The schematics would be open source so that businesses and individuals could earn money by running critical infrastructure for the bitcoin network.
Square CEO Jack Dorsey said in a tweet last week that the payments company might build a bitcoin mining rig. The machine, essentially a desktop PC optimized for crunching numbers rather than running consumer applications, would be an open-source project, meaning Square would release the schematics so anyone could build the machine themselves.
Foundational to bitcoin is its decentralized nature — transactions are processed by miners, individuals who use intense amounts of processing power to verify transactions and allow them to clear. This process is vital to keeping the network running, and miners are rewarded in turn with cryptocurrency in the form of processing fees.
Native internet currency — Cryptocurrencies including bitcoin have been criticized for their intense energy usage — much mining was done in China until recently, thanks to cheap energy, but warehouses of rigs have also been located in other places with ideal conditions, like Iceland where a consistently cold climate means there’s less need to pay for cooling systems. Dorsey said in a follow-up to his initial tweet that bitcoin networks need to become more energy efficient.
Square was a fairly early adopter of bitcoin, allowing its 40 million users of the Cash app to buy and sell the currency. Dorsey has called bitcoin the “native currency of the internet” because it’s consensus-driven — any changes to the currency must be approved by a majority — and built by “everyone,” because there’s no central governing body. Because bitcoin is an open-source protocol, it’s not burdened by the legacy banking systems that are incompatible and make a simple transfer take one or two business days. Users of Venmo could send money to Cash App users seamlessly because both apps speak the same language, and more services could be developed that use digital currency because traditional banks aren’t getting in the way.
Not without challenges — Sending a bitcoin, in theory, should be as easy as sending an email. There are problems, though, notably a relatively high cost to process transactions due to energy prices and a limited amount of miners on the system. Adding more miners could help alleviate this strain.
"We believe there needs to be a global native currency for the internet,” Dorsey said last year. “Just as everyone should be able to participate in the economy and have access to the same tools and services, so too should everyone be able to participate in cryptocurrencies and have access to its underlying innovation.” He continued that he sees Square as providing the tools to make it easy for people to use bitcoin, which could, in turn, generate a lot of revenue for the company.
Square recently said its revenue from bitcoin amounted to $2.72 billion in the second quarter of 2021, with gross profit coming in at $55 million.
Bitcoin is currently priced at over $61,000 per coin. The currency has long remained stubbornly a speculative asset — people buy and hold it rather than use it like an actual currency. Making it easier to actually use bitcoin could change that, and maybe the price would start to make some semblance of sense rather than be couched entirely in hopeful projections for its potential. More mining rigs would, theoretically, bring down the cost of using bitcoins and speed up transaction times.
EOS Slashes Gains after Rally Fueled by Community's Revolt Against Block.one – Cryptonews
A quick 3min read about today's crypto news!
EOS investors took a chance to exit after a strong rally yesterday, prompted by the news that the EOS community voted to stop token vesting to Block.one, the developer of EOSIO, an open-sourced blockchain software.
At 08:48 UTC, EOS trades at USD 3.47 and is down almost 6% in a day. However, it’s still up sharply as it traded below USD 3.20 before going almost vertical in the morning on Wednesday (UTC time). The rally helped some investors cash out as the price is still down by 29% in a month, trimming its gains over the past 12 months to 24%.
The EOS Network Foundation (ENF), composed of the dissatisfied members of the EOS community who claim that Block.one is no longer acting in the network’s best interests, has rebelled against the company in a bid to gain the EOS network’s intellectual property.
The foundation has also discussed with EOS block producers, decentralized entities that govern the EOS network, convincing them to halt payments to Block.one.
On December 8, the top 25 EOS block producers approved to halt issuing EOS 67m (USD 232m) that were scheduled to be unlocked and distributed to Block.one over the next six to seven years.
“Through a super majority consensus, the EOS network has taken its future in its own hands. This begins a new era for EOS and highlights the power of the blockchain to enable a community to stand up against corporate interests that don’t align with theirs,” said Yves La Rose, who now runs the ENF.
La Rose, formerly the CEO of the internet company EOS Nation, announced that he is the CEO of the ENF back in August, saying that “EOS is in a state akin to exsanguination” and blaming Block.one for it.
In October, La Rose further continued his opposition against Block.one, highlighting that the network wants to fork out from Block.one. In a medium post, he wrote that “as it stands, EOS has been a failure of monumental proportions on various levels.”
Later at a virtual event, he declared his stance towards Block.one, saying:
“What we are experiencing is a shift whereby the EOS community is placing itself in a position to be able to move away from Block.one, essentially forking them out. Until this formal shift occurs Block.one will simply continue weighing EOS down.”
Following the criticism by Yves and other members of the EOS community, Block.one revealed that it has inked a deal with Brock Pierce‘s Helios to bring additional growth to EOS and serve its “community through several high ambitions, including creating an EOS Venture Capital fund.”
As part of the deal, Block.one agreed to pay EOS 45m to Helios. However, Block.one only controls EOS 8m as the remaining EOS 37m are still vesting — and given that the community has halted payments to Block.one, the firm might not get those tokens.
Nevertheless, while the ENF and Block.one have engaged in dialogues, they couldn’t reach a conclusion. According to the ENF, one major problem was that the EOS intellectual property sits on Bullish’s—a yet-to-be-created exchange by Block.one—balance sheet.
This means that Block.one would have to purchase the EOS intellectual property from Bullish. This has set up a barrier particularly that Block.one wouldn’t publicly commit to gaining the intellectual property from the exchange.
Meanwhile, Block.one co-founder Brock Pierce revealed Wednesday that he is seeking to reach a conclusion with Yves and the ENF.
“I’m working with Yves and the ENF on a mutually beneficial proposal for B1 and Bullish’s consideration that would allow the ENF and the EOS community to take a leadership role in the future of EOSIO’s development and intellectual property,” Pierce said.
– EOS Down as Community ‘Forks Out’ Block.One
– Block.one to Make Voice NFT-based Amid Non-Fungibles Market Cool Down
– Block.one Secures USD 10B To Compete With Coinbase, Binance & Co
– Ex-Block.One CTO Larimer Makes a Comeback With Social Network Project
Miami jury rules in favor of Craig Wright, who claimed to invent bitcoin – CNBC
Why China's bitcoin miners are moving to Texas – BBC News
By Zhaoyin Feng
BBC News, Washington
China's ban on cryptocurrency mining has forced bitcoin entrepreneurs to flee overseas. Many are heading to Texas, which is quickly becoming the next global cryptocurrency capital.
When China announced a crackdown on bitcoin mining and trading in May, Kevin Pan, CEO of Chinese cryptocurrency mining company Poolin, got on a flight the next day to leave the country.
"We decided to move out, once [and] for all. [We'll] never come back again," Mr Pan told the BBC.
Headquartered in Hong Kong, Poolin is the second largest bitcoin mining network in the world, with most of its operations in mainland China. The country was home to around 70% of global bitcoin mining power, until the clampdown sent the price of bitcoin into a tailspin and caught miners off guard.
Now China's "bitcoin refugees" are urgently scrambling to find a new home, whether in neighbouring Kazakhstan, Russia or North America, because for bitcoin miners, time is literally money.
"We had to find a new location for the [bitcoin mining] machines," Poolin's vice-president Alejandro De La Torres said. "Because every minute that the machine is not on, it's not making money."
In what some call the "Great Mining Migration," the Poolin executives are among the many bitcoin miners who have recently landed in a place reputed as part of America's wild wild west: Austin, Texas.
Bitcoins are a digital currency with no physical form – they exist and are exchanged only online.
They are created when a computer 'mines' the money by solving a complex set of maths problems and that is how bitcoin 'miners' who run the computers earn the currency.
This takes a lot of energy.
As a new form of money that transcends national boundaries, there is also much confusion and potential to run afoul of government rules – so two things bitcoin entrepreneurs value are cheap electricity and a relaxed regulatory environment.
The Lone Star State fits the bill to a tee.
For Mr Pan, Texas felt like home almost instantly. Days after his arrival, he was gifted an AR-15 rifle, which he says he may use to "hunt hogs from a helicopter" one day.
While the shooting ranges and Texas barbeque provide for welcome entertainment, legal protection for business is the major attraction for the bitcoin miners. "What happened to us in China won't happen in the US," Mr De La Torre says.
Governor of Texas Greg Abbott has been a vocal supporter for cryptocurrency. "It's happening! Texas will be the crypto leader," he tweeted in June. In the same month, the Lone Star State became the second US state after Wyoming to recognise blockchain and cryptocurrency in its commercial law, paving the way for crypto businesses to operate in the state.
Many Chinese bitcoin companies have looked to Texas for stability and opportunity. Shenzhen-based firm BIT Mining has planned to invest $26 million to build a data centre in the state, while Beijing-based Bitmain is expanding its facility in Rockdale, Texas. This small town with around 5,600 residents once housed one of the world's largest aluminium plants, and now it's emerging as the next global hub for bitcoin mining.
There might be another underlying connection between the industry and the state, as De La Torre says that bitcoiners and Texans share the same values. "Texans take their freedom and rights very seriously, and so do we bitcoiners."
Experts believe China's bitcoin crackdown was motivated by having greater control over the financial markets, and it may become a boon for America.
"The migration benefits the US in terms of talent acquisition and furthering the innovation ecosystem," says Kevin Desouza, a business professor at the Queensland University of Technology who has done research on China's digital currency policy. In return, the bitcoin miners get access to a thriving and innovative community, as well as more diverse sources of capital, according to Prof Desouza.
Other than a stable regulatory environment, the energy-hungry industry is hunting for cheap electricity in Texas.
Texas has some of the cheapest energy prices in the world, due to its deregulated power grid. Consumers enjoy more choices of electricity providers, which encourage providers to lower prices to stay competitive. During peaks of electricity demand, bitcoin farms can even sell unused power back to the grid.
Although El Salvador is set to become the first country to adopt bitcoin as a national currency, bitcoin miners prefer the US because of its well-developed electrical infrastructure, says Mr De La Torre.
But some analysts warn that the "Great Mining Migration" may lead to serious repercussions, as cities and towns struggle to meet the huge energy appetite.
In February, blackouts following a deadly snowstorm left millions of homes and businesses in Texas without power for days. More than 200 people died. During the power outage, bitcoin farms were compensated to stay offline.
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The increased scrutiny of Chinese companies in America may also lead to more attention on these mining newcomers. Texas recently passed a law that prevents "hostile foreign actors" from accessing critical infrastructure, including its power grid. The new law was reportedly prompted by a Chinese billionaire's plan to build a wind farm in southwest Texas. Critics allege that the project could be used to hack into the Texas energy grid and to gather intelligence from a nearby US military base.
Prof Desouza says that while access to electricity grids is unlikely to be an issue for bitcoin miners in the short term, political risk will continue to evolve.
The bitcoin miners do miss something in China – cheap labour cost and speedy construction.
According to Mr Pan, while a new bitcoin farm takes up to five months to build in China, it could take as long as 18 months in Texas. Global shipping prices have also skyrocketed during the pandemic, making it significantly more expensive to ship mining machines from China to the US.
Despite the costly and time-consuming efforts, Mr Pan says his company is committed to settle in Texas, "It's a free land, and a lot of bitcoiners are here," he says, "so we feel: 'whoa, family reunion.'"
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