Monthly Archives: March 2022

Nearly 150 million people use the franc of the Financial Community of Africa (CFA) on a daily basis, from Senegal in the extreme west to Gabon in the center of the continent.

Used in 14 countries, the CFA franc is pegged to the euro, printed in France and its monetary policy is controlled by Western powers. As Fod Diop, a Bitcoin (BTC) Lightning developer hailing from Senegal details, The IMF and the French government still control the currency.

While the official peg to the euro is 1 euro to 655.96 CFA francs, its purchasing power has eroded over time. In 1994, the World Bank devaluedthe CFA franc against the French franc from 1:50 to 1:100. That year, West Africans woke up to realize the value of their life savings had been slashed in half.

Gloire, the founder of Kiveclair, a Bitcoin Beach-inspired refugee project in the Congo, told Cointelegraph that the CFA makes whole countries dependent, and It is usually the poorest who suffer. He explained the situation in 1994:

Prior to the creation of Bitcoin, West Africans could store their money in euros, U.S. dollars or traditional stores of value: real estate and commodities. For everyday people, however, those options are not readily available.

Mama Bitcoin,the first retailer to accept cryptocurrency in Senegal,told Cointelegraph that the CFA is disempowering. She suggests that Bitcoin could provide a way out.

With the arrival of Bitcoin and cryptocurrencies, indeed, there is now a viable alternative. Gloire suggests that Bitcoin can help the countries of the CFA Zone to free themselves from France to finally turn the dark page of colonization.

In Senegal, Mouhammad Dieng, co-founder of SenBlock, a nonprofit organization for crypto promotion and adoption, told Cointelegraph that he doesnt like the CFA, because its monetary policy does not allow us to develop. Bitcoin is a less risky alternative to make the transition to an African digital currency.

Interestingly enough, the hope to replace the CFA is not restricted to grassroots cryptocurrency advocates. Governments of West African countries have been vocal in their efforts to improve the CFA and develop some autonomy.

With the current monetary policy, CFA zone countries are obliged to send more money to France than other countries due to colonial ties there is zero sovereignty over the currency.

A new currency called the ECO was flouted as a replacement for the CFA. However, it would still be pegged to the euro and biased to France. Concerning digital currencies which Dieng mentions the e-Naira, the digital version of neighboring Nigerias currency, has influenced the view of the CFA governments with regard to digital currencies and CBDCs. However, an e-ECO or e-CFA has not yet been planned.

Notwithstanding, the opportunity for a stronger currency in the CFA African territories is vast. The GDP of the CFA region is roughly $170 billion and covers 14 independent countries. Its a huge region with tremendous untapped resources, particularly agriculture and minerals.

Pape Alioune, a software engineer who founded Shintsha, a cryptocurrency exchange that allows payments via mobile money, told Cointelegraph: What country can develop without its own money or, better yet, a neutral money?

The SenegaleseSouth African team behind Shintsha which will soon rebrand to Mole App has created an innovative way of addressing the low banking levels in Africa. The exchange hopes to onboard more and more Africans into Bitcoin and crypto through mobile money, an Africa-centric solution.

Mobile money, originally derived from a Kenyan invention called M-Pesa, allows sim cardholders to pay each other with credit. It is incredibly popular in Subsaharan Africa, from Senegal to Somalia to Malawi. Orange money is one of the most popular outlets, although Free Mobile and Wave also exist.

Alioune estimates that more than 80% of the adult population uses mobile money in Senegal, and its similar in other countries that use the CFA. Africans use the tech the same way Northern Europeans use contactless payments its become a reflex, part of the daily routine.

While there is a sense of optimism in West Africa with regards to the future of cryptocurrency and more routes to purchasing crypto, Education remains the most significant hurdle to overcome. Thats according to Nourou, the founder of Bitcoin Senegal who is on a mission to facilitate Bitcoin adoption in his home country.

For Nourou, given that literacy rates in his home nation are just 50%, he speaks with business owners, entrepreneurs and educated members of the community. Most people in West Africa have at least heard of Bitcoin. Its a question of getting through to the right people and spreading awareness, he told Cointelegraph.

Nourou agrees with Gloire in that its not just about Bitcoin, its absolutely necessary to educate people about money. Gloire adds that while learning about money is key, people must understand that it is possible to decide ones destiny without asking permission.

He brings up the example of smartphones which are penetrating Africa at a good pace, to illustrate that Africa can pick up new technologies and run with them. As much as 46% of the Subsaharan population in Africa has a smartphone and, as evidenced, mobile money is booming.

For Idrissa Seck, a Bitcoin enthusiast and a payment agent at French bank Socit Gnrale, understanding money is the key to unlocking an understanding of Bitcoin. In order to understand and ultimately fall in love with Bitcoin, you have to understand money and the current financial system, he told Cointelegraph.

Dieng repeats, education, education, education, adding that you must spend at least 50 hours learning before investing in crypto.

With regard to the future of Bitcoin and cryptocurrencies in the CFA zone, Gloire takes inspiration from the Salvadorian experience, which is going quite well. The first country to adopt Bitcoin as legal tender, El Salvadors hotly awaited Bitcoin bonds are imminent. For Gloire:

Africa has all the ingredients to make meaningful use of cryptocurrencies, according to Mama Bitcoin. Its on a path to greater freedoms. It comes back to the notion that Bitcoin belongs to everyone.

Nourou of Bitcoin Senegal sums up Bitcoin and Africas relationship best. When asked if the creator of Bitcoin, Satoshi Nakomoto could be an African, he replies:

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We dont like our money: The story of the CFA and Bitcoin in Africa - Cointelegraph

United Kingdom's National Crime Agency (NCA)is aiming to attackBitcoin(CRYPTO: BTC) mixers services that try to anonymize Bitcoin balances by mixing them, which the regulator saidmakes prosecutingcriminalsharder.

UK Regulator Eyes Bitcoin 'Mixing':Darknet Live, a news outlet focusing on deep web black markets,reportedon Tuesday that Gary Cathcard NCA's head of financial investigation said that Bitcoin mixers can be used to provide a layering service, churning criminal cash, obscuring its origins and audit trail, similar to how a cash business might be used by criminals to legitimize cash through the banking system.

The NCA saidregulation "would force mixers to comply with money laundering laws, with an obligation to carry out customer checks and audit trails of currencies passing through the platforms.

Law enforcement needs access to data necessary to investigate what is often serious criminal activity, according to the U.K. regulator.

Mixers could enable Bitcoin to be easily used for laundering funds involved in ransomware attacks, fraud, state-sponsored crimeand terrorism, according to the agency.

The Royal United Services Institute a leading defense and security think tank pointed out that "free and open-source software algorithms in which there is no entity that takes custody of funds cannot be effectively regulated.

A Bitcoin Wallet's Stance: Samourai Wallet a Bitcoin wallet featuring mixing features answered to an inquiry on the matter with an open letterpublishedon Tuesday, explaining that "Europol also highlighted Samourai Wallet as an emerging 'top threat' in 2020 due to its decentralized nature."

Samourai Wallet said that it believesthe "vast majority" of its users are law-abiding and agreed "that the use of centralized mixers that take possession and custody of funds should be scrutinized and avoided."

The company also wrote that "free and open-source software algorithms in which there is no entity that takes custody of funds cannot be effectively regulated. We believe the NCA should instead focus on more productive methods to prevent serious crime and catch criminals." The firm concluded:

"The argument that crypto users identity is obscured on the blockchain so users shouldnt need to worry themselves with basic financial privacy is not only bad advice, it is a feeble attempt to justify an unprecedented encroachment into the financial privacy of law-abiding citizens."

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UK Regulators Take Aim At Bitcoin Mixers: What You Need To Know - Benzinga - Benzinga

(TNS) David Naylors knowledge of cryptocurrency was limited, to say the least, when Bitcoin miners started approaching him last year about buying power from the utility he runs across a 16-county stretch of rural Texas.

I was writing it down, B-i-t-c-o-i-n, said Naylor, chief executive officer of Rayburn Country Electric Cooperative Inc., which provides power to about 229,000 customers mostly small towns and homes north and east of Dallas.

Naylor has had to get up to speed quickly. Hes received multiple proposals to build Bitcoin mines, with rows of electricity-guzzling computers that solve mathematical problems to create digital coins, on whats now ranch land. Two of the mines would each require as much as $20 million to fortify power lines and avert blackouts. Each would consume enough electricity to power as many as 60,000 Texas homes. Utilities like Rayburn have to provide service to miners if its technically feasible to do so, but upgrades to the grid threaten to drive up bills for consumers already shouldering price shocks for almost everything.

These are just challenges weve never faced before, Naylor said in an interview.

Texas utilities may have to figure it out largely on their own, weighing the cost of upgrades against long-term benefits like revenue that can be invested in protecting against outages. It falls to the Electric Reliability Council of Texas, the states grid operator, to evaluate how Bitcoin mining will affect the power system. So far, Ercot hasnt publicly disclosed what it's done, but its members will vote this month on creating a task force to understand how many mines will connect to the grid and how fast. New types of demand come with a number of risks and challenges, and Ercot will continue to coordinate and collaborate with its regulators and stakeholders to successfully integrate crypto loads, the grid operator said in an emailed statement.

Overall, Bitcoin mining cost residents and businesses in upstate New York about $250 million a year in higher annual electricity bills, a 2021 University of California Berkeley study concluded. Mining pushes up monthly electric bills about $8 for individuals, and $12 for small businesses, the researchers estimated.

Industry advocates argue that as Bitcoin mining booms in the state, someone will come along to build more power plants. One year after the deadly winter storm, a record amount of solar capacity is planned for Texas. Plus, miners say their ability to quickly throttle back operations when the grid needs power will actually make the system more stable. Bitcoin mines shouldn't cost consumers much because they seek out more sparsely populated areas with electricity to spare, said Lee Bratcher, president of the Texas Blockchain Council, a lobbying group.

But Rayburn's experience shows that's not always the case. Miners are looking at remote sites, which in some cases will require millions of dollars in grid upgrades, Naylor said.

Utilities across Texas are fielding proposals. American Electric Power Co. is weighing requests from 75 to 100 Bitcoin miners to connect primarily across West Texas and is evaluating the need for upgrades to handle the mines. Golden Spread Electric Cooperative, which serves the Texas Panhandle and Central Plains, is studying inquiries from two dozen miners.

Austin Energy, which powers the state capital, says investors want to build five mines just outside Austin that would need a total of 1,000 megawatts of electricity, equal to about two-thirds of the city's current demand. That may require the utility to build more transmission lines, said Erika Bierschbach, vice president of energy market operations.

The risk is that we dont manage the opportunity very well, Bierschbach said. Austin Energy, Rayburn and Golden are considering whether to require miners to pay higher power rates.

Upgrades to the power system will be needed because the grid cant handle all of this new load, said Evan Caron, a former power trader in Austin who invests in energy technology. New investments in the transmission system are typically shared among Ercots consumers and show up in their utility bills. This year, Ercot expects more than $4.5 billion in transmission charges to be distributed among users from factories to utilities.

Given the crypto industrys notorious volatility, theres also the chance that miners will close up shop, leaving ratepayers to cover the costs of upgrades that may no longer be needed. To mitigate that risk, utilities can ask for a deposit, which would be refunded after the miner uses the power for a certain period of time.

Worldwide, mining consumes an amount equal to twice whats needed to power every light in the U.S., according to the University of Cambridges Bitcoin Electricity Consumption Index.

But in Texas, the payback can be immense because electricity is so cheap, Caron said. Even if Bitcoin prices fell to $30,000 roughly 25% below current levels miners would still make revenue equal to about six times the cost of power, he said.

At Rayburn, CEO Naylor wants to make sure hes not taking undue risks to help deliver those returns. Rayburn had to sell $908 million of bonds in February to cover the bill from Ercot for soaring power prices during last years crisis, and it will take 28 years for customers to repay the debt.

The risks may pay off because crypto miners have pledged to shut down in times of crisis to conserve power, Naylor said. The biggest Bitcoin miner in Texas, Riot Blockchain, did so in February and last year, and others, such as Compute North LLC and Bitdeer Technologies Holding Co., have committed to shutting if needed.

Even with those safeguards in place, Bitcoin mining comes with costs. Its definitely going to have an impact, Naylor said. Its simple supply and demand.

2022 Bloomberg L.P. Distributed by Tribune Content Agency, LLC.

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Bitcoin Mining Threatens to Further Strain Texas Electric Grid - Government Technology

RIDGWAY--Over a dozen residents attended the Ridgway Township Supervisors meeting on Tuesday evening to voice their displease over the Pin Oak Energy Partners site in the township that is being used as a Bitcoin mine. But what exactly is all the noise about? When it comes to Bitcoin, the short answer is that its complicated.

Bitcoin was conceived by a person or group called Satoshi Nakamoto, a pseudonym listed on the original 2008 Bitcoin white paper describing how the cryptocurrency would work. On Jan. 3, 2009, Satoshi mined the first Bitcoin block on a simple personal computer with a standard central processing unit or CPU. In 2010 the first Bitcoin mine was produced that used the power of a Graphics Card or GPU to speed up the task. Then in 2013, the Chinese Company New Cannan began a Bitcoin mine using an application-specific integrated circuit (ASIC) that has now become the industry standard for Bitcoin miners.

Now for the complicated part. Bitcoin mining is the process by which new bitcoins are entered into circulation. It is also how the network confirms new transactions and is a critical component of the blockchain ledger's maintenance and development. "Mining" is performed using sophisticated hardware that solves a computational math problem. The first computer to find the solution or get to the closest answer to the problem receives the next block of bitcoins. The miners are acting as auditors, confirming that each Bitcoin transaction is legitimate and valid, thus guaranteeing the "value" of the Bitcoin.

What is a Bitcoin? It's a 64-Digit Hexadecimal number or Hash in Bitcoin terminology.

0000000000000000046fcc608cf0130b95e27d158463e9f967ac56e4df598bc

The number above has 64 digits and contains not just numbers but letters of the alphabet. The decimal system that is accepted throughout the world uses factors of 100 as its base, which means that every digit of a multi-digit number has 100 possibilities, zero through 99. The decimal system is simplified to base 10, or zero through nine in computing. By using a "Hexadecimal," this math incorporates a base 16 with "hex" and "deca" derived from the Greek words for six and ten. In a hexadecimal system, each digit has 16 possibilities. Our standard numeric system only offers ten ways of representing numbers (zero through nine). The Hexadecimal system has to add letters; specifically, A, B, C, D, E, and F, to represent 11 through 15. Software developers and system designers widely use hexadecimal numbers to provide a human-friendly representation of binary-coded values. Each hexadecimal digit represents four bits or binary digits, also known as a nibble. In other words, the Hash above has 64 digits, with each digit representing 16 possibilities, for each of the four digits in the nibble.

Besides the coins minted via the "genesis block," which was the first block created by the founder Satoshi Nakamoto, every other bitcoin came into being because of miners. Because the rate of bitcoin "mined" is reduced over time, the final bitcoin won't be circulated until around the year 2140.

To earn new bitcoins, the company needs to be the first miner to arrive at the correct answer, or closest solution, to a numeric problem. This process is also known as proof of work (PoW). No really advanced math or computation is involved, despite the belief that miners solve complicated mathematical problems. In a way, that's true, but not because the math itself is complex. The computational power of trying to be the first miner to come up with the 64-digit hexadecimal number, or Hash, is basically guesswork. The answer, or closest number, is how a transaction with Bitcoin is verified and ensures the legitimacy of the cryptocurrency.

In a way, its a matter of randomness, but with the total number of possible guesses for each of these problems numbering in the trillions, it's incredibly tedious work. And the number of possible solutions only increases with each miner that joins the mining network. To solve a problem first, miners need a lot of computing power. To mine successfully, they need to have a high "hash rate," which is measured in terms of gigahashes per second (GH/s) and terahashes per second (TH/s). The enormous amount of electrical power necessary is the primary "cost" of Bitcoin mining, besides the cost of the hardware itself. The Bitcoin miner needs access to large amounts of cheap electrical power to be profitable. This is where energy companies like Pin Oak come into play.

Using the generators at its natural gas drilling platform in Ridgway Township, the Bitcoin miners have access to a dedicated power source at a very reasonable rate since they are directly at the power generating site. The generators at the site are not providing power to the electrical grid in Elk County or even Pennsylvania, but exclusively to the Bitcoin mine. With the entire process being handled remotely over the internet, there is no office building on-site or staff that have to be paid to live in the area. The money that is being produced using Elk County natural gas resources does not enter into the local economy at all, besides the natural gas drilling fees and the initial payment to the owner of the site from Pin Oak. And as neighbors and the Ridgway Record have discovered, it is almost impossible to get in contact with anyone to provide any answers from Pin Oak or the Bitcoin mining company, which is so far undisclosed.

Why is such a complicated system in place at all in rural communities all across the county and the world? Because it is incredibly lucrative. Currently, there are approximately 21 million bitcoins in existence with around 19 million in circulation, for a total that only keeps increasing, of roughly $1.3 Trillion dollars. As of March 2022, the price of Bitcoin was about $39,000 per bitcoin, which means a miner will earn $243,750 (6.25 x 39,000) for completing a block.

With new technology, there is always a certain portion of time that is needed for society, regulations, and the legal systems to adjust to new challenges, and right now, rural communities across the world are having to break new ground to regulate these massive uses of power and resources by people and companies that have almost no presence in the communities they are using as hosts. Time will tell if the Bitcoin mines, which generate enormous amounts of waste heat and greenhouse gases, are relegated to the dustbin of history, in the same way as coal-powered electric plants, or if they can manage to find the balance between profitable operation and acceptance in the rural landscape.

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What exactly is all the noise about with Bitcoin Mining? - Ridgway Record