where Satoshi was expressing one CPU per vote.”

Yap pointed out that ASIC manufacturers like Bitmain are not incentivized to sell miners at more affordable prices. But, by allowing people to use their existing hardware, without requiring something specialized to remain competitive, everyone can be kept “on fair footing as opposed to only the miner manufacturers having control.”

The system was first published in January 2018 and was used to strengthen algorithms against attacks found in both academic peer reviews and Zcoin-funded MTP bounty programs. MTP can handle large memory sizes from two to eight GBs, which pits it favorably against other leading PoW systems like Scrypt, Equihash and Cryptonight.

MTP also discourages the use of botnets — infected computers that are controlled to mine cryptocurrencies — as its high memory usage would likely alert users of infected systems due to heavy impacts on a system’s performance. Botnets have often taken advantage of ASIC-resistant algorithms in the past, though MTP requires considerably more memory for proof computation like mining than it does for proof verification.

Zcoin is now refining its MTP code to prepare the application for extended testing. It will also be launching bounties for open-sourced miners and pool software prior to its release on the main net.

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Bitmain’s Antminer Z9 Mini Designed to Mine Zcash, Threatens ASIC Resistance

Mining hardware manufacturer Bitmain has announced the release of its new Antminer Z9 mini, an ASIC (application-specific integrated circuit) miner capable of mining any cryptocurrency running the Equihash proof-of-work (PoW) algorithm. This includes, most notably, Zcash.

The company made the announcement via its Twitter page:

“Pleased to announce the Antminer Z9 mini, an ASIC miner to mine #Equihash-based cryptocurrencies. To prevent hoarding and to let more individuals worldwide get one, we’ve set a limit of one miner per user. Order … now while stock lasts!”

Zcash (ZEC) is a decentralized and open-source cryptocurrency designed to offer users complete (but optional) privacy in transactions. In addition, Zcash has always used the Equihash PoW mining algorithm to prevent the progress of Zcash ASIC miners and has predominantly been mined by general-purpose GPU chips, which are popular amongst gamers.

ASICs have long been a subject of controversy. Their introduction has led to centralized mining for some larger operations, and many have argued that ASICs work against the decentralized intentions of various cryptocurrencies.

In addition, Bitmain in particular has been accused in the past of leveraging its influence as a dominant player in the mining industry. Critics have claimed that Bitmain does not have a sizable competitor and boasts an unfair advantage when trying to centralize hash power. As such, Zcash mining, too, could wind up in the hands of only a few major mining companies like Bitmain.

The development of ASIC hardware has already caused some cryptocurrencies to change their proof-of-work mining algorithm. Martin Kuvandzhiev, operations lead of Bitcoin Gold, which uses the same mining algorithm as Zcash, has stated that an upcoming hard fork has been scheduled to ensure that the currency manages to stand against ASIC mining. Monero, meanwhile, has recently altered its mining algorithm to counter ASIC hardware.

It is possible that Zcash will follow suit and change its PoW mining algorithm as well, but no decision has been made on this issue as of yet. Just hours before Bitmain’s announcement, Zcash co-founder and CEO Zooko Wilcox did write in a forum post that ASIC resistance “would probably become impossible long-term” but that he was struck by how essential GPU mining was to people in nations like Venezuela.

“If Venezuelans try to import ASIC miners (i.e. for Bitcoin, currently), then they risk having the miners stolen or extorted by the army which controls all imports,” he explained. “I’m basically still in the same place now that I was four years ago when we first decided to go for widespread-distribution-of-coins at the expense of sunk-cost-incentive-alignment. I still think that widespread-distribution-of-coins is more important (but I still think it can’t last forever …).”

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Op Ed: Can Solar Power Drive Bitcoin Mining in Africa?

While many in the West often overlook Africa as an emerging blockchain innovation center, a deeper look across the continent tells a very different story. The Blockchain Africa Conference came to a close last month in Johannesburg, South Africa. Around the same time, the Kenyan government set up a task force to study the impact of the technology. There are plenty of other blockchain communities growing around Africa too, in places like Nigeria, Sudan and Algeria.

Although not without difficulties, the growing connectivity and an advancing computer science field — especially at institutions like Makerere University in Uganda — show the African blockchain ecosystem is evidently building agency.

And it has the potential to make a massive impact on local economies and communities alike. During a speech, the United Nations Economic Commission for Africa, Managing Director of the IMF Christine Lagarde noted, “So [blockchain] is not just about saving money, it is also about creating more transparency, promoting stronger accountability, and in the end, delivering a better life for every citizen.”

For many, cryptocurrency mining is providing a big leap forward. Communities have sprouted up across the region. But with global bitcoin mining using more power than most African countries (only South Africa, Egypt and Algeria consume more), it’s hard to see how it’s going to be sustainable on the continent. On the flipside, solar power just might have the force to push bitcoin mining in Africa to the next level. Here’s how.

A Snapshot of the Bitcoin Mining Community in Africa

Bitcoin mining farms have begun popping up around the world to mine bitcoin in bulk. But while Egypt’s hot climate seems like an unfavorable place to do so, a community has developed to mine bitcoin in secret.

According to the Bitcoin Africa article linked above, many miners keep a low profile for fear of being charged for working with black market foreign currencies. Still, bitcoin mining farms are spreading across Cairo. One of the main reasons for the boom is that electricity is cheaper compared to other economies. With lower overheads paid out in the local currency, miners get more back in bitcoin.

Bitcoin mines are spread throughout other countries, too. IT Software company Ghana Dot Com (GDC) opened what it claims to be the country’s first bitcoin mine back in 2016, for example. (GDC is a descendant company of Network Computer Systems, which introduced internet in Ghana in 1993.) In South Africa, bitcoin mining hardware store Bitmart just opened in 2018. There’s also active communities in Nigeria, Gambia, Uganda, Ethiopia and Kenya.

One Nairobi-based miner, Eugene Mutai, has received a fair share of press for the mining facility in his apartment. He told Bloomberg that, in the global market, bitcoin mining has leveled the playing field for him. Without a college degree, he’s been able to move into the Kenyan middle class.

Solar as a Viable Mining Alternative

Certainly, parts of Africa aren’t exactly the ideal place to be mining bitcoin due to the hot climate  — the average temperature in Ethiopia, for example, is 93 °F year round. Even more significantly, about 600 million people living in Sub-Saharan Africa don’t have access to electricity. And, while nearly 1 billion people in the region might gain access to electricity by 2040, an estimated 530 million people will still not have electricity access due to population growth.

Each country in Africa has its own nuanced problems and solutions; however, in a good handful of African countries, solar power is emerging as a viable option for combatting these electricity woes  — and there are already several solar projects on the go.

In Morocco, for example, there’s the 800MW Noor Midelt solar complex. According to Reuters, the estimated $2.4 billion (€2 billion) project has been supported by the African Development Bank, the World Bank, the European Union and the European Investment Bank, among other institutions. In addition, Seychelles just announced they’re planning to install Africa’s first floating solar project, which is expected to contribute 5.8 GWh annually to the country. There are also giant solar farms in South Africa, Uganda, Kenya, Morocco and Burkina Faso. Many produce so much energy, in fact, they hope to one day export solar energy to Europe.

This investment in energy infrastructure could eventually help make bitcoin mining in Africa a more sustainable endeavor which, if implemented on a large scale, might actually help push Africa’s industry forward.

In an article on Greentech Media, author Tam Hunt writes: “It can make good financial sense to use solar power to mine bitcoin. Solar plants can provide power that is cheaper than grid power in areas with good insulation and low construction costs. The price of power is also known with some certainty over time because there are no fuel costs and thus no volatility.”

Not only can mining with solar energy drive the bitcoin industry in many African countries forward, but it will give greater parts of the population across the continent access to the global market. Instead of being held back by highly inflated currency or local tenders impacted by government turbulence, bitcoin mining is enabling many Africans to get ahead. And if solar power is brought into the mix, it can prove to be a truly sustainable leap forward for economies and individuals alike. After all, in parts of Africa there is a huge necessity for it. The power requirements to mine bitcoin are globally unsustainable. And since access to electricity in Africa is already problematic, solar power could be the answer.

This is a guest post by Nabyl Charania, Chairman and Chief Executive Officer of Rokk3r. Views expressed are his own and do not necessarily reflect those of BTC Media or Bitcoin Magazine.

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UNICEF’s “Hope Page” Mines Cryptocurrency Through Visitors’ Computers

UNICEF Australia is using Coinhive — a crypto-mining service — to extract cryptocurrency through visitors’ computers and fund its ongoing mission in Bangladesh. The UN branch has long worked to provide humanitarian relief for both children and their mothers in developing nations. The organization has now created what representatives call the “Hope Page,” which allows users to donate through cryptocurrency.

UNICEF’s Director of Fundraising and Communications Jennifer Tierney explained, “We wanted to leverage new emerging technologies to raise awareness about current humanitarian crises and raise new funds to support children caught up in them. The Hope Page allows Australians to provide help and hope to vulnerable children by simply opening the page when they are online.”

Coinhive’s partnership with UNICEF could help to foster a more positive image for the software. Up until this point, Coinhive has widely been associated with a process known as “cryptojacking,” in which the computer processing power of individuals visiting certain sites is used to mine Monero without their knowledge or permission. In the past, Coinhive has targeted everything from government websites to even Google and YouTube users. As a result, Coinhive has been listed amongst the largest threats to web security.

In this case, UNICEF is using the software’s opt-in method to ensure visitors are aware of the organization’s intentions. While searching the Hope Page, web browsers use computer processors to solve cryptocurrency algorithms. Those examining the site can choose how much power (typically between 20 and 80 percent) they wish to donate to the task.

The website explains that the mining process is completely safe and offers the following instructional message:

“The longer you stay on the page and the more processor power you donate, the more algorithms get solved, which earns cryptocurrency … If you’re ever worried about power consumption, simply turn down the amount of processing power you’re donating. The cryptocurrency is automatically donated to UNICEF Australia and is turned into real funds that reach children through life-saving supplies like safe water, therapeutic food and vaccines. Turn the Hope Page into your homepage to give every day.”

Mining efforts will be used to fund the current Rohingya crisis. Several children and families that have fled their homes in Myanmar to escape military-led violence are now living in refugee camps in the neighboring country of Bangladesh and require certain necessities while they await placement.

Though part of the United Nations Children’s Fund, UNICEF is not actually funded by UN efforts. Instead, it garners financial assistance through voluntary donations.

Visitors of the Hope Page are told that cryptocurrency mining isn’t free and may lead to further costs down the line. High amounts of electricity are used during the mining process, which may lead to higher energy bills for any donating individuals. In addition, the process is not tax deductible, and visitors are advised to consider cash or credit card donations prior to giving their mining consent.

This is not the first time UNICEF has used cryptocurrency to fund its global labors. In February, the organization launched Chaingers.io to raise funds for children of the Syrian civil war. At the time, the site was using the cryptocurrency mining software Claymore to extract ether through visitors’ computers.

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Space Law Workshop exposes rift in legal community over national authority to sanction space mining

Tanja Masson-Zwaan, assistant professor and deputy director of the International Institute of Air and Space Law at Leiden University, is in the foreground with Lesley Jane Smith, professor of International Economic and European Law, Leuphana University Lüneburg, and George Sowers, Colorado School of Mines professor, discussed space resource mining at the 34th Space Symposium.

COLORADO SPRINGS — International space experts conducted a spirited debate April 16 on whether national or international laws should govern space mining at the Space Law Workshop at the 34th Space Symposium here.

“The problem is there is currently not legal certainty about what is allowed and what is not allowed,” said Tanja Masson-Zwaan, former president of the International Institute of Space Law (IISL). “In the Outer Space Treaty, the question of whether you can own extracted resources is not clearly answered.”

The United States and Luxembourg have passed laws giving companies the rights to space resources they extract. Companies are relying on that legal authority to attract investment for their plans to mine the Moon and asteroids.

“If I’m a U.S. company, the only law I am obligated to follow is U.S. law,” said George Sowers, Colorado School of Mines professor and former United Launch Alliance vice president and chief scientist.

Not all international space experts agree, however, that individual nations have the authority to grant companies permission to extract resources in orbit.  

Stephan Hobe, co-director of the Institute of Space Law at Germany’s University of Cologne, said that under 1967 Outer Space Treaty, “outer space and all non-man-made objects it entails are subject to international regulation, I repeat international regulation, not national regulation.”

Hobe said he is not opposed to space mining but believes that before commercial mining activities begin, international representatives should conduct negotiations and establish rules.

As an example of the path to follow, Hobe pointed to the Agreement Governing the Activities of States on the Moon and Other Celestial Bodies, better known as Moon Agreement, which was adopted by the United Nations General Assembly in 1979 and ratified by 18 nations, but no states conducting human exploration missions.

The Moon Agreement, among other things, affirms that lunar resources are “the common heritage of mankind and that an international regime should be established to govern” their exploitation.  

“My dream is that countries like the U.S., like Russia and other countries would be sitting together at the table in Vienna to draft such a regime” related to space resources,” Hobe said.

Because commercial firms are eager to extract space resources as soon as possible, several international panels have begun focusing on the topic, including the United Nations Committee on the Peaceful Uses of Outer Space (COPUOS) and IISL. IISL conducted a 2017 study on space mining, led by Hobe.

Now, the Hague Space Resources Governance Working Group, led by the Netherland’s Leiden University is seeking to promote dialogue through a document it published in September, “Draft Building Blocks for the Development of an International Framework on Space Resource Activities.”

The Working Group “is also of the opinion that some kind of international governance would be the ideal solution,” said Masson-Zwaan, assistant professor and deputy director of the International Institute of Air and Space Law at Leiden University. “The point is I don’t think we can wait because the companies are knocking on the door. That is the reason national laws came into being. And that led COPUOS to make it an agenda item.”

SN

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Samsung Is Building ASIC Chips for Halong Mining

Samsung Is Building ASIC Chips for Halong Mining

Seoul-based multinational conglomerate Samsung has confirmed that it is providing ASIC chips to mine bitcoin, ether and assorted cryptocurrencies for hardware manufacturer Halong Mining.

Prior to entering the mining space, Samsung was producing “high-capacity memory chips” for GPUs, which are predominantly used to handle computer graphics but also possess mining capabilities. Its partnership with Halong is expected to bring heavy competition to the ASIC industry, primarily to China’s Bitmain, which, up to this point, has largely dominated the chip-development arena. Both companies work with Taiwanese giant TSMC, which has seen quarterly revenue increases of $350 to $400 million, thanks to ongoing developments in cryptocurrency.

Reports regarding the association between the companies date as far back as January 2018, when it was suggested that Samsung was working with an “unnamed” Chinese mining company. Rumors became a reality on April 10 when online mining rig retailer MyRig posted a picture on its Twitter page of a thin slice of semiconductor material known as a “wafer.” The company wrote that the item was being used in the “fabrication of integrated circuits” and that it had been produced by electronics giant Samsung.

Halong Mining has remained relatively quiet regarding its new relationship, though its first miner, the Dragonmint T1, is now available for purchase. The item is believed to stand among the world’s most efficient miners, purportedly beating out Antminer S9 by Bitmain in terms of performance.

Slush Pool also confirmed last March that someone in its mining network had mined coins using Halong software and that its overall efficiency could be attributed to an upgrade known as “AsicBoost,” which was developed in 2016 by former CoinTerra CTO Timo Hanke.

The technology works by exploiting a portion of Bitcoin’s proof-of-work algorithm by allowing miners to take “shortcuts” to find new blocks. This technology is equally available to multiple mining companies thanks to Halong’s membership with the Blockchain Defensive Patent License (BDPL), which is designed to keep competition levels in the cryptocurrency mining space fair and accurate, but so far, only Halong Mining is known to be using the overt variant of AsicBoost.

The DragonMint T1 was produced by BtcDrak, who’s been involved with Halong Mining since it began. The developer also maintains bitcoincore.org and the Bitcoin Core Community Slack.

“We started a mining project with the aim to bring much needed competition to the market,” he states. “We want to ‘make SHA256 great again.’”

BtcDrak also says that the DragonMint T1 is the most “advanced miner to date,” claiming it is about “30 percent more energy efficient” than the AntMiner S9 and that it could produce a total of “16 tera hashes per second.”

Samsung also worked with Hangzhou-based company Ebang last year to develop DW1228 chips for its new bitcoin mining machines the Ebit E9++ and the E10. The chips were slated to boost an E10 hash rate to 18TH/S. The machines were first released in early February and units sold out almost immediately.

This article originally appeared on Bitcoin Magazine.

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NVIDIA CEO: “Cryptocurrency Is Here to Stay”

Speaking with Mad Money host Jim Cramer, NVIDIA CEO Jensen Huang recently claimed that “cryptocurrency is here to stay,” and he “doesn’t see the craze ending anytime soon.”

Though it first came to fruition in 2008, bitcoin gained a solid taste of mainstream popularity in 2017 when its price began rising faster than anyone had anticipated. The year started with a single bitcoin trading at nearly $1,000, though things ended on a higher note when the currency nearly grazed the $20,000 mark.

Since January 2018, bitcoin and other virtual currencies have experienced serious drops in their prices, but Huang is convinced that cryptocurrency remains as popular as ever.

“Cryptocurrency will be here,” he stated in the interview while discussing the future of finance. “The ability for the world to have a very low-friction, low-cost way of exchanging value is going to be here for a long time.”

NVIDIA is a technology company based in Santa Clara, California. Some of the enterprises’ staple products are its graphics processing units or GPUs. These small processors, Huang explains, were some of the main reasons the company first decided to get involved in cryptocurrency last year.

The GPUs have a powerful ability to mine virtual currencies, and blockchain technology requires computers that can be distributed “all over the world” while remaining immutable and safe. Thus, Huang felt his company’s products could be greatly beneficial to cryptocurrency miners:

“The reason why cryptocurrency became such a popular thing on top of our GPUs is our GPU system is the world’s largest installed base of distributed supercomputing. Our processor serves as the perfect processor to enable this supercomputing capability to be distributed, and that’s the reason why it’s used.”

Interestingly, Huang noted that while the chips were no doubt powerful and crucial to the mining industry, he and his fellow executives are “not ready to move” on this just yet. For the time being, NVIDIA is primarily involved in the gaming business, data centers and self-driving cars, and cryptocurrency and mining operations account for only small portions of the company’s profits.

In fact, NVIDIA currently has no alleged involvement in Bitcoin, per Huang’s comments at a recent GPU technology conference. He said its processors are predominantly used to mine ether, which accounted for roughly 6 percent of the company’s GPU sales in 2017.

“Ethereum ‘ether’ was designed as an algorithm to ensure no singular entity (or a few entities) has the power to control the ether,” he said. “It was designed so that the algorithm requires the type of computing capabilities — the type of processing capabilities — that are made possible by GPUs in a distributed system. The GPU is popular with Ethereum because the GPU is the single largest distributed supercomputer in the world. It is the only supercomputer that is literally in everyone’s hands, and no single entity can control the currency.”

He says that the influence of cryptocurrency isn’t likely to affect how they do business in the present, though he’s very confident this could change in the future:

“Gaming is a much bigger business; data center is a much bigger business; our professional graphics is a much bigger business, and, of course, in the future, everything that moves will be autonomous, and we’ll have autonomous capabilities, and that’s going to be a much bigger market, but cryptocurrency gave it that extra bit of juice that caused all of our GPUs to be in such great demand.”

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Intel Releases Patent for New Cryptocurrency Mining Accelerator

Intel, one of the world’s largest semiconductor companies, has filed a patent for a new Bitcoin mining chip accelerator. Entitled “Bitcoin Mining Hardware Accelerator with Optimized Message Digest and Message Scheduler Datapath,” the patent was originally submitted in September of 2016, but is now being released for the first time.

Bitcoin and cryptocurrency mining has long been under scrutiny for the excessive energy it allegedly uses. Countries like Iceland, for example, admit that more energy is used to mine Bitcoin than to power its residences, while cities like Plattsburgh, New York — a once-popular haven for commercial Bitcoin mining — have imposed strict moratoriums to lessen miners’ growing needs and the surging costs of electricity.

Intel claims to have found a more reasonable and cost-effective way to mine bitcoins. The patent says the product can decrease energy use by up to 35 percent while lowering financial requirements and mining more bitcoins in the process.

The document reads:

Because the software and hardware utilized in Bitcoin mining uses brute force to repeatedly and endlessly perform SHA-256 functions, the process of Bitcoin mining can be very power-intensive and utilize large amounts of hardware space. The embodiments described herein optimize Bitcoin mining operations by reducing the space utilized and power consumed by Bitcoin mining hardware.

Intel explains that one of the most expensive and rigorous steps involved in any mining venture is finding the 32-bit field. The value is set so that the block hash contains a nonce, or a solid set of zeros. After computation is complete, these zeros are attached to the “hash of the transaction hashes in the blockchain” and other headers.  

The traditional 256-bit hash that the document discusses is less than a “pre-defined threshold value.” There are two primary computational blocks involved: a message scheduler and a message digest. Both blocks work together to combine several 32-bit words and 32-bit additions, which can thus bring energy use down.

Several problems exist, however, within the present mining community. Energy costs in most of the United States are increasing, while other nations like China — prime locations for mining operations due to their low-priced energy supplies — have sought to slow cryptocurrency innovation by “clamping down” on Bitcoin miners or limiting available energy.

Perhaps the largest problem stems from bitcoin’s current price. At press time, one bitcoin is trading for roughly $6,600 — a massive drop from the $8,000+ mark seen earlier this week. Figures like Fundstrat’s Thomas Lee now say that Bitcoin mining is no longer profitable, with most miners either breaking even or falling short between what they earn and what they’ve spent to extract coins.

Randy Copeland, an Intel partner and the president of Velocity Micro, says that Intel’s new accelerator could change things for the better. Speaking with CRN, Copeland explains, “Once this new Intel technology comes to market, more people will mine again because it’s profitable again, driving down the market value of the coins and finding a new market balance that will again put locations with lower electricity costs back at the advantage.”

This is not Intel’s first attempt to enter the cryptocurrency arena. Last May, the company partnered with healthcare transaction service provider PokitDok to help bring blockchain technology to the healthcare industry. Executives also joined hands with Chinese media and tech firm Tencent in September to collaborate on a new blockchain solution.

Later in October, Intel partnered with hardware wallet developer Ledger to store digital currency on the company’s platform.

Intel’s actions could prove to be significant. Patents among some Bitcoin companies have been deemed “unethical,” as the original Bitcoin software is available freely as open-source software. In addition, patents for Bitcoin mining products present concerns regarding the decentralized nature and competitiveness of the industry. If one company is able to use significantly less resources and thereby operate more efficiently, that venture may wind up the single or dominant party, while the rest make a permanent exit — a situation that could result in reduced decentralization and security.

The recent Blockchain Defensive Patent License (BDPL) is seeking to provide a more open arena for Bitcoin miners. Should a Bitcoin- or blockchain-based company enter the agreement, they must share all their patents with “other license holders” as long as those holders are also members. The BDPL imposes strict regulations that deny blockchain companies specific rights to certain patents or products, and penalizes “licensees who attack the patents licensed” to other members.

It will certainly be interesting to see if Intel, with its latest technology, decides to follow in the spirit of other Bitcoin mining companies and become the BDPL’s newest affiliate.

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Bitfury Expands to Norway With $35 Million Bitcoin Data Center

Bitcoin mining giant and blockchain tech provider Bitfury is branching out to Norway. After meeting with government officials and partnering with local business leaders, the company is opening the doors of its new energy-efficient, data-mining center, in which executives have already invested $35 million.

The center is stationed in the Mo Industrial Park in the town of Mo i Rana and is expected to create roughly 30 new jobs for local workers.

CEO Valery Vavilov explained that the country’s innovative spirit and “favorable tax code” made Norway a top pick for Bitfury’s future expansion:

Norway is a perfect match for Bitfury’s focus on innovation and growth. We look forward to identifying new customer relationships and designing the products and solutions they need to make their enterprises run more securely and efficiently.

Bitcoin and cryptocurrency mining have long been criticized for allegedly requiring large amounts of power. Cities like Plattsburgh, New York — once popular among bitcoin miners for the low-cost electricity they provide — have already enforced temporary bans or “moratoriums” due to the growing difficulties of satisfying miners’ needs.

With energy consumption being a major concern, Bitfury mentioned that the data center boasts a power usage effectiveness (PUE) level of 1.05 or lower, and thus stands as one of the “world’s most energy-efficient” operations. Recently, Bitfury purchased approximately 350 gigawatts of power from local renewable energy provider Helgeland Kraft.

The company further explained that it ensured renewability in all its energy sources, as it had acquired “Guarantee of Origin” certificates from its nearby suppliers. Guarantee of Origin is a product of European legislation designed to “document and report” all energy claiming to come from renewable sources. The process works to educate customers about where their energy originates, thus potentially reducing harmful greenhouse gas emissions and improving overall sustainability.

Norway’s Minister of Trade and Industry Torbjørn Røe Isaksen said:

“I am very delighted that the Bitfury Group has chosen to establish their new data center in Norway and Mo i Rana. Data will become an increasingly important resource for the business community, as well as for society in general. This represents a major economic opportunity for Norwegian businesses. The data center industry is growing fast and provides Norway with opportunities of economic growth and new jobs.”

Bitfury also has offices in the United States, the United Kingdom, South Korea, Hong Kong, Ukraine and Japan. In early March 2018, Bitfury opened its seventh office in Russia, which it said would focus on selling its two primary products. The first is “Exonum” and is described as an “open source enterprise-grade blockchain framework” created to allow both businesses and individuals alike to build blockchain networks that solve “administrative” issues.

The second product, simply known as “Crystal,” was released in early January 2018 and is a tool designed to assist law enforcement officials in financial investigations.

Its webpage states: “Crystal provides a comprehensive view of the public blockchain ecosystem, and uses advanced analytics and data scraping to map suspicious transactions and related entities.”

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Eco-Friendly Bitcoin Mining Can Reduce Carbon Footprints (Yes, Really)

With each passing day, it seems as though the conversation on Bitcoin’s energy consumption rages on, though new ground is rarely broken on the topic. Like bears to honey, media outlets flock to FUD stories on mining’s electrical costs and doomsday predictions of a world driven to the ecological brink, thanks to bitcoin mining.

There is a strong argument to be made, however, that far from plunging the globe into ecological disaster, cryptocurrency mining can be sustainable or, better yet, can be used to neutralize the carbon footprint of other energy intensive processes. Indeed, under the right circumstances, mining can produce a minimal carbon output. Moreover, its energy emissions can be recycled for other eco-friendly endeavors.

Bitcoin’s Mining Energy Costs

Bitcoin uses a consensus algorithm known as proof of work to order and timestamp transactions on its blockchain. Basically, miners — those who process transactions — run energy intensive computations on their computers to solve the cryptographic equations that are needed to find new blocks and keep the network secure. As the network attracts more value and miners try to outcompete each other to find the next block, they will invest more energy in solving these equations.

Depending on who you’re asking, this process has Bitcoin consuming more energy than a small country (e.g., Bulgaria, North Korea), which could be anywhere from 1 to 35 terawatt-hours per year. Some have argued that innovations like the Lightning Network will scale this problem out of existence, while other critics claim that a proof-of-stake, distributed consensus mechanism could prove to be more ecologically sound.

Within this debate, there are those who say this process is unsustainable and needs be fixed. Then there are others who argue that the concern is overblown and nothing needs to change.

Andreas Antonopoulos, for example, points out that bitcoin mining can be used to consume the excess energy produced by power plants “that would be otherwise wasted.” The mining proceeds, then, can serve as “an alternative store of value,” making it “an environmental subsidy to alternative energy all around the world because it’s causing [renewable energy projects] to be amortized over a year instead of five.”

Renewable Energy Solutions

Hydroelectric power has earned its own place at the crypto conservationist’s table. Chinese mining farms have long drawn cheap surplus energy from hydroelectric dams, especially in the Sichuan province. One of the oldest of these, BW, for instance, helped to pioneer the practice. Founded in 2014, the mining operation has drawn renewable energy to power its rigs since 2015.

Though its roots are in China, hydroelectric mining has found its way into other regions that offer cheap river-run energy. In Austria, the Damblon sisters at HydroMiner have looked to harness the output of hydroelectric dams in the alps for their own operation. Nadine and Nicole Damblon founded the HydroMiner Limited Company in 2016 alongside a posse of Viennese miners. By 2017, the team established its first facility in Schönberg, Austria, which draws a base energy output of 290 kWh for its 120 mining units. Their second mining farm in Waidhofen an der Ybbs, Austria, receives a consistent supply of 600 kWh for its 250 Antmine 29s and 1152 GPUs.

The team built this second farm thanks to funds from its H2o token ICO. Each H2o token guarantees 5 kWh worth of mining time, which holders can redeem for any cryptocurrency the facilities mine using the project’s mining portal. As the operation expands, the team plans to launch the H3o token, which will pay holders dividends much like a security and is, according to its creators, “the first fully compliant security token according to European financial law.”

With the ICO proceeds, HydroMining will look to establish a facility outside of Austria, either in Canada, Georgia or some other country with low-cost, clean energy. According to the Damblons, hydroelectric energy in Austria is 85 percent cheaper than average electricity costs. They can pump energy into their mining rigs for 3-5 cents per kWh, and the Austrian climate is ideal for keeping their hardware cool. When overheating is a problem, they can reroute water from the rivers to keep their system’s from running a fever.

Speaking of heating up, the warmth mining rigs produce is ideal for heating a home, especially in colder climates. In the tiny Siberian town of Irkutsk, Russia, Ilya Frolov and Dmitry Tolmachyov are using the heat emitted by their mining rigs to keep their micro home warm. The system heats up a water source connected to the mining hardware, and once warmed, the water is piped to a space heater to keep their abode nice and toasty. Using locally sourced energy from a nearby hydroelectric power plant, the men can warm their home without having to draw any additional energy for heating, and they even get to pocket an additional $430 per month after covering mining costs.

One company has taken this concept and run with it. The Qarnot QC-1 streamlines Frolov and Tolmachyov’s design by combining the miner and heating unit into one; it looks like a space heater, runs like a space heater and feels like a space heater, but it’s actually two GPUs with a default to mine Ethereum.

There are even more creative and unconventional innovations still: just take a look at the Myera Group, a Canadian sustainability solutions company. At the tailend of 2017, company president Bruce Hardy began using the heat from bitcoin mining to run a sustainable greenhouse and fish farm in Manitoba, Canada. The heat from the miners warms the greenhouse plants, while nitrate-rich wastewater from the fish tanks keeps them watered.

In the same vein, NakamotoX, a Czech cryptocurrency exchange, is also using mining heat to grow tomatoes with help from “100% bio-waste produced energy,” according to Kamil Brejcha, the exchange’s founder.

In yet another example, NastyMining is an Arizona-based, bitcoin mining organization that harnesses solar and wind energy to run its mining rigs. Since 2012, NastyMining has worked to find a middle way for Bitcoin’s energy issues, encouraging “socially responsible” mining from the 30,000 miners contributing to its pool. Since 2017, NastyMining has ramped up its commitment to these sustainable mining practices, utilizing a wind turbine donated by YoBit exchange and a generous donation of solar panels from SunPower solar company to run the ASIC rigs in its facility.

The team at NastyMining is part of a wave of miners who have looked to harness natural forces to negate their carbon footprint, and there are more resources than just wind and solar at these innovators’ disposal.

Thus, there are innovators who see mining’s weakness as its strength, and they are exploiting the problem as the source of its own solution. These examples are not exhaustive and offer just a sampling of the myriad ways entrepreneurs are challenging the limits of crypto’s mining potential. As more solutions come out of the woodwork, these innovations paint a different picture of what mining can do and what ecological impact it may have on green initiatives going forward.

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Bitmain Explores More Sites for Bitcoin Mining Expansion

Having already expanded its China-based ASIC chip manufacturing into Switzerland and Canada, Bitmain is looking to add a facility to the Pacific Northwest region of the United States.

According to companies-numbers.com, the co-founder of Bitmain, Jihan Wu, is the sole governing person behind Ant Creek LLC, a company in the Port of Walla Walla, Washington, that was registered in June 2017.

In a news article published on March 8, 2018, by the Walla Walla Union-Bulletin, the city is considering a land-use agreement with Ant Creek that would allow the company to lease land starting in 2019 with an option to purchase up to 40 acres.

The report further indicates that the use would be to develop and operate a cryptocurrency mining facility. “Port Executive Director Patrick Reay said his agency has been working with Ant Creek LLC for about six months on the development of a blockchain facility.”

“Our purpose is to generate assessed value and create jobs,” Reay stated. The Ant Creek proposal looks to bring up to 20 jobs and $10 million in private investment to the city.

Some areas are concerned about the power consumption of crypto mining, such as Plattsburgh, New York, where they are considering banning mining, while other areas such as Quebec, Canada, are welcoming it.

Reay said the Port of Walla Walla doesn’t share Plattsburgh’s concern over electricity. “The Port of Walla Walla, as a municipal entity, is not in the electrical business, as we do not sell electrical service,” he told Bitcoin Magazine. “We have two electrical providers in Walla Walla County, Columbia REA and Pacific Power.”

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Mining Application Express Data Dictionary Views: Find Unconditional Processes

I ran into a problem yesterday on the Oracle Dev Gym (offering quizzes, workouts, and classes on Oracle technologies). A number of rows of data were incorrectly deleted. I was able to use Flashback Query to restore them (thank you, thank you, Flashback Query!). Crisis averted.

But how did this come about?

I recruited Chris Saxon to help me figure out how this could have happened. In relatively short order, we narrowed down the culprit to a process in the Dev Gym Application Express definition that was unconditionally “removing previews” — but was, in fact, removing all rows, “previews” or not. Ugh.

So, we fixed that.

But it got me wondering and worrying: what other processes in my app are unconditional? And should they be?

While some processes fire unconditionally on a page (for example, to get the data from tables and display them on the screen), many are (or should be!) restricted to a button press, the result of a conditional expression, or an authorization scheme.

And for sure, if any of these have the word “remove” in them, I want to review them carefully to make sure I am not causing more and future angst.

So, how can I find all the unconditional processes in my application? Sure, I could do some research. Or I could be lazy and ask my friends on Twitter. So I did, and Dimitri Gielis responded almost immediately:

I don’t always like Twitter, but when I do, it’s because of how it’s become a great way to get questions answered quickly.

Now, as you probably know from personal experience, the first idea/solution someone has doesn’t necessarily make it all the way to the end. That was the case here. From my perspective, a process is unconditional if it has no:

  • Server-side condition, whether PL/SQL code or client-side JavaScript (as in, “Item = Value’).
  • “When Button Pressed” set.
  • Authorization scheme.

So in the end, my query became:

SELECT page_id, process_name FROM apex_application_page_proc WHERE COALESCE (condition_type, when_button_pressed, authorization_scheme) IS NULL
ORDER BY page_id

Hopefully, you can find that useful, as well. But what I wanted to focus on in this post is: how did I know the names of columns to reference in the query?

You could try to find descriptions in the doc, but an even better way to get your answer is from within APEX Application Builder itself.

Click on Workspace Utilities:

Then Application Express Views:

Then use the handy interactive report to find your view:

Then either build and save a report right inside Application Builder or find the columns of interest and roll your own, as I did:

I am certainly a rank amateur when it comes to knowing about and leveraging the APEX views. Making them accessible inside Application Builder itself, and leverage APEX features to make it easier to query those views, is a brilliant move. Just brilliant.

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Energy Company Hydro-Quebec Looks to Attract Bitcoin Miners

Hydro-Quebéc (HQ) is a public utility that manages the generation, transmission and distribution of electricity in Quebec, Canada, but it finds itself in a position of generating more power than its customers need.

In an article from Le Journal de Québec, Éric Martel, president and CEO of HQ, relates how HQ is facing a death spiral for electricity consumption. Power consumption by customers in the province has been stagnating since 2007, as customers are adding more and more solar panels. At the same time, HQ has been building more dams and transformers and running more lines. As HQ builds more capacity and prices rise, its customers are turning to self-serving renewables, which reduce their dependence on HQ even further.

HQ already provides electricity at extremely low rates compared to companies like Southern California Edison (SCE), for example, where prices have recently been announced as a fixed rate of $0.0319 ($0.0394 CAD) per kWh for crypto miners, compared to its general, tiered rates of $0.17 to $0.35.  

As Quebecers consume less electricity, Martel is looking to find more creative ways to attract high-energy users, like Facebook, Amazon and Microsoft. HQ is currently selling 450 MWh to computer server companies. In four years the goal is to sell 6 TWh in general and another 5 TWh for crypto mining, the equivalent of nearly two million American homes.

Francis Pouliot of the Satoshi Portal in Montreal tweeted that HQ is looking to attract enough Bitcoin miners to consume 5,000 MWh of electricity, the equivalent of four million Bitmain S9 mining servers. Between the cheap electricity and cool climate that would make temperature maintenance even less expensive, it is looking like an attractive option, but it does raise some questions.

HQ cannot simply add mining to their own business model because there are specific legal mandates that prescribe what they are allowed to do as an entity. And what about taxes? Canada has a relatively high tax rate for individuals, from 15 to 35 percent. Its corporate tax rate was comparable to the U.S. before the recently enacted U.S. tax reforms, ranging from 28 to 33 percent, thus making it important to look at the entire financial picture if considering a move to Quebec for power.

“Bitcoin mining is a crucial component of the objective of power usage in Quebec,” Pouliot told Bitcoin Magazine. “I see Quebec as the El Dorado of this new gold rush, and many people at top levels are excited about being at the forefront of this new usage of our resources. I envision a massive transfer of hash rate to Canada, and the campaigns already taking place to lure companies are seeing a lot of excitement.”

He said that there are already initiatives in the works for strategic partnerships with farmers to make use of waste heat generated by mining to heat their greenhouses. These partnerships may see results as early as next winter.

“Montreal is going to become a hub for experimentation in the recycling of waste heat,” he added.

Canada has already become an attractive option for some companies, as seen by the recent announcement from Hut8 and Bitfury. This could also be a solution for many companies in China that the government seems to be pushing to shut down. HQ appears to be making some forward-looking steps to address this very unusual problem.

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Halong Mining and MyRig Announce Partnership

Halong Mining and MyRig are working together to bring the new DragonMint miner from Halong to market.

First announced in November 2017, the new Halong Mining DragonMint 16T miner is the result of 12 months of R&D and a $30 million investment in development. It has a hashrate of 16th/s with a power consumption of 1440–1480 watts optimized for 240v operation. The DM8575 ASIC runs at 85 GH per chip with a power efficiency of 0.075 J/GH. No special modifications are needed in a data center to use the DragonMint if it is already configured to support a typical Chinese-manufactured ASIC miner.

MyRig (formerly BitmainWarranty) has been providing hosting and retail sales of miners and accessories, PCB design and manufacturing, software engineering and factory approved warranty and repair services since 2013. The partnership with Halong means that MyRig will take care of retail-side distribution, support and warranty services for the DragonMint 16T.

Halong will be manufacturing the DragonMint and continue to sell direct, albeit with a five-unit minimum. Halong told Bitcoin Magazine that the five-unit minimum per order on their site will remain when ordering direct from Halong, but when ordering from MyRig, customers will be able to order single units. They indicated that lead time for shipping at the moment is April 15–30, 2018, and they expect the first batch to go out in March 2018.

According to a MyRig representative, they will ship to any country that either UPS or DHL can deliver to, provided it is not on a sanctions list.

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Canadian TSX Venture Exchange Approves Crypto-Mining Company HashChain to Launch Monday

On December 18, 2017, HashChain Technology, a cryptocurrency mining company, went public for the first time on the TSX Venture Exchange under the ticker symbol KASH, joining at least eight other crypto-related startups including HIVE Blockchain Technologies (Genesis Mining).

At least 50 more blockchain and cryptocurrencies firms are preparing to list on the TSX in the coming year, including Hut 8 Mining Corp., according to Harris Fricker, CEO of GMP Capital Inc., noting that the TSX Venture Exchange tends to be less risk-averse than many other stock exchanges around the world.

In the past, the TSX Venture Exchange has been mainly for smaller companies trading oil and gas, traditional mining and, recently, medical marijuana futures according to Fricker. He says that “at least eight cryptocurrency-related stocks are now trading in Canada.”

HashChain stock started trading today at $2.20 CDN a share. The company has already raised $4.4 million with 41,179,000 common shares both issued and outstanding, in preparation for today’s launch on the TSX.

HashChain says it will initially mine the altcoin Dash but will go on to mine bitcoin in January 2018. After that they say they will “be supporting highly scalable and flexible operations across all major cryptocurrencies.”

The company is counting on their Canadian location to give them an edge:

“Our ideal location for mining will maximize revenue on each coin, and our proprietary approach to operations can sustain rapid growth and scalability.”

HashChain CEO Patrick Gray told Bitcoin Magazine in an interview that although their office is in New York, mining operations will be run out of Vancouver, Canada.

“We have our mining operation in Vancouver because it’s the optimal location to reduce the costs of large-scale mining. Canada has cheap internet, low energy costs and a cold climate that greatly reduces the cost of cooling mining equipment,” noted Gray.

“We monitor these operations 24/7 from New York with a web interface that ensures IP, temperature, hashrate, wattage, fans and memory are all operating at maximum efficiency. This allows us to minimize expenses for each coin mined.”

HashCoin Hopes to Benefit from Canadian Energy Efficiency

As a start, HashChain is mining on the Ethereum blockchain using high-performance ASIC 100 Dash mining rigs. It has also purchased 770 ASIC bitcoin rigs.

“One of HashChain’s core advantages is that our operations are in Canada, which is one of a few places globally that offers the most energy-efficient mining conditions,” said Gray.

“On top of that, there is likely to be new rigs on the market in the near future that reduce the amount of energy required to mine at high hashrates, similar to how the market largely moved from GPUs to ASICs for this reason. From a general standpoint, as the country begins to move towards renewable energy, this could lessen the environmental impact as well.”

HashChain hopes to set up more mining locations in cool climates, with low-cost energy and reliable high-speed internet, what the company calls the “trifecta” most critical to mining success.

They are also currently working on proprietary software capable of monitoring hash rates of equipment so they will automatically switch computing power to the currency that is most profitable at that time.

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