ESG FUD Archives

2nd April 2022

Light Speed: Kraken, Another Giant Exchange Integrates The Lightning Network

This is huge! Kraken now supports Lightning Network deposits and withdrawals. The suddenly popular second Layer protocol keeps growing and gaining importance. “Finally, traders have an instant and inexpensive way to move bitcoin on and off the platform,” Kraken said in their official announcement. The Lightning Network is much more than that, though.

What will happen once Kraken’s extensive clientele tries out Lightning transactions? Will the phenomenal experience change the way they see bitcoin? The second layer solution can perform millions of operations per second and all transactions cost pennies and offer final settlement. In using it, there are also privacy gains. The huge innovation, though, is the cash-like experience.

The Kraken integration comes with a Lightning node of their own. To implement it, the company used LND by Lightning Labs. The reason is that “they have the largest user base and we have a lot of people on the network that have lots of experience with LND. So it has proven to be easy to use and very reliable as well.” That’s according to Kraken’s bitcoin product manager, Pierre Rochard, who also said to Bitcoin Magazine:

“Adoption is going to come from people who have fiat in their bank account, and they need to get it into Bitcoin. Kraken is providing an excellent venue for them to do that, and then they can top up their mobile Lightning wallet and use it as a medium of exchange. That’s clearly the next step in terms of Bitcoin’s evolution.”

Designed with this and the cash-like experience in mind, Kraken limits Lightning deposits and withdrawals to 0.1 BTC.

BTC price chart for 04/02/2022 on Binance | Source: BTC/USD on TradingView.com
Kraken Announced Lightning Network Integration In 2020

Even though this looks like it magically happened, the integration had been in the works for a while. In 2020, Kraken stated its intentions:

“In 2021, we are committed to hiring a team to focus specifically on the Lightning Network, as part of our continuing effort to deliver the best possible experience for traders and investors.

We expect to allow clients to withdraw and deposit Bitcoin on Lightning in the first half of 2021, which will allow clients to move their Bitcoin instantly and with the lowest fees.”

It took a while, but it’s finally here. Market-wise, will this move the needle in favor of bitcoin? Will the world even notice? According to this list, Kraken became the 23rd exchange to support the Lightning Network. Among the giant ones already on board are Bitfinex, OKEx, OKcoin, BitMex, and Bitstamp. Among the up-and-coming ones, BullBitcoin, Buda, CoinCorner, Kollider, and Boltz.

This also means, that you're able to instantly move the lightning payment you received to @krakenfx to exchange it for fiat, basically reducing the currency exchange risk to zero.This completely changes the dynamic for fiat brick and mortar stores.https://t.co/bpNzKC7ZDL

— zero fee routing (@zerofeerouting) March 31, 2022

And, since we’re on lists, in their announcement Kraken provided Lightning wallet recommendations:

“For example, BTCPay Server enables Lightning payments for merchants, greatly improving the bitcoin checkout flow. For consumers, Breez, Phoenix and Muun bring Lightning to mobile with a modern user experience.”

As to the importance of the move for markets and business, a pseudonymous Lightning node operator that goes by “zero fee routing” puts everything in perspective. “This also means, that you’re able to instantly move the lightning payment you received to Kraken to exchange it for fiat, basically reducing the currency exchange risk to zero. This completely changes the dynamic for fiat brick and mortar stores.”

Attacking The ESG FUD Head On

The increase in Lightning Network adoption also brings a great opportunity with it. The community could clean up the disgusting ESG-based narrative enemies of bitcoin have been planting in mainstream media. Regarding this, in the already quoted interview Kraken’s Pierre Rochard said:

“With Lightning, you can send a payment off-chain that is much more energy efficient, not only because you’re not adding the miner fees, and thus the amount of electricity consumption by miners, but also because that payment only has to be stored and shared by the two parties in that channel.”

Do Greenpeace and Ripple not know that most bitcoin transactions are going to be off-chain in a few years? Do they not know that the Lightning Network alone will take bitcoin out of the conversation its enemies have been carefully manufacturing? Kraken certainly knows. And took action.

Speaking about Kraken, its CEO Jess Powell has been present on the news lately. He recommended buying bitcoin below $40K. During the Canadian crisis, he hinted that bitcoiners should take their funds out of centralized exchanges. And he refused to voluntarily ban Russian users, providing a convincing rationale to justify Kraken’s actions.

And now, his company integrated the Lightning Network.

Featured Image by Ferhat Deniz Fors on Unsplash | Charts by TradingView

14th February 2022

Intel Announces Mining Chips’ First Clients: BLOCK, Argo Blockchain, and GRIID

Intel ’s play to get into the bitcoin mining market might end up being the story of the year. In a post titled “Blockchain and the New Custom Compute Group,” Raja Koduri reveals a little of the company’s playbook. At Intel, he’s the senior vice president and general manager of the Accelerated Computing Systems and Graphics Group.

Related Reading | Jack Dorsey’s Block To Democratize Bitcoin Mining With Open Source Mining System

In the article, Koduri says, “we are focusing our efforts on realizing the full potential of blockchain by developing the most energy-efficient computing technologies at scale.” Intel’s play is deeper and harder than previously thought. They’re going all-in in the blockchain business. With a twist that every corporation is claiming for.

“Today, we at Intel are declaring our intent to contribute to the development of blockchain technologies, with a roadmap of energy-efficient accelerators. Intel will engage and promote an open and secure blockchain ecosystem and will help advance this technology in a responsible and sustainable way.”

That’s right, they’re tackling the problem “in a responsible and sustainable way.” And they’re calling the mining chips “accelerators” for some reason. Will the name catch on?

“Intel Labs has dedicated decades of research into reliable cryptography, hashing techniques and ultra-low voltage circuits. We expect that our circuit innovations will deliver a blockchain accelerator that has over 1000x better performance per watt than mainstream GPUs for SHA-256 based mining.”

This new line of Intel products responds directly to the ESG crowd. The bitcoin-consumes-too-much-energy FUD people. Soon enough, they’ll have to face Intel ’s PR machine. How can bitcoin consume too much energy if Intel’s product “has over 1000x better performance per watt than mainstream GPUs for SHA-256 based mining”?

BTC price chart for 02/14/2022 on Kraken | Source: BTC/USD on TradingView.com
Who Are Intel ’s First Clients?

We can’t prove it, but, all of these companies probably knew years ago about Intel’s plans to release a bitcoin mining chip. Again, Raja Koduri:

“Our blockchain accelerator will ship later this year. We are engaged directly with customers that share our sustainability goals. Argo Blockchain, BLOCK (formerly known as Square) and GRIID Infrastructure are among our first customers for this upcoming product. This architecture is implemented on a tiny piece of silicon so that it has minimal impact to the supply of current products.”

When NewsBTC analyzed Intel’s chip announcement, we summarized the situation as:

“This could be huge. Intel plans to enter the Bitcoin mining space with a cleverly marketed “ultra-low-voltage energy-efficient” ASIC chip. Considering that the chip shortage severely delayed the next generation of ASIC miners, this is tremendous. And, more importantly, it opens up the door for Bitcoin miners manufacturing in the USA. And in the rest of the Western world, even. ”

After that, we analyzed the situation’s implications:

“Now, the open-source Bitcoin miner that Jack Dorsey’s Block is working on makes a lot more sense. Theoretically, the silicon chip is the only part of an ASIC machine that can’t be bought in a hardware store. With that problem solved, by no less than an industry leader with immense manufacturing power, the sky’s the limit. If this whole thing materializes, expect a huge leap forward in the further decentralization of Bitcoin mining.”

Notice how Block is one of the first clients. And how Intel had the energy-efficient ASIC chip marketing ready from the get-go. And how Koduri even addressed the chip shortage in the last line there.

Intel’s Bonanza Chip’s Future

Reading between the lines, it’s clear that this is not a secondary project for Intel. They have high hopes for this low-energy chips play. Here, Koduri discusses the Custom Compute Group:

“The objective of this team is to build custom silicon platforms optimized for customers’ workloads, including blockchain and other custom accelerated supercomputing opportunities at the edge.

Onward, we aspire to leverage technologies from our zetta-scale computing initiative to deliver energy-efficient solutions.”

Related Reading | Green Energy: In NY, Bitcoin Mining Saved The Oldest Working Hydroelectric Plant

You read it here first, Intel ’s play to get into the bitcoin mining market might end up being the story of the year.

This is not financial advice, though.

Featured Image by geralt on Pixabay | Charts by TradingView

13th January 2022

Wikipedia Considers To Stop Accepting Crypto Donations Because Of The ESG FUD

Even Wikipedia fell for the environmental FUD surrounding Proof-Of-Work mining. A proposal to “stop accepting cryptocurrency donations” is currently under discussion. It starts with the same thin arguments that the whole mainstream media irresponsibly uses. However, it gets better and more interesting. In general, it’s amazing to see both sides of the argument unfolding. Even though there might be some information suppression going on.

Related Reading | Human Rights Foundation Accepts Fully Open Source Bitcoin Donations

Well do our best to summarize the whole thing, but people interested in the topic should take time to read it all. It’s full of twists and turns. The most amazing thing about the document is that real people wrote it. Wikipedia editors are not a sample of the world’s population, but, they’re heterogeneous enough to make the discussion interesting.

Wikipedia Falls For The Environmental FUD

The original proposal poses three problems with receiving cryptocurrency donations, but, in reality, we can summarize them all in the ESG FUD category. The three points are:

“Accepting cryptocurrency signals endorsement of the cryptocurrency space.”
“Cryptocurrencies may not align with the Wikimedia Foundation’s commitment to environmental sustainability.”
“We risk damaging our reputation by participating in this.”

It’s a shame that, to try to prove their points, the original author uses a questionable source and a discredited one.

“Bitcoin and Ethereum are the two most highly-used cryptocurrencies, and are both proof-of-work, using an enormous amount of energy. You can read more about Bitcoin’s environmental impact from Columbia or Digiconomist.”

Counterpoint: That Data Is Compromised

Even though it’s widely cited, an “employee of the Dutch Central Bank” posing as a neutral journalist runs Digiconomist. That fact alone disqualifies him as a credible source. However, his data is also under question because the “Digiconomist Bitcoin Electricity Consumption Index is not being driven by real world metrics and profitability as stated in the methodology.” So, we’re dealing with an intellectually dishonest individual who’s presumably paid to attack the Bitcoin network.

For more information on this shady character, go to the section “The Digiconomist is Disinformation.”

The Columbia report is newer, but it cites outdated data and debunked studies. Like the ridiculous one that doesn’t understand how PoW scales, or even works, and irresponsibly claims that crypto-mining could raise the Earth’s temperature by two degrees. Columbia’s main source, though, is the “University of Cambridge analysis.” That same organization literally said that “There is currently little evidence suggesting that Bitcoin directly contributes to climate change.”

However, they suspiciously erased that part from their FAQ. They changed the wording and now it just contains a “radical thought experiment” in which “all this energy comes exclusively from coal.” Even under those extreme circumstances, which are far-far away from reality, the energy use would be marginal. “In this worst-case scenario, the Bitcoin network would be responsible for about 111 Mt (million metric tons) of carbon dioxide emissions1, accounting for roughly 0.35% of the world’s total yearly emissions.”

ETH price chart for 01/13/2022 on Poloniex | Source: ETH/USD on TradingView.com
Protecting The Process Or Information Suppression?

Under the whole thread, there’s a section called “Discussion moved from proposal section.” It contains several suppressed pro-cryptocurrencies arguments. The reason is that the accounts that made them had “no other editing records”. What do the people proposing that those opinions should be removed argue? That they “risk that both vote gaming and manipulation of discussion to introduce bias and fake “bitcoin” news.”

Coincidentally, those low-edit accounts are the ones bringing forward the information on how bogus the original poster’s sources are. Someone had to say it and they did. And the administrators removed them from the main thread. Is this really what Wikipedia is about.

Luckily, other Wikipedia contributors managed to say that “Bitcoin is therefore a green energy stimulus, aligned with the Wikimedia Foundation’s commitment to environmental sustainability. “ Another user urged “everyone to understand more about Bitcoin as a whole package beyond its energy footprint (negligible when compared to the cost in oil and warfare of backing the US Dollar) as well as the continual exponential progress that has been made in making Bitcoin greener and greener.” Yet another one said “bitcoin core is a FLOSS project attempting to promote monetary freedom.”

In any case, the crypto detractors trying to game the vote might have a point. Except for the ridiculous “fake “bitcoin” news” claim. The header of the discussion says, “this is not a majority vote, but instead a discussion among Wikimedia contributors”. And the administrator tells them that they can’t remove opinions or votes. However, “an optimal RfC scenario would not actively silence any voices, but would allow community members to inform each other which participants are not community members, who may have alternative interests.” That’s fair.

What About The Votes? Is Wikipedia Banning Crypto Donations?

The vote doesn’t look good for crypto donations, but that doesn’t mean Wikipedia will ban them. At the time of writing, the “support” votes are approximately double than the “oppose” ones. And roughly 150 Wikipedia persons have voted. Does this mean the ESG FUD worked and cast a shadow over the whole crypto space that will be hard to shake? Absolutely it does.

Related Reading | New Contender Emerges Despite Wikipedia’s Begrudging Listing of Cardano

It also means that people WANT to believe. And are not willing to accept the overwhelming evidence that points to PoW mining being a net positive for the environment.

Fortunately, Bitcoin doesn’t care. Tick tock, next block.

Featured Image by James on Unsplash | Charts by TradingView

7th January 2022

ESG Organizations Send Letter To Congress About PoW Mining, Bitcoin Responds

Will the ESG FUD ever stop? As a Congressional subcommittee prepares to take a good look at Proof-Of-Work mining, “more than 70” national, international, state and local organizations wrote a letter to the “Congressional leadership.” In it, they use old and unreliable data to get their point across. They completely ignore all of 2021’s research and progress on the matter, because it would invalidate their argument.

The question is, will Congress buy their poorly researched, alarmist letter? The ESG FUD hit PoW mining like a ton of bricks in 2021. It might be based on a poor understanding of the subject at hand, but the public in general definitely bought it. And they quote the bogus numbers that their authorities invented left and right on social media.

Related Reading | Despite Crackdown, Bitcoin Mining Is Still Alive And Well In China

Also, the whole argument completely ignores Bitcoin’s main virtue. The orange coin provides a framework and tools for the world’s transition to a disinflationary system. Paraphrasing “The Price Of Tomorrow’s” author Jeff Booth, in the inflationary system that we live in, there’s a clear incentive for consumption. If your money’s purchasing power decreases by the minute, everybody will logically buy, spend, and consume everything in sight. That is the real monster that the planet’s facing. And Bitcoin fixes it.

In any case, Bitcoin’s resident ESG FUD expert, Nic Carter, took it upon himself to reply to the ESG organizations that sent misinformation to Congress. Let’s see how each part did.

The ESG Organizations Make Their Point, Nic Carter Counterpoints

The ESG organizations come out swinging from the introduction on:

“We, the more than 70 climate, economic, racial justice, business and local organizations, write to you today to urge Congress to take steps to mitigate the considerable contribution portions of the cryptocurrency markets are making to climate change and the resulting greenhouse gas (GHG) emissions, environmental, and climate justice impacts it will have.”

And their accuracies start from the get-go, also:

“In 2018, scientists writing in Nature warned that Bitcoin’s growth alone could singlehandedly push global emissions above 2 degrees Celsius within less than three decades.”

Those numbers are ridiculous. The study assumes a progression relative to the number of users of the network, and that’s simply not how Bitcoin works. Even if the whole planet adopted the Bitcoin standard, the network would still produce one block every ten minutes. Energy consumption is not directly related to the number of users.

What did Nic Carter respond? That the claim is “false, based on a debunked paper with a completely erroneous model of bitcoin.”

2. bitcoin's energy consumption will 'only get worse over time'

most likely will trail off over time, after peaking in the next decade (see https://t.co/8x0koM6nR9 for actually rigorous projections)

— nic carter (@nic__carter) January 6, 2022

Right after that, the ESG organizations even throw Ethereum under the bus:

“The Digiconomist’s Ethereum Energy Consumption Index estimates that the Ethereum blockchain will consume 71 terawatt-hours this year, nearly the same as the energy consumption of Colombia.”

Since the letter is about PoW mining, it makes sense. The Ethereum community seems to have completely ignored the letter, at least over at Twitter.

BTC price chart for 01/07/2021 on Bitstamp | Source: BTC/USD on TradingView.com
Bitcoin Incentivizes Green Energy Infrastructure

The ESG organizations continue their poorly-researched attack with:

“The GHG emissions from this exorbitant and unnecessary energy consumption is staggering.”

It’s not unnecessary at all. In fact, PoW mining is absolutely essential for a decentralized, permissionless system. And the energy consumption is directly proportional to the security of the network. Plus, it anchors it to the real world. Not to mention the fact that Bitcoin actually incentivizes and finances green energy infrastructure.

Then, the ESG crowd accuses Bitcoin of “exacerbating” the global chip shortage:

“Increased demand for these machines are exacerbating a global shortage of semiconductors. A bipartisan bill by Senators Maggie Hassan and Joni Ernst has called for a report on how cryptocurrency mining operations are impacting semiconductor supply chains.“

With ease, Nic Carter counterattacks with: “Bitcoin miners are not tier 1 clients, they don’t compete with Apple/Qualcomm/NVIDIA for space; the shortage is due to money printing and the demand shock. See section on semis here.”

5. Atlas/ greenidge increased power prices in NY.

The Atlas mine brought back online a fallow coal plant (converted to natgas) which now provides energy to the grid (in addition to mining). That's energy supplied to the grid which wasn't being produced beforehand

— nic carter (@nic__carter) January 6, 2022

Texas Doesn’t Know What Its Doing, The ESG Crowd Does

Then, the ESG researchers make wild, unbacked assumptions about Texas power:

“Following a crackdown on cryptocurrency miners in China, many miners are moving to Texas, due to its deregulated grid, taking away the power that Texans need.”

This completely ignores the fact that the state of Texas went to great lengths to attract those miners. And that, unlike the ESG organizations that signed the infamous letter, power companies in Texas regularly attend Bitcoin meetings. They are making an effort to understand the technology and the opportunities it brings to them. Also, as Carter puts it, “Majority of mining is in west texas where transmission bottlenecks mean prices routinely go negative. Huge overcapacity and limited demand for power outside of mining.”

Miners also participate in demand response, meaning they aren't online when the grid is overburdened. Their presence dramatically improves economics for renewables and does not compete with households during scarcity events.

— nic carter (@nic__carter) January 6, 2022

The state of Texas knows what it’s doing, they see Bitcoin’s future is bright. These ESG organizations think they know better, though:

“Adding more energy-guzzling crypto mining operations to Texas could exacerbate the sorts of blackouts the state already saw during the extreme cold in February — outages that reporting shows hit communities of color the hardest.”

Wow, playing the race card there. So low. And unrelated. Anyway, answering the claim that miners “could exacerbate” the February blackouts, Carter says. “Miners were/ would have been offline during this time, as we demonstrate here. They also help alleviate ‘black start’ issues through primary frequency response.”

9. Stronghold mining with coal waste is bad (implied)

The coal waste was going to oxidize naturally. It was going to combust anyway. This is an incentive to clean up a nasty site leeching into groundwater etc. Neutral from a CO2 perspective and ++ from an ecology view

— nic carter (@nic__carter) January 6, 2022

Three Other Prominent Bitcoiners’ Response

Are these direct responses to the ESG organizations’ letter? It’s not clear, but the authors published them in the same timeframe. The first one refers to SHA256, the set of cryptographic hash functions that Bitcoin uses. Nunchuk founder Hugo Nguyen said, “Once you understand that SHA256 is close to being 100% efficient at what it does, you’d stop calling it a “waste”. In fact, 100% efficiency is the exact opposite of “waste”. There’s nothing else like it.”

Once you understand that SHA256 is close to being 100% efficient at what it does, you’d stop calling it a “waste”. In fact, 100% efficiency is the exact opposite of “waste”. There’s nothing else like it. https://t.co/SLuVrAPfU2

— Hugo Nguyen (@hugohanoi) January 7, 2022

For his part, Swan Bitcoin’s Brandon Quittem attacks the concept of energy consumption being inherently bad. “Energy consumption is directly correlated with GDP. Want to help developing countries? Help them harness more energy. Interestingly, Bitcoin acts as a free market subsidy for energy investment.”

3/ Energy consumption is directly correlated with GDP.

Want to help developing countries? Help them harness more energy.

Interestingly, Bitcoin acts as a free market subsidy for energy investment.

Incentivizes developing otherwise uneconomical energy sources. pic.twitter.com/DJ6yYoz6WO

— Brandon Quittem (@Bquittem) January 6, 2022

And Kraken’s Dan Held states that “Bitcoin’s energy consumption is not “wasteful.” Why? Because “It is much more efficient than existing financial systems.” And we’re talking orders of magnitude, here. Not only that, “No one has the moral authority to tell you what is a good or bad use of energy (ex: watching the Kardashians).”

1/ Bitcoin’s energy consumption is not “wasteful.”

– It is much more efficient than existing financial systems– No one has the moral authority to tell you what is a good or bad use of energy (ex: watching the Kardashians)

Let's debunk this FUD