26th July 2023 > > BTC mining and Africa.

tl;dr

BTC mining remains an arena of emotional dispute. Africa’s adoption of cryptos picks up pace.

Market Snap

Market Wrap

I see that another couple of millions of WLD (Worldcoin) have been issued. There is zero visibility of the issuance timetable, the recipients, the amounts, or any other useful information, apart from the fact that nearly 99% of total supply is yet to enter the market. Holders must surely be in a permanent state of nervousness.

Curious Cryptos’ Commentary – BTC mining and the environment

A somewhat polarised topic of discussion, for which the Milk Road has a fine graphic:

Researchers at MIT have tried to quantify some of the benefits and downsides of BTC mining.

There is no activity that does not consume resources in one form or another. One example is that without oil, bike tyres (useful ones that is) do not exist. This seems to have escaped the attention of the Henriettas and the Tristans (*) who relentlessly campaign on behalf of Just Stop Oil to impose a hair-shirted existence on the rest of us.

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At only 17 pages long, here is the link to the report:

https://ceepr.mit.edu/wp-content/uploads/2023/06/MIT-CEEPR-WP-2023-11.pdf

Go on, then, I know you want me to read it for you. Just ask nicely, is all.

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On the positive side of the ledger:

- In Texas the miners act responsibly in maintaining the LFL (large flexible load).

- Mitigating methane flare emissions, of which some (Republic of Ireland for instance which intends to cull 65,000 cows every year for the next three years) disapprove of especially in the context of ruminants.

- Using the output from unplugged oil and gas wells.

- Driving the adoption of renewable energy by the simple expedient of increasing demand.

- Recycling the heat generated by mining for other purposes.

On the negative side of the ledger:

- The consumption of energy by BTC miners is increasing. I would point out that this is not an uncommon phenomenon experienced by successful industries, but I can see that Henrietta and Tristan have lost interest already.

- The reporting rules and regulations in the US around carbon emissions are opaque and not fit for purpose for any industry.

Before a big argument starts, let’s consider for context that Netflix, video gaming, clothes dryers, and Christmas lights (amongst many other examples) all individually use more energy than BTC.

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(*) The utterly non-diverse nature of whom Jon Snow would have immediately called out, but obviously only in a very different context.

It’s the wilful inconsistency and sheer hypocrisy that gets my goat. Moving on.

Curious Cryptos’ Commentary – Namibia & South Africa

Namibia is the latest country to embrace the crypto revolution with crypto legislation:

http://www.lac.org.na/laws/2023/8143.pdf

In 2017, the central bank of Namibia took a slightly different stance:

"In addition to the bank not recognizing virtual currencies as legal tender in Namibia, it also does not recognize it to be a foreign currency that can be exchanged for local currency. This is because virtual currencies are neither issued nor guaranteed by a central bank nor backed by any commodity."

At the time many African countries were “encouraged” by the IMF to “ban” cryptos, fearful as it was of losing its long-held position of influence. Now the tides are turning.

This new law is aimed at regulating centralised crypto currency exchanges which certainly gets the CCC seal of approval.

In South Africa, the financial regulator has announced that all crypto exchanges must be licensed by the end of 2023. It has been reported that 20 applications have been made so far.

With crypto adoption in Africa much lower than in the UK and the US, it is disappointing that we are falling so far behind in building a crypto friendly environment.