Dutch Bank Flustered Over the Amount of Electricity Bitcoin Consumes

Dutch bank ING is flustered over the fact bitcoin consumes so much energy. Recently, the bank released a report saying bitcoin transactions consume as much electricity as a house does in a month. They seem to believe this is problematic, since traditional electronic payment methods do not use near as much energy, according to the bank. They went on to say fiat cash will still be how people get paid and pay taxes.

An ING senior economist, Teunis Brosens, explained why power usage is so high. “By making sure that verifying transactions is a costly business, the integrity of the network can be preserved as long as benevolent nodes control a majority of computing power.”

The economist then went on to compare bitcoin energy consumption to his household appliances. A Business Insider article captured his thoughts:

This number needs some context. 200 kWh is enough to run over 200 washing cycles. In fact, it’s enough to run my entire home over four weeks, which consumes about 45 kWh per week costing €39 of electricity (at current Dutch consumer prices).

Trusted Third Parties Equals Less Energy Consumption

The ING banker went on to mention that bitcoin’s energy usage model stands in “stark contrast” with legacy financial systems’ energy consumption. He said bitcoin consumes an “exponentially larger” amount of energy. The banker made it seem as if Bitcoin were going to drain all the world of electricity if people do not continue to use the old, “trusted” payment gateways.

The Business Insider article provided the banker’s quote: “Bitcoin’s energy costs stand in stark contrast to payment systems that have the luxury of working with, trusted counterparties. E.g. Visa takes about 0.01kWh (10Wh) per transaction which is 20,000 times less energy.”

Fiat Money is Here to Stay, Say the Bankers

The ING banker concluded by saying that fiat money is here to stay. People will still continue getting their salaries paid in fiat, and they will continue paying tax in fiat. The banker seemed to imply that innovation was unnecessary and legacy financial systems were here to stay, because government and central banks said so. It will be interesting to see what people think about the energy consumption of bitcoin compared to legacy system electricity usage.

Do you agree with the bankers? Does bitcoin power consumption cause a problem? Should people rely on centralized, trusted third parties since energy consumption is so high? Let us know in the comments section below.

At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

Source : News Bitcoin

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Stay Vigilant When Looking at ICOs

Recently, I was encouraged to write an article going over some of the ways to stay safe while buying, selling, and owning cryptocurrencies. This seems especially relevant in the current climate in which numerous ICOs are out there vying for new investor money. While we have written on topics like this before, it is important to both educate newcomers and remind veterans.

Stay Vigilant — Only You Can Protect Your Coins

Ultimately, the onus of staying safe in any market — crypto or traditional — rests solely on the investor. That being said, here are some of the things I look for when determining the validity of an investment opportunity.

Check Out Its Whitepaper

This should be a pretty obvious one for anyone who has even heard of ICOs. While most projects have them — and if they don’t, be very suspicious — not all whitepapers are the same. Just because a project has one does not mean that it was 1) well thought out or 2) even aligned with the goals of the project.

I realize these can be a little long sometimes, but it is imperative that investors understand what they are putting their money into. Take the time, do your homework, read the whitepaper, and be able to explain it well to someone else before ever considering throwing any amount of money at it.

Check out its Website and Social Accounts

Another obvious aspect to explore is the quality and security of the ICO’s website. It doesn’t need to have the most amazing design or user experience, but make sure the team has put in the work and that they have SSL certification or some other form of security certificate on their site. While design and security do not guarantee the project’s validity, they can be a good way to gauge its overall seriousness.

Most projects should have some sort of a social media or community manager keeping their various web presences healthy. Check those out, pose some questions, or just interact with them. This could be another way of determining how serious the project is.

Check out who (if anyone) Supports it

I say this with an important caveat: not all endorsements mean much and not all projects without endorsements are worthless — with Bitcoin being an obvious example of the latter. However, if you see big names in the blockchain space supporting something, it may give it more clout than support from Paris Hilton or someone else not affiliated with the space.

For The Love of Whatever You Hold Dear, Check Out if its Code has Been Audited

Remember the DAO?  Of course you do; we all do. Auditing helps avoid future DAO-like fiascos, but cannot guarantee success. ICO projects should be audited multiple times by well-respected security researchers. If you don’t know the names of the researchers, look them up, and check them out. Who a project chooses for its audits speaks volumes about how much they respect their own project.

These are just a few of the things that I do before making a decision on how legitimate a given project is; it is not an exhaustive list. Remember: This is not investment or trading advice; you should always conduct your own independent research.

Source : TheMerkle

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Former Bitmain Chip Designer Seeks to Revoke Mining Giant's Patent

Bitcoin's most controversial mining firm, Bitmain, is under threat of having a key chip patent revoked.

Forcing a review of the patent is an ex-employee of the China-based mining giant: former director of design Yang Zuoxing, who has now founded a rival mining firm called Bitewei.

According to documents reviewed and confirmed, the State Intellectual Property Office of China (SIPO) is proceeding with a review that could determine if Bitmain can protect its current market dominance under the shield of the patent claim.

Based on SIPO's data, Bitmain filed a patent application for "Serial power supply circuit, virtual digital coin mining machine and computer server" in July 2015, which was authorized on March 30, 2016.

According to the document, the technology provides higher efficiency for cryptocurrency mining chips, reducing electricity consumption and cost. The feature is said to significantly extend the life of miners, potentially resulting in far higher returns from mining activities.

With its patent-backed products, Bitmain is now a dominant force in bitcoin mining. Apart from supplying chips to individual miners and mining pools, Bitmain also runs the mining pool Antpool, which accounts for 20.3 percent of the global bitcoin hash power.

Tit-for-tat battle

Yet, based on the patent law in China, any organization or individual that disagrees with a certain patent authorization can file an application to revoke it, if they provide evidence for their claim. In his review application, Yang claimed that the serial power supply circuit has long been in use and is widely and publicly documented.

While the authority does not specify a timeline when a decision will be made, Yang expects to hear from SIPO in about three months.

He told CoinDesk:

"If [SIPO] stand by the previous decision, we may need to appeal and file more applications to revoke with different evidence."

Yet, Yang did not bring up the procedure voluntarily, he indicated. Instead, it is a countermove made in response to a lawsuit filed by Bitmain against him, claiming patent infringement.

A graduate of Tsinghua University with a doctorate in Engineering Physics, Yang's career has focused on chip design, with over a decade working for several hardware companies in China, and authoring over 20 patents authorized by SIPO.

From 2015 to 2016, he served as Bitmain's director of design, during which time the Bitmain patent was filed and authorized. While his name was not among the group of patent inventors, Yang said that he designed the AntMiner S7 and S9, the two popular bitcoin mining chips manufactured and supplied by Bitmain.

After his departure from the firm, Yang started his own company Bitewei, based in Shenzhen, which manufactures the Whatsminer and also uses the serial power supply circuit to lower electricity consumption.

Bitmain subsequently sued Bitewei for infringing its patent right. According to Yang, Bitmain initially asked for ¥26 billion ($3.8 billion), but later changed the claim to ¥2.6 million ($380,000) as per the court's requirement.

When contacted, Bitmain did not respond to inquiries for comments on the lawsuit or the application for revoking its patent.

Source: Coindesk

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Bernanke at Ripple Event: Blockchain Has 'Obvious' Benefits in Payments

Former Federal Reserve chairman Ben Bernanke is bullish on blockchain.

Speaking at Ripple's Swell conference in Toronto today, being held the same week and in the same city as Sibos, the annual gathering hosted by Ripple's rival Swift, Bernanke told a room of several hundred attendees that he believes payments can be slow and expensive as designed using existing tools today.

Bernanke, who led the U.S. central bank during the 2008 financial crisis, outlined the complicated process it would take for a bank in Germany to send a payment to a bank in the U.S., before saying:

"It's an obvious area where new technologies like blockchain or these electronic currencies can be used to improve the process."

Bernanke, now a distinguished fellow in residence at the Brookings Institute, called out Ripple by name, saying that he's read about the company's work and thinks that any effort in payments to reduce cost, improve accuracy, speed and reliability and "bring the global economy closer together" is a good thing.

While the conversation mostly focused on monetary policy, Bernanke was asked to comment more on cryptocurrency and blockchain during the question-and-answer session, and his responses should come as no surprise as he gave bitcoin both muted praise and criticism as far back as 2015.

Echoing those past statements, Bernanke said, "bitcoin is meant to be an attempt to replace fiat currencies and evade government regulation and government intervention."

And that attempt, he contends, won't succeed because governments won't allow it. "When bitcoin becomes a threat they'll take whatever action" deemed necessary to quash it, he said.

Unlike bitcoin, which works against regulators, he continued, blockchain businesses that collaborate with governments will likely see more momentum in terms of innovating on the payments system. Central banks around the world (including in Singapore, theU.K. and Europe) have taken more of an interest in blockchain technology recently, trying to figure out how it might create efficiencies within their systems.

Case in point: earlier this month, senior vice president at the Federal Reserve Bank of Boston Jim Cunha said blockchain and other fintech startups would be pushing incumbent financial institutions and middlemen to be more innovative in their approach.

When asked if bitcoin, other cryptocurrencies and blockchain might affect monetary policy, Bernanke said he doesn't see that happening.

Bernanke said:

"It could be a lack of imagination, but I don't think monetary policy has changed that much. [Central banks] are supportive of these new technologies because they'll improve the payment system ... but it won't affect the ability of the Fed to require a certain amount of reserves of affect interest rates."

Source: Coindesk

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