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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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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Crypto Mining Makes Millions for Gold Mining Maverick

Frank Giustra, a well regarded Canadian mining magnate who created one of the world’s most successful mining companies is now moving his operation digitally to mine Cryptocurrency.

Giustra has backed a Blockchain technology company called Hive Blockchain Technologies, which is among the first publicly traded stocks to provide exposure to crypto mining, and for Giustra, he is seeing huge returns.

Six fold returns

The mining mogul has seen rapid growth since entering the Bitcoin market, backing Hive which was previously known as Leeta Gold Corp.

The decision to dig for data servers has paid off as Hive’s shares have soared about 633 percent, giving it a market value of $443 mln since it took over the listing.

Giustra’s foray into the crypto space has been a successful one as he has help drive Hive to be one of the pioneers in terms of a listed crypto mining company.

Hive paid Hong Kong-based Genesis Mining, builder of the world’s largest Ether mining facility, $9 mln and gave it a 30 percent stake to acquire a new data center in Reykjanes, Iceland.

Major mining operation

Hive’s mandate is to expand into other colder countries, such as Iceland and Sweden, in order to mine different coins and amass an inventory which they hope will appreciate. It is with the help of Giustra that they hope to achieve this.

Giustra helped build the company that would become Goldcorp Inc., then founded film studio Lions Gate Entertainment Corp. He counts Bill Clinton and George Soros among his close connections. Those connections may position him to grasp a nascent corner of finance and navigate Bitcoin’s uncertain regulatory waters.

Still a niche market

Despite the visible success seen from Giustra, companies like Hive are still very much in the minority, and while their pioneering moves are believed to make the market more open and available, there are still those who believed it is niche.

“I suspect the vast majority of accounts aren’t contemplating an investment in virtual currencies right now,” said Jeff Klingelhofer, managing director of Thornburg InvestmentManagement Inc.

Source : Cointelegraph

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Ethereum's Byzantium Hard Fork Is Running Smoothly, Developers Say

While it's still perhaps too early to deem ethereum's Byzantium upgrade a success, developers indicate the software update, is running smoothly so far.

An official release manager for Byzantium, Hudson Johnston, noted that the new software is now stable, and steadily rolling out across the distributed network, a fact he said can be attributed to "the hard work (of) developers, users and miners across the ethereum ecosystem."

But while the impact on ethereum's infrastructure will be substantial, it looks like the network is undergoing an adjustment period. Currently, some blocks are being mined in as little as 1 second, though others are dragging out to nearly a minute – substantially longer than the long-time average of 25 seconds per block.

Further, blocks are filling with relatively high numbers of transactions. That's good news for scalability, as ethereum can, in theory, continue to grow without slowing down the network.

According to the ethereum forktracker, mining on the old blockchain with the older ruleset has ceased. This is also positive news for ethereum, as it means a relatively low chance that a competing currency will be introduced, as happened last summer when a split produced the rival asset, ethereum classic.

That said, according to ethereum developer Afri Schoedon, there's still a chance that someone is mining the old blockchain, but probably at very high cost.

In the days prior to the fork, developers and node operators (such as mining pools) were given some last-minute toil, as faults found in Byzantium software led to continuous re-releases. The issues saw ethereum developers working around the clock to get the corrected software out on time, and node operators working over the weekend to install the updated software.

At press time, a high proportion of nodes are yet to install the Byzantium update, though the figures are slowly changing and an ongoing trickle of nodes is arriving to the hard fork fashionably late.

Although the price per dollar of ether dropped somewhat in the run-up to the fork, prices peaked close to the monthly high of $350 immediately after, according CoinMarketCap. At press time, ether prices have dropped back to $337 – the same level seen immediately prior to the fork.

Source: Coindesk

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Hours to Go: How to Watch Ethereum's Fork as It Happens

With $30 billion on the line, all eyes are likely to be on ethereum tomorrow as it seeks to navigate one of its biggest-ever updates.

Will all software users upgrade to the updated blockchain? Or will a new, competing token be created? That's exactly what the market is watching and waiting to see when etheruem hits block 4,370,000, scheduled to occur tomorrow at around 6:00 UTC at press time.

The first part of a larger, multi-part upgrade, the so-called "Byzantium" code will make the blockchain lighter and faster, paving the way for better decentralized applications (dapps), while also enhancing network privacy.

New features aside, however, ethereum developers are mostly optimistic about the upgrade. Although developers on the most popular clients have had to iron out a pair of bugs in the days leading up to change, there's confidence that the upgrade will be smooth.

New and seasoned investors won't likely want to take others' word for it, however. So, if you're eager to see for yourself, here's how to monitor the update in real time:

Fork countdown

Adding uncertainty to hard forks is their reliance on block numbers as a way to signal upgrades. Simply put, rather than have everyone change their software at a specific time, users rely on the numbered blocks in the blockchain itself as a means of coordinating.

Because of this, no one knows exactly when the hard fork will take place. Yet, that doesn't mean there's no way to keep an eye out.

To track when this block number will be hit, Singapore-based smart contract company CodeTract has released a fork countdown, showing how many blocks remain and roughly, how much time is left until the fork occurs.

By current projections, the hard fork looks like it will execute on early Monday.

Mining hashrate

Once the fork happens, users will want to track how much of the ethereum ecosystem moves over, and how quickly they do so.

This is a key metric to track. As long as miners are mining on the old version of ethereum, it will remain operational (and valuable). If that persists for long enough, it could lead to a split (although ethereum developers think this is unlikely due to specifics in the code).

Developers aren't going in blind either – already, the Byzantium code has undergone testing to give an idea of how the fork would play out. For example, earlier this week, all minerson a test version of the network made the migration, a small (but encouraging) sign of what to expect.

The best way to watch this is on the Ethereum Foundation's website, which will show what percentage of ethereum miners that have moved over to the new blockchain when the fork happens.

Nodes

But, miners are not the only stakeholders in ethereum who need to upgrade; developers, users and companies running nodes, which store a full copy of the ledger, also need to download new software or risk falling behind.

Ether Nodes tracks how many node operators are running clients compatible with Byzantium.

Geth, the most popular ethereum client, released fork-ready software in version 1.7.2. And Parity, the second most popular client, released 1.7.6, which is compatible and fixes some consensus bugs.

Right now, 60 percent of Geth nodes and 27 percent of Parity nodes have upgraded to a hard fork-compatible version. With under a day left before the fork, most node operators still need to upgrade.

Price

Of course, there may be more immediate reasons you're worried about a split.

If money's on the mind, you can always be sure to monitor the price of ether. For that, you can turn to our ethereum price page, which will update in real time as the fork happens.

Source: Coindesk

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Ethereum Developers Find Geth Bug as Hard Fork Nears

The discovery of a denial-of-service (DoS) attack vulnerability led the developers of ethereum's Geth software to release a new version just days before the Byzantium hard fork.

On finding the bug, the team behind ethereum's most popular client published a newsoftware release, yet data from blockchain analytics site Ether Nodes shows a relatively low rate – only 1.9 percent of Geth nodes – of adoption at press time.

With Geth comprising about 75 percent of all ethereum nodes, the vulnerability could leave nodes running the previous Byzantium-compatible release more susceptible to DoS attacks after the hard fork.

Explained by ethereum developer Casey Detrio on Reddit, the vulnerability stems from an oversight in one of the new Byzantium features. The risk is that this bug could be exploited by an attacker who wants to take ethereum nodes offline – a form of attack that the ethereum community has dealt with in the past.

Bug fixes have been coming from other ethereum node software groups ahead of next week's planned fork as well.

Yesterday, the team behind Parity, ethereum's second largest software client, issued a new release of its software (the fourth iteration) that corrected a "consensus bug" – an error which could have caused the network to partition during the hard fork. Currently, less than 20 percent of Parity nodes have updated to the new release, according to Ether Nodes.

Hard forks are hard

The issues unearthed by the tests have been of an unexpected severity, leading some ethereum developers to question their approach to the hard fork release process.

Internal discussions are also underway about the possibility of postponing Byzantium, but this approach also poses risks. This strategy would require all nodes to update their software so that the software change is triggered at a later time – a complicated prospect with such little time before the fork.

Indeed, the Parity team tweeted out that, in their view, the fork should be delayed given the recently discovered issues.

Detrio explained that "updating is not necessarily a quick and easy process for users with extensive infrastructure," such as exchanges or mining pools, and requires ample time to be done correctly.

He added:

"The second concern is that there may be more undiscovered consensus bugs that could be found after the activation block, which would then result in needing to perform emergency client updates."

Source : CoinDesk

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Cryptocurrency Miners Are From Now On Rewarded By Torrent Website

A torrent downloads website has started offering visitors the option to enable a cryptocurrency mining feature and earn incentives for the platform, according to a TorrentFreak report.

The news indicates a possible shift in tactics by torrent websites, after a number of popular services have been found to have installed hidden cryptocurrency mining code that harnesses visitors' computer processing power without seeking permission.

Some, such as The Pirate Bay, have notably failed to inform site visitors that their CPU was being used by the miner, a strategy that led domain supplier Cloudflare to classify the undisclosed process as "malware" and remove the domains of torrent site ProxyBunker for also hosting mining code.

TorrentFreakadded that the unnamed "private tracker," an invite-only torrent site, has not only made this feature optional, but it also incentivizes members to let their CPUs be used for cryptocurrency mining by offering "upload credit" in return.

A resource that members require in order to download content, upload credit must usually either be purchased or generated from – as the name suggests – uploading new content. The new system allows visitors to mine monero and then trade it in for the credits.

The tech news source further cites an increasing number of torrent websites now using more transparent models that allow visitors both a choice in the cryptocurrency mined and a way to track the process.


Source: Coindesk

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Two IT workers in Crimea were fired for mining bitcoins at work

Two IT workers employed by an authority in Crimea were fired late last month after they were reportedly caught mining bitcoins at work.

"RIA Novosti" reports that the two unnamed individuals were employees of the Council of Ministers of Crimea, part of the disputed territory's executive branch. The news service indicates the workers installed mining software on computers owned by the council, though the report didn't state how long the operation had been in place.

Through mining – the energy-intensive process by which new transactions are added to a blockchain – the two were said to have raised only a small amount of bitcoin before being discovered.

Whether the council is pursuing charges against the individuals remains uncertain at this time.

The incident is the latest instance in which an employee used official resources to mine bitcoin – only to get caught and terminated for doing so.

In January, an IT employee for the Federal Reserve board of directors was fined $5,000 and put on probation after using a server to mine bitcoins. Later in July, a New York City employee was disciplined after being caught using a government computer to mine bitcoins.


Source: Coindesk

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