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Why is the community worried about the “Bitcoin Mining Council” established by North American mining companies?

Cryptocurrency

Criticism of the North American Mining Council emerges

Some communities have criticized MicroStrategy and Tesla CEO Elon Musk for agreeing to disclose energy consumption with major crypto asset miners.

It all started on the 24th, when major miners in the North American region, including Tesla CEO Elon Musk and MicroStrategy CEO Michael Sailor, agreed to promote transparency in energy consumption, and said, “Bitcoin mining. The establishment of the “Council” has been revealed.

Mr. Musk, who announced the suspension of Bitcoin payments on the 13th due to concerns about the environmental burden, commented as follows.

Dialogue with North American minors. The vendors have decided to publish a report on current energy consumption and future plans for renewable energy use, and encourage miners around the world to do the same.

It may be a promising move.

The following mining companies in North America participated in the conference.

  • Argo Blockchain
  • BLOCKCAP
  • Core Scientific
  • Galaxy Digital
  • Hive Blockchain
  • Hut 8 Mining
  • Marathon Digital Holdings
  • Riot Blockchain

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On the 13th of this month, Mr. Musk suddenly announced that he would stop using Bitcoin payment, which was just introduced for Tesla’s EV purchase. It caused turmoil in the virtual currency market. He raised concerns about “increasing fossil fuel use” in mining and explained that he would continue to suspend BTC payments until Bitcoin mining “switches to a more sustainable energy source.”

In response to this, experts argue that Bitcoin mining utilizes clean energy at a higher rate than general industries. MicroStrategy CEO Sailor was also opposed to Musk’s tweet.

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What is the reason for concern?

The controversial background of this meeting is related to the fact that questions have arisen about “decentralized networks” in the past.

At the large-scale conference “Consensus” held in 2017, the large-scale blockchain holding company Digital Currency Group (DCG) and others led the announcement of the “Bitcoin Scaling Agreement” over the introduction of SegWit. Many cryptocurrency companies such as Bitmain, Coinbase, Grayscale Investments and F2Pool were on the list.

However, it has been criticized that the situation of expressing support for the proposal for a major upgrade is “contrary to Bitcoin’s decentralized idea.”

In this case, Marty Bent, who works on the virtual currency podcast “Tales from the Crypt”, explained why the series of events, such as the establishment of the “Bitcoin Mining Council”, is negative for Bitcoin.

Lessons from the past

Bent first expressed concern that the crypto market and the minor community were heavily swayed by Musk’s opinion. He criticized Bitcoin Miner for attending a de facto closed-door meeting and criticized the case of the 2017 block size debate as saying, “The lessons of the past have not been put to good use.”

In addition, Bent noted that Musk mentioned that he encourages miners around the world to report similar energy consumption, not just companies that participate in the council. In the future, he expressed a sense of crisis that a miner who used clean energy to mine cryptocurrencies could envision a scenario in which other miners could be put under social (political) pressure.

Bent said that one of the participating companies, Marathon, has already launched a mining pool that complies with the US Treasury’s Office of Foreign Assets Control (OFAC) regulations. There is. “

He also argues that the Bitcoin mining industry uses a higher proportion of renewable energy than the general industry, citing minor electricity statistics from the University of Cambridge.

Ironically, the University of Cambridge statistics criticized the North American Bitcoin Mining Council for “trying to provide unnecessary solutions,” because it uses “minor self-reported data.”

Bent argues that the entire “ESG movement”, not just cryptocurrencies, is nothing more than virtual signaling that appeals to others about their political virtues, although Bitcoin consumes a lot of electricity. It is anti-capitalist to moralize the source of electricity. “

Opinion of an expert

There are many voices from the virtual currency area who are concerned about this move.

“The FUD for Bitcoin mining is daunting,” said Caitlin Long, founder of the US crypto bank Avanti. “Bitcoin has overcome the wave of FUD every time,” he said, and said he could withstand bad rumors in the future.

ttps: //twitter.com/caitlinlong_/status/1397008854626471936? s = 21

What is FUD?

Abbreviation for Fear, Uncertainty, and Doubt. Refers to unfounded bad rumors and speculations that can have a negative impact on market sentiment.

“Bitcoin isn’t the problem, it’s the power grid in the first place,” said Dan McArdle, co-founder of crypto analysis site Messari. He said Bitcoin’s power consumption was not the essence of the problem.

“It’s ridiculous to support the centralization of Bitcoin mining,” said Meltem Demirors, CSO of British crypto investment firm Coinshares.

Peter McCormack, a podcast on cryptocurrencies, commented, “This OFAC block and the FUD on energy recommended by the wealthy Bitcoiner feel a renewed debate about SegWit2x.” The current situation, which seems to be forcing the ego of new holders, including closed-door meetings, is dangerous.

According to @DocumentingBTC, which follows the history of Bitcoin, in 2016, Bitcoin developers refused to attend minor meetings and will not be present until meeting participants sign a “pledge”. There was a case. From this point as well, we can see how the Bitcoin community has adhered to the decentralization and open source culture and nature.

Participants must publicly discuss the proposed changes, incorporating the views of the entire Bitcoin community, as Bitcoin consensus rules are determined based on the software selected by the user. Recognize that you have to.

For these reasons, we do not hold agreements or roundtable meetings.

Jameson Lopp, the founder of cryptocurrency custody company Casa, did not criticize closed-door meetings as a category of freedom of association, but said, “There is no consensus on the entire system and the results of the meeting are forced. If something goes wrong, resentment is natural. “

“It’s not the beginning of OPEC”

Despite this skepticism, Peter Wall, CEO of Argo Blockchain, a mining company that participates in the Bitcoin Mining Council, took the stage at the large conference Consensus. Attempted to dispel doubts about the meeting.

Wall commented that the Bitcoin Mining Council respects Bitcoin’s fungility. “The essence of Bitcoin will not change,” he said, emphasizing that the council’s goal is to disclose information on Bitcoin mining and promote activities that reduce the burden on the environment. Then, he stated as follows.

We love Bitcoin, a decentralized, permissionless system.

… This is not the beginning of OPEC. We want to form voluntary groups of independent and decentralized miners to have a positive impact on each other and the industry.

In addition, he said that the situation such as the burden on the environment surrounding Bitcoin is an international issue, and that he is also promoting a mechanism to promote cooperation at the international level. Clarified that the group is not exclusive.

“At this stage, we haven’t reached any other agreement,” Wall said, explaining that Bitcoin miners hope to address legitimate ESG-related concerns. Information about BTC mined with clean energy should be managed in-house, and information such as BTC mined using fossil fuels should not be tracked, dismissing skeptics’ suspicions.

Nic Carter, who is familiar with the use of energy in cryptocurrency mining, called for a calm response, saying that many of the mining companies participating in the council have already disclosed information on energy use.

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