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.
Senator Cynthia Lummis is making a bold new proposal to establish a Bitcoin reserve in the US. This follows President-elect Donald Trump’s recent declarations in the run-up to the US elections.
Her bill, the BITCOIN Act of 2024, aims to have the US Treasury acquire 1 million Bitcoin (BTC) over five years, a massive move that would position the US as a leader in financial innovation.
Senator Cynthia Lummis Advocates Bitcoin Reserve
The Wyoming senator wants the plan spread across five years, with purchases of 200,000 BTC tokens every year to develop America’s Bitcoin reserve. At current rates, that translates to an investment of about $76 billion.
“We are going to build a strategic Bitcoin reserve,” Lummis shared on X (formerly Twitter).
Notably, Lummis’s side of the political divide now holds the majority in both the Senate and House committees. According to Stand With Crypto, 261 pro-crypto candidates have been elected to the House of Representatives against 116 anti-crypto candidates. On the other hand, there are 17 pro-crypto candidates in the Senate and 12 anti-crypto lawmakers.
Read more: How To Buy Bitcoin (BTC) and Everything You Need To Know
With this, the chances of Senator Lummis’ Bitcoin Bill passing through Congress are far better. This is as opposed to the Biden administration, where efforts toward bipartisan bills were greatly stifled due to a divided Congress.
This political alignment, along with Bitcoin’s recent surge to a new all-time high, adds momentum to Lummis’ initiative. Industry leaders, including Michael Saylor of MicroStrategy and Samson Mow, have shown support, stressing Bitcoin’s potential as a national asset.
Mow highlighted Bitcoin’s value at sub-$100,000, pointing out its potential strategic importance if prices soar above $500,000 in coming years.
“Good luck Senator Lummis. I suggest acting quickly. The difference between acquiring Bitcoin below $0.1 million vs. $0.5 million will have massive geopolitical ramifications,” Mow wrote.
Framework for Secure BTC Management
The BITCOIN Act does not stop at Bitcoin acquisition. It also introduces a framework for managing Bitcoin securely within Treasury vaults. It aims to reduce national debt by half by 2045. This would serve as a hedge against inflation and a potential powerhouse for US debt management.
President-elect Trump publicly endorsed the creation of a national Bitcoin reserve during the Bitcoin 2024 conference in Nashville. His remarks continue to stir interest among crypto proponents and Republicans as the then-presidential aspirant emphasized Bitcoin as a “core of financial independence” for the US.
“It will be the policy of my administration…to keep 100% of all the Bitcoin the US government currently holds or acquires into the future. This will serve in effect as the core of the strategic national bitcoin stockpile…It’s been taken away from you,” Trump said.
Meanwhile, state governments are also eyeing Bitcoin, with Florida’s Chief Financial Officer Jimmy Patronis recently endorsing Bitcoin as a “strategic reserve” for state pensions. Florida’s pension fund, among other states like Wisconsin and Michigan, would benefit from Bitcoin’s long-term appreciation, diversifying investments amid economic uncertainty.
Nevertheless, while the plan has garnered support, it raises questions about economic risks and global impacts. Some economists warn of potential volatility in tying national debt management to cryptocurrency. However, advocates point to Bitcoin’s finite supply and growing international adoption as a hedge against inflation and market fluctuations.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
With Trump’s support, a Republican-led Congress, and growing state-level backing, the plan has momentum. This makes the concept of a national Bitcoin reserve a closer reality than ever before. If implemented, the BITCOIN Act could place the US at the forefront of a global financial evolution.
“Other countries will follow,” another popular user on X added.
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.
The US presidential elections have come and gone, and the only thing left is the results. Interestingly, a snapshot of the Bitcoin price during the elections showed Bitcoin trading just above $70,000. This is a notable price to follow, as history shows this might be the price support for Bitcoin in the foreseeable future. Interestingly, this phenomenon goes back to the Bitcoin price levels in previous US elections.
Why Bitcoin Price Might Never Dip Below $70,000 Again
Bitcoin has largely been on an uptrend since Monday, when it kicked off a run after it rebounded to the upside from $67,000. This run continued, allowing the Bitcoin average price during the 2024 presidential elections to be around $70,110.
Historically, U.S. election cycles have often been accompanied by shifts in Bitcoin’s value, marking crucial price points that tend to establish longer-term support levels.
To understand this trend, we need to look at the past four election cycles. Back in 2012, during the early days of the crypto industry, the Bitcoin price traded at a modest $10 on the US presidential election day, a price point that now seems almost unimaginable. By 2016, Bitcoin’s election-day price had climbed to $710, setting a new baseline that it has never revisited since.
The most interesting one was what happened after the 2020 US presidential election, when the Bitcoin price was trading around $13,555. The Bitcoin price has never revisited this price point again since then up until the time of writing. What’s more interesting is that this price point even served as the lowest support level during the 2022 bear market price crash.
If these historical trends are any indication, the 2024 election-day price of $70,110 could become a similar stronghold and a price floor for Bitcoin in the coming years. This level might even serve as critical support should a bear market eventually take hold at any point.
What’s Next For The Bitcoin Price?
As of now, Bitcoin is trading above $73,200 after experiencing an intense surge over the past 24 hours. This remarkable rally saw Bitcoin climb nearly 10% within a single day, reaching an intraday high of $75,358. This milestone has now become Bitcoin’s highest trading level, as it broke past its previous all-time high of $73,737 in March 2024.
Although the Bitcoin price has pulled back slightly likely due to some investors cashing in on recent profits, the rally is expected to resume anytime from now. Considering this momentum, Bitcoin remains well-positioned to challenge the $80,000 mark before the end of November, especially if buying interest continues to drive the current uptrend.
Featured image created with Dall.E, chart from Tradingview.com
Market analysts have continued to deliberate on how the Bitcoin price could react to a Donald Trump or Kamala Harris victory in the US presidential elections. History indicates that Bitcoin’s future trajectory is bullish, irrespective of who wins the elections.
How The Bitcoin Price Has Reacted To Previous Winners
The Bitcoin price has always hit a new all-time high (ATH) regardless of the winners in the past US presidential elections. In 2012, after Barack Obama won the elections, Bitcoin rallied and reached a new ATH of $1,200 in 2013. Its price then consolidated until the next election in 2016.
The 2016 US presidential elections, which Donald Trump won, also sparked the beginning of another impressive rally for the Bitcoin price, which rose to a new ATH of $19,000 the following year. In 2020, following Joe Biden’s victory in the US presidential election, BTC rose to a new ATH of $69,000.
The Bitcoin price rally after the US presidential elections is believed to be due to the market certainty that the election aftermath provides. Meanwhile, based on history, the BTC rally could begin as soon as December, with the flagship crypto hitting a new ATH as soon as January 2024.
In 2016, the Bitcoin price rally began about three weeks before the election and went on to hit a new high in the first week of January 2017. In 2020, BTC had also consolidated for about six months before it began to rally from $11,000 just about three weeks before the US elections and then went on to reach a new high of $42,000 in January 2021.
Bitcoin’s recent price action also looks to be playing out the same way as BTC began rallying in mid-October and even came close to hitting its current ATH of $73,700 late last month. As such, there is the possibility that the flagship crypto could again retest this ATH and surpass it as soon as January 2024 or even before then.
There Could Be Some Volatility In The Coming Days
In an X post, Crypto analyst Ali Martinez warned that the days following the last three US presidential elections have been volatile for the Bitcoin price. However, he added that the overall trend has stayed upward.
Economist and crypto analyst Alex Krüger also warned about the potential pullback the Bitcoin price could face after the US elections. He claimed that there is a 45% chance that BTC could drop to as low as $65,000 if Kamala Harris wins the elections.
Due to his pro-crypto stance, Donald Trump looks to be the most preferred candidate in the crypto community. As such, the market could initially react negatively to a Harris win while taking in Trump’s loss.
At the time of writing, the Bitcoin price is trading at around $68,000, down in the last 24 hours, according to data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com
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