Bitcoin
Jaw-Dropping Energy Difference Between PoS Altcoins and Bitcoin
How green is crypto, really? Activists accuse the industry of environmentally-hazardous side effects, but how true are these claims? What is the environmental impact of crypto?
A new report from UCL, alongside an exclusive interview, addresses these questions and more.
Mining Costs
The alleged environmental costs of Bitcoin and cryptocurrency are an enduring thorn in the industry’s side. Prominent actors frequently debate controversial claims, but crypto enthusiasts are quick to dispute the harshest assertions.
Studies from reputable scientific agencies have repeatedly claimed that mining harms the environment, and this sentiment translates into political anti-crypto sentiment. However, news coverage frequently ignores the community’s best efforts, and exaggerations run rampant.
How can one make sense of all this? What are the charges of crypto’s environmental impact, and how serious are they?
To help answer some of these questions, BeInCrypto conducted an exclusive interview with Wes Geisenberger, VP of Sustainability and ESG at Hedera, a decentralized public ledger and stablecoin issuer. The firm seeks to stand above its Web3 competitors in terms of carbon footprint and sustainability.
Interestingly, Hedera is a partner of the UCL Centre for Blockchain Technologies, whose new reports on crypto’s environmental impact cast doubt on the proof-of-stake model altogether.
PoW or PoS
The heart of UCL’s new report is on the notion that Proof-of-Stake (PoS) blockchains are uniformly more environmentally friendly than Proof-of-Work (PoW) ones.
PoW protocols like Bitcoin are fully trustless and decentralized, and transactions are validated through a competitive network of miners. These equations solved by miners’ collective computing power update the blockchain and generate new coins, but different miners have an inherently adversarial relationship.
For PoS protocols like Ethereum, however, the blockchain processes transactions differently. Using validators instead of miners, new block creators must “stake” their own tokens rather than computational power, allowing for a more collaborative experience. This, allegedly, makes the mining experience more efficient.
Read more: Proof of Work and Proof of Stake Explained
According to PoW advocates, the main drawback of the latter system is that it is much more prone to centralization. Nonetheless, UCL’s new report seeks to interrogate these claims more closely.
Are all PoS blockchains created equal? If these protocols are greener than PoW, how much greener are they? What are the best ways that the industry can face these challenges head on?
As far as Geisenberger is concerned, the entire space “has a responsibility to understand its impact on the world around us and in particular the environment.” He added that “we need to measure our impacts like the rest of the financial and technology world, built on standards and in an easily comparable way. There’s also a need to extend that to better understand the impact of how technologies, treasuries, and users leverage their resources to achieve positive impact.”
If the crypto ecosystem wants to impact our natural ecosystem, attitudes like this are crucial.
Bitcoin’s Waste
Some of the bitterest arguments over crypto’s ecological impact center around Bitcoin, the first and largest cryptocurrency. The debates over Bitcoin often take place on the same well-trodden territory: what percentage of mining electricity is renewable? Do techniques like flared gas mining constitute green energy or not?
Bitcoin’s biggest advocates are quick to point out all the massive green energy use cases that literally power the industry. Hydroelectric operations can sell excess energy in low-demand periods, productively using clean power that would otherwise go to waste. Flared gas mining is similar, with an inevitable waste product of the petrochemical industry getting a new use.
Aren’t Bitcoin’s critics eager to paint its impact in the most damning light possible? That may or may not be true, but UCL asserts that even the rosiest picture is still pretty grim.
As the data shows, Bitcoin stands head-and-shoulders above all PoS blockchains surveyed in terms of electrical consumption. The study concluded that “all of the PoS-based DLTs (Distributed Ledger Tokens) analyzed have an energy consumption that is negligible compared to that of major PoW blockchains. To the extent that energy consumption may be considered problematic, this is not an issue in any PoS design.”
The study lists a number of limitations in its methodology and was not able to nail down a primary cause for these discrepancies. Still, as Geisenberger put it, “task forces across the industry [are] created to answer difficult questions in increased regulatory and voluntary disclosures in carbon accounting.”
A wide range of organizations are tackling these and other questions, and their results contribute to a greater scientific consensus.
Looking Forward
Ultimately, environmental impacts in the industry are a very controversial issue, and bad-faith actors exacerbate it. Both pro- and anti-crypto advocates can twist meanings and misinterpret studies, especially for concrete political ends.
PoW supporters have legitimate concerns besides the environmental, too, further complicating the issue. If PoS blockchains are not truly decentralized, does it matter if their energy consumption is lower? If PoW consumes energy that would otherwise be “wasted,” are its higher costs negated?
The crypto community must grapple with these and other questions for years to come. Luckily, with an innovative spirit and dedicated researchers like those at UCL, we’re sure to meet the challenge.
Disclaimer
Following the Trust Project guidelines, this feature article presents opinions and perspectives from industry experts or individuals. BeInCrypto is dedicated to transparent reporting, but the views expressed in this article do not necessarily reflect those of BeInCrypto or its staff. Readers should verify information independently and consult with a professional before making decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Michael Saylor, co-founder of MicroStrategy, has hinted at the possibility of additional Bitcoin purchases.
In a November 24 post on X (formerly Twitter), Saylor teased the company’s plans following its successful $3 billion fundraising round on November 22.
MicroStrategy’s $3 Billion Raise Could Fuel New Bitcoin Purchases
The Bitcoin bull mentioned that MicroStrategy’s portfolio tracker, SaylorTracker, “needs more green dots.” These markers symbolize the company’s each Bitcoin acquisition, fueling speculation about another significant purchase.
Saylor’s recent hints echo his previous two Sunday posts, which preceded announcements of large-scale Bitcoin acquisitions. During this period, MicroStrategy added approximately 80,000 BTC to its holdings, worth over $6 billion at the time.
Meanwhile, the recent $3 billion funding — raised through the issuance of convertible debt — could be instrumental in financing these new acquisitions. The convertible notes, sold privately to institutional investors under US securities laws, will mature on December 1, 2029. These notes carry a 55% premium and an implied strike price of $672 per share of MicroStrategy’s Class A common stock.
Market observers noted that this fundraiser aligns with MicroStrategy’s ambitious “21/21” initiative, which aims to raise $42 billion over three years through a mix of equity and fixed-income instruments.
The company remains the largest Bitcoin-holding public entity, with 331,200 BTC valued at over $32.7 billion. According to Saylor, MicroStrategy’s treasury operations have delivered a year-to-date Bitcoin yield of 41.8%, generating a net benefit of around 79,130 BTC, or roughly 246 BTC daily, without the operational costs associated with mining.
Additionally, this strategy has also bolstered MicroStrategy’s stock performance. MSTR shares have surged over 515% since the start of the year, making it one of the most actively traded stocks in the US.
Saylor emphasized that MicroStrategy’s operations are driven by its Bitcoin holdings, which are optimized through strategic financial tools like ATM offerings, enabling the company to reduce risk and volatility while enhancing shareholder value.
“MicroStrategy is powered by its Bitcoin treasury operations. We sell volatility through our ATM offerings, strip BTC risk, volatility, and performance from our fixed-income securities, and transfer that performance to our MSTR equity holders,” he stated.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Recent gains in Bitcoin are owed in part to changes in the political environment, particularly in the US. Incoming US President Donald Trump is backing cryptocurrencies, sparking renewed market optimism among investors.
From reforms in regulatory structures to a proposal for a national Bitcoin reserve, the policies he enforces provide Bitcoin an exceptional outlet for growth in an increasingly open and friendly new landscape. These changes places the US in a strategic position as the world’s leader in crypto innovation while giving a fertile ground for Bitcoin to continue growing.
Crypto On The Rise
These possible changes have been well taken by market participants, who have seen the highest market dominance of BTC at 59%. A bill being worked out may permit state-chartered banks to mint stablecoins without seeking prior approval from the Federal Reserve, putting the US in a very commanding position in the race to dominate financial innovation. Furthermore, proposals to deregulate the energy industry may favor crypto mining, which will place the US in a better position in the global race for blockchain.
🧐 Bitcoin’s flirtation with $100K continues as crypto’s top market cap has now reached an ATH of $99,850. As its price continues to hit round numbers and fulfill limit sell orders, it is widely being perceived as only a matter of time. pic.twitter.com/Qb1LTznuij
— Santiment (@santimentfeed) November 22, 2024
Historic Rally: BTC Approaching $100K
Bitcoin is trading at nearly $99,850 and is on the verge of the long-awaited $100,000 milestone. Similar to other bull runs, including the one witnessed after the elections in 2020, when the price of Bitcoin nearly doubled in a matter of a few months, some believe institutional interest coupled with friendly economic conditions and increased on-chain activity are the drivers of this phenomenal appreciation of the price of Bitcoin.
Source: VanEck
According to VanEck’s latest report, Bitcoin still is in its early stages of the rally, and there is minimal technical resistance in its way. With investor enthusiasm building, growing calls for the alpha coin to be adopted as a strategic reserve, and with a supportive US government, this rally appears well-positioned to continue. Experts are optimistic that Bitcoin is going to push forward and hit new highs.
The Future Of Bitcoin: Cautious Optimism
Analysts, while acknowledging that momentum is strong, point out that the market may run too hot, and early signs in the development are a rise in funding rates and increased unrealized profits. However, even from this stage, long-term prospects appear bright given strong institutional demand, solid on-chain metrics, and supportive regulatory changes, according to the forecast of $180,000 by VanEck for Bitcoin in the current cycle.
While historical data may indicate the crypto asset’s growth is decelerating as the markets mature, the cryptocurrency still shows hopeful prospects in the near term. So far, this rally displays the confidence of investors and has incrementally acquired recognition regarding Bitcoin’s role in a changed financial sector.
Featured image from CNBC, chart from TradingView
All eyes are on Bitcoin, especially as many traders continue to anticipate a break above the $100,000 mark. This anticipation has cascaded into a spike in activity, especially among Bitcoin whales. Interestingly, Bitcoin whales are making bold statements amidst the anticipation, with on-chain data pointing to an accumulation of over 40,000 BTC in just 96 hours among this holder cohort.
This interesting accumulation coincides with the Bitcoin price reaching a peak of $99,645 in the last 24 hours, adding further momentum to the narrative of a possible historic price milestone.
Examining The Holding Patterns Of Bitcoin Whales
Bitcoin’s recent price dynamics have put the spotlight on Bitcoin whales. Ali Martinez, a well-known cryptocurrency analyst, drew attention to the remarkable activity of Bitcoin whales on social media platform X.
While highlighting Santiment data, Martinez revealed that Bitcoin whales have bought over 40,000 BTC worth approximately $3.96 billion in the past 96 hours. Notably, the Bitcoin whales referred to in this metric by Santiment consist of addresses holding between 100 and 1,000 BTC.
This aggressive accumulation comes at a critical juncture for Bitcoin, with prices flirting near the much-anticipated $100,000 mark. Such whale activity typically reduces the available supply of Bitcoin on the open market, which is expected to keep pushing up the Bitcoin price.
Despite the increase in whale accumulation, on-chain data from Glassnode suggests that long-term holders have upped their profit-taking in tandem. Particularly, over 128,000 BTC has been sold by long-term holders since early October.
However, this long-term holder profit taking has so far been offset by the demand from US Spot Bitcoin ETFs. These ETFs have acted as a counterbalance, absorbing nearly 90% of the Bitcoin sold by long-term holders.
A possible explanation is that long-term holders are exiting their self-custody of Bitcoin and are instead diverting their holdings into Spot Bitcoin ETFs in order to benefit from their regulatory clarity. According to data from SoSoValue, Spot Bitcoin ETFs in the US witnessed consecutive days of inflows throughout last week to bring the total inflow to $3.38 billion, which is the largest weekly inflow since their launch in January 2024.
What’s Next For Bitcoin Price?
Looking ahead, the Bitcoin price is definitely on its way to break above $100,000 in the next few days. However, it remains to be seen what happens after that. Crypto analyst Tony Severino has speculated that the Bitcoin price peak could double within a timeframe of two weeks to two months following the break above $100,000.This prediction is based off of the Bitcoin price performance after it first broke above the $10,000 price level in 2017.
On the other hand, veteran analyst Peter Brandt suggests there could be some sort of selling pressure among bulls once the Bitcoin price breaks above $100,000.
“What I had in mind here is the possibility that bulls will sell their BTC sub $100,00 thinking they will buy a correction that does not come, then turn bearish if Bitcoin goes to $120,000 believing price must come down,” he said.
Nevertheless, the current crypto market landscape is set in place for a continued Bitcoin price increase in the next few weeks and months.
Featured image from DALL-E, chart from TradingView
Harmful Livestreams Prompt Ban Calls
Super Pepe Coin Whale Sells 130B PEPE, Shifts Focus To EIGEN
XRP Price Builds a Base: Can Bulls Ignite a New Rally?
FIFA And Mythical Games Deal Highlights Role Of Blockchain In Sports Gaming
Solana (SOL) Bulls Stay in Control: Rally Far From Over?
BTC and Major Altcoins Pullback, SAND Soars 60%
2.52 Million Altcoins Are Ruining Crypto’s Future
Animoca Brands Valuation Tanks 75% In Two Years, Here’s Why
Crypto exchange BingX hacked for $43 million
Are The Big Players Losing Interest?
Hong Kong’s Securities Association Tips Authorities On Crypto Self-Regulation
Coinbase cbBTC Set to go Live on Solana
2.52 Million Altcoins Are Ruining Crypto’s Future
Animoca Brands Valuation Tanks 75% In Two Years, Here’s Why
Crypto exchange BingX hacked for $43 million
Are The Big Players Losing Interest?
Hong Kong’s Securities Association Tips Authorities On Crypto Self-Regulation
Coinbase cbBTC Set to go Live on Solana
-
Bitcoin20 hours agoBitcoin Price Is Decoupling From Gold Again — What’s Happening?
-
Market23 hours agoWhy a New Solana All-Time High May Be Near
-
Bitcoin18 hours agoAI Company Invests $10 Million In BTC Treasury
-
Market18 hours agoIs the XRP Price Decline Going To Continue?
-
Market17 hours agoToken Unlocks to Watch Next Week: AVAX, ADA and More
-
Bitcoin16 hours agoSenator’s Bold Proposal To Replenish US Reserves
-
Market15 hours agoCan the SAND Token Price Rally Be Sustained?
-
Bitcoin14 hours agoBitcoin Whales Remain Determined, $3.96 Billion Worth Of BTC Gobbled Up In 96 Hours
