Daily Crypto, Finance, and Tech News Summary – February 6, 2024

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Welcome, and thank you for being part of the MyZucoins community! Let’s get into an interesting piece of crypto, finance, or tech news to stay ahead.

Government officers measuring energy consumption of computer servers, various instruments

US To Collect Crypto Mining Energy Use Data Following ‘Emergency’ Request

The US Energy Information Administration (EIA) is set to scrutinize the energy consumption of cryptocurrency miners across the nation.

This move, spurred by an “emergency collection of data request,” aims to gather electricity usage details from prominent crypto mining firms.

The initiative is a response to concerns over the substantial energy demands of mining operations, particularly those involving proof-of-work cryptocurrencies like Bitcoin and Dogecoin.

These digital currencies rely on complex computational tasks for transaction verification and coin generation, a process criticized for its environmental impact.

Traditional crypto mining’s energy consumption has long been a contentious issue.

Critics argue that the process, especially for currencies like Bitcoin, consumes more electricity than entire countries.

In contrast, proponents suggest that crypto mining can promote renewable energy adoption by utilizing surplus green energy.

Recent studies, including one from Cornell University, support this by highlighting Bitcoin mining’s potential to facilitate the shift towards renewable energy sources, thereby aiding climate action.

The counter-argument is that the energy produced by the push to renewables is in part being rapidly consumed by crypto mining operations, instead of powering homes and other kinds of businesses.

The EIA’s upcoming survey, endorsed by the Office of Management and Budget (OMB), is not just about tallying kilowatts.

It’s an attempt to understand the evolving landscape of crypto mining’s energy use, identifying high-growth regions and the types of electricity powering these operations.

The survey also opens the floor to public commentary, inviting insights on the energy footprint of US-based crypto miners.

This initiative arrives amid a backdrop of heightened scrutiny over crypto mining’s environmental footprint and its implications for power grid stability.

With Bitcoin’s price surge acting as a catalyst for increased mining activity, the EIA expresses an urgent need to grasp the sector’s energy dynamics.

This urgency is underscored by recent weather events that have strained the US power grid, raising concerns about the potential impact of surging mining activities on electricity demand and consumer prices.

Despite skepticism from some industry insiders who argue against the perceived emergency, the EIA’s move marks a significant step towards addressing the environmental and operational challenges posed by cryptocurrency mining. Read more here and here.

More On This Topic:

Bitcoin mining intensifies climate crisis concerns.

Bitcoin Mining: A pricey game of compute, energy and policy. Where could the future of Bitcoin mining lead? What do emerging cryptos need to solve?

USA White House proposes 30% crypto mining gov tax.

Blockchain’s consensus problem: A Bitcoin mining pool accused of censorship, blocking transactions. How does Zucoin solve blockchain’s consensus problem?

Blockchain’s 51% paradox: Power, trust, and the fight to keep decentralization. A ground-up rethink: Splitchain and Zucoins’ approach to it.

How Does Zucoin Address Energy Concerns Of Traditional Crypto Mining Systems?

Bitcoin mining, and thus transaction validation processes, will be dominated by those with access to the cheapest energy and computing power.

This is currently those who have cheap access to fossil fuels.

It’s extremely hard to beat someone who has an oil field in their backyard.

Bitcoin mining warehouses tend to crop up near cheap energy sources.

This means areas like the Middle East, Russia and US states like Texas, amongst others, will probably have a strong influence over Bitcoin’s mining and transaction verification operations for a while yet.

Let’s not forget that Bitcoin consumes more energy the more people that get involved in mining.

This is called the hash rate mining difficulty.

It’s a clever feature of the Bitcoin blockchain system, but it consumes enormous amounts of energy—on purpose.

Zucoin has taken a completely different approach to reach the same end goal—efficient processing of transactions at scale while keeping things decentralized.

The recent move by the U.S. Energy Information Administration to monitor the energy consumption of cryptocurrency miners brings to the forefront a longstanding debate about the environmental impact of digital currencies.

This scrutiny is primarily directed at proof-of-work (PoW) cryptocurrencies, such as Bitcoin, which require substantial energy for mining operations.

Zucoin—a cryptocurrency based on the Splitchain network is not only aware of these environmental concerns but actively addresses them through its underlying technology and strategic choices.

Zucoin’s Splitchain network isn’t a consensus mechanism or competitive mining operation.

Instead, Splitchain focuses on truth-finding algorithms that are inherently more energy-efficient and steer the network towards cooperation, not competition.

This approach minimizes the environmental footprint of mining, sidestepping the primary issue that the U.S. EIA aims to tackle.

By design, Splitchain circumvents the high energy consumption associated with PoW mining, aligning with global calls for sustainable blockchain technologies.

Splitchain is designed to run on a wide range of common web systems, so energy consumption has to be low.

This should have the side effect of helping the Splitchain network to decentralize as well, over time.

By reducing participation running costs and fees, more people should be able to join.

Zucoin, through its energy-conscious Splitchain transaction settlement mechanisms, embodies the principle of responsible innovation, where the pursuit of technological advancement does not come at the expense of environmental waste.

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Disclaimer: Of course, this is not advice, financial or otherwise. It’s also important to consider the risks and challenges associated with any potential benefits.