Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!

[moinsdewatt]

Iceland, its volcanoes, its geysers ... and its bitcoins

Romandie AFP / 25 March 2018

In the heart of the Icelandic lava fields, stands one of the largest bitcoin factories in the world. Hightech workshop that produces virtual gold, the site is ultra-secure and its precise location is kept secret to avoid greed.

Thanks to its basements soaked in hot water which provide abundant electricity at a good price, Iceland has become a haven for "miners" of cryptocurrencies like bitcoin, issued by servers as powerful as energy intensive.

Unlike the dollar or the euro, bitcoin is not issued by central banks but "mined", or created in computer "farms".

In the Icelandic volcanic desert, an innocuous-looking silver-tin shed houses machinery, nearly four other buildings to which will soon be added two brand new warehouses. This "farm" of the company Genesis Mining bears the dubious name of the first cipher machine, Enigma, used by the Nazis during the Second World War.

Inside the hangar, tens of thousands of "mining rigs" line up over 400 m2, creating a dizzying hum similar to that of a jumbo jet taking off.

A "mining rig" is a kind of central unit equipped with a motherboard, a RAM memory, a hard disk, a processor and six graphics cards.

His role? Execute complex algorithms allowing to record a succession of authenticated and encrypted transactions. This technology called "blockchain" is often described as the digital equivalent of an account book that would be tamper-proof and tamper-proof. In total, 12,5 bitcoins are created every 10 minutes in mining farms.


Computer CPUs running complex algorithms to record a series of authenticated and encrypted transactions in a bitcoin factory, near Reykjavik on 16 March 2018 / © AFP / Archives / Halldor KOLBEINS

- Polar wind -

"Anyone can do this at home, without any (legal) hindrance or technical limitation," explains Philip Salter, Genesis Mining representative in Iceland. Were it not for the colossal investment, the costs of production and maintenance on an industrial scale - the only one capable of creating a bitcoin economy worthy of the name -, specifies the young German engineer of 25 years.

Because the machines, connected to the sector, turn 7 days on 7 and 24h / 24.

Of the approximately 17 million bitcoins in circulation in the world, a still modest part is "made in Iceland" but the small island in the North Atlantic intends to gain strength and recover the benefits of the war launched by the Chinese authorities against this. virual currency.

Iceland offers world-unique conditions for the production of cryptocurrencies, because of its inexpensive geothermal energy and 100% renewable.

The kWh excluding taxes (0,065 euro) is on average half as much as in the European Union (0,114 euro), according to Eurostat data for 2016, which makes Iceland one of the most Europe behind Serbia, Macedonia and Bosnia.

And the average annual temperature on the island is about 5 ° C. Which is ideal to avoid overheating, and perfect to mechanically limit the need for energy consumption.

The polar wind is drawn in by a battery of fans, then filtered and mixed with the heat generated by the computers - up to 80 ° C - and keeps the temperature of the mining stations between 5 ° C and 25 ° C.

- Iceland full poster -

Previously Genesis Mining, created end 2013, was installed in Bosnia, its major competitors being in China or the United States.

Like her, many IT "farm" companies are keen on a place in Iceland.

"Demand has grown exponentially, especially in the last three months," says Johann Snorri Sigurbergsson, development manager at electrician HS Orka.

And this despite the volatility of bitcoin, which is currently evolving around the 10.000 dollars after approaching the 20.000 dollars in December and dropped below the 6.000 dollars in early February.

"The price of bitcoin is not a very good indicator of the performance of the mining industry," said Philip Salter, who said he was more concerned about competition in a booming industry.

According to HS Orka estimates, the three largest companies that own data centers and cryptocurrency "farms" should consume more electricity in 2018 than the 350.000 inhabitants of the island.

Demand today is greater than the supply of energy.

Victim of their own success, Icelandic bitcoin "farms" are the target of well-organized thieves. Between December and January, 600 "mining stations" disappeared for a booty estimated at 200 million crowns (1,6 million euros).

https://www.romandie.com/news/ZOOM-/902581.rom

[phil53]

For a currency that was intended to be decentralized and out of the power of a few, it is clear that these are sorts of central banks that are being created.

[ENERC]

On Monero and his cousins, it is not the Icelandic data center, but the manufacturer of mining equipment: Bitmain secretly manufactured specialized chips for mining and it mined for itself without selling its products.

Here is the curve of computing power on crypto currency:

as

asics.png (59.24 Kio) Viewed 3469 times

You see something weird about September 2017? Yeah, it's the graphics cards for Christmas. Of course.

In the truth Bitmain undermined secretly. The community made the decision to change the calculation algorithm to transfer Bitmain and its data centers. Priority calculation on your PC, mobile or graphics card.
The change occurred on April 6. And here is what we see since:

hashrate

xmr.png (50.48 Kio) Accessed 3469 times

The secret data centers of Bitmain held more than 70% of the world computing power !!!

Exit Bitmain and its data centers.

If the community had not reacted, the cryptocurrency would have fallen into the hands of a Chinese industrialist.

Conclusion: the community and its developers must keep control of these currencies and remain vigilant

[moinsdewatt]

Faced with the influx of cryptominers, Quebec does not know which way to dance


AFP / 18 April 2018

Hen with golden eggs or poisoned gift? Its cheap electricity and its freshness have made Quebec a favorite land for cryptominers. But faced with their influx, the authorities of the Belle Province have decided to play caution.

Seen from the outside, the "mine" looks like any warehouse, except that the walls are riddled with small holes, allowing air to pass through to naturally cool the thousands of processors.

It is here, in an ordinary industrial area of ​​Saint-Hyacinthe, one hour from Montreal, that the company Bitfarms launched in November its fourth and largest computer center: 24 h / 24 and 7 days / 7, some 7.000 computers turn around, creating electric heat.

"We have to make sure that the machines are working at full potential", launches the Ivorian engineer Yessoulou Coulibaly, inspecting this decor at the "Matrix". Lined up for tens of meters, the computers are linked by a tangle of cables and project flashing green lights.

"We use our computing power to mine bitcoins" and other cryptocurrencies, summarizes Pierre-Luc Quimper, the owner of the premises. "You can compare it to a traditional mining company that mines its gold and sells it, but 2.0".

This computer scientist created the company Bitfarms last year, after starting to mine at home. Today, this Quebec company claims to be the North American leader in cryptocurrencies and Blockchain, and is listed on the Tel Aviv and New York Stock Exchanges. It has earned 4,9 million US dollars in its first two months of existence, in November-December, already has 27,5 megawatts (MW) - about 19.000 computers - and its president is targeting at least 100 MW by the end 2018.

"A revolution" is underway with the deployment of the Blockchain, the technology behind virtual currencies like bitcoin, says Mr. Quimper, whose ambition is to make Quebec "the Silicon Valley" of the Blockchain .

- Quebec Blue Gold -

In the immediate future, the Canadian province is already seen as a potential Eldorado for the cryptominators of the planet.

Hydro-Quebec, a public monopoly for the production and distribution of electricity, has thus received "hundreds" of requests for new mines over the past six months, its spokesperson Marc-Antoine Pouliot told AFP.

The attraction for Quebec is explained by the fact that here, "electricity is affordable, available and moreover green", thanks to the gigantic dams in the center of the province, he summarizes.

Entrepreneurs of various nationalities, but especially from China and Russia, have submitted enough projects to consume more than 9.000 MW by mining, a quarter of the total production of Hydro-Quebec and the equivalent of the consumption of 83 % of Quebec households.

"This massive volume of requests began last September (with) political intervention in China" to regulate this exploding sector, says Mr. Pouliot. According to estimates, the 2nd largest economy on the planet is home to more than half of the data centers dedicated to Blockchain.

- Moratoriums -

Faced with this frenzy, several Quebec municipalities worried about the possibility of possible power failures imposed in March moratoriums on new cryptocurrency plants.

The first municipality to do this was the small municipality of Bromont, worried that a new virtual mine project plans to consume 30 MW on 36 MW which the city has surplus.

The neighboring township of Brome-Missisquoi quickly imitated it. "Most of the requests from companies that we had in our territory were to set up computer warehouses that would simply do the calculations to do cryptocurrency mining (with) very little job creation", justifies the administrative director of the canton, Robert Desmarais.

The Quebec government and its electricity company then put the new virtual mine projects on hold, the time to take a global approach and measure the impact of this nascent industry on the real economy.

"It is an industry whose future we do not know," notes Marc-Antoine Pouliot. The authorities want "to see how these projects are established durably in Quebec," said the spokesperson for Hydro-Quebec, not ruling out raising electricity rates.

One of the Chinese leaders in the field, Bitmain, confirmed to AFP that he was in talks with the Quebec government, Hydro-Quebec and "other important players" to establish a virtual mine in the region under "winning conditions. winners for everyone, ”according to Nishant Sharma, Bitmain's director of international marketing.

Pierre-Luc Quimper, the president of Bitfarms who already claims 90 employees in Quebec, warns: "If the price of energy is no longer interesting for us, we will have to look elsewhere" in Canada, as in Labrador or Manitoba .

https://www.romandie.com/news/Face-a-l- ... 909786.rom

[Did67]

What world ... What sense ????

To write a moving poem, all you need is a pencil on the back of an invoice. But you need a brain that works and ideas (or talent) ...

And there, we do "nothing" with a riot of energy: "Entrepreneurs of various nationalities, but especially from China and Russia, have submitted enough projects to consume more than 9.000 MW by mining, that is to say a quarter of the total production of Hydro-Quebec and the equivalent of the consumption of 83% of Quebec households. ". And all you need is money, the total lack of ethics (or "meaning") ...

I go out. I leave this nonsense. Maybe I'll get burned - I will not answer. Like all dreamers, I have not understood anything about the genius of this system ... Let me dream in peace.

[Ahmed]

It is precisely the absurdity that makes sense here: the mining of bitcoins symbolizes a stage in which the creation of value no longer feels obliged to hide behind a real, material production, but reveals its true abstract nature and its vocation to endless accumulation, no purpose ...

[Christophe]

It is precisely the absurdity that makes sense here: the mining of bitcoins symbolizes a stage in which value creation no longer feels obliged to hide behind real, material productionbut reveals its true abstract nature and its vocation for endless accumulation and purpose ...

It's been a while with the dematerialized stock exchange and globalization ... Bitcoins are just another step ...

What about Tesla whose market valuation is stronger than that of GM for an infinitely lower turnover?

High finance is no longer correlated with "real" at all, so if "them" can have fun producing "value ex nihilo", why not us, the little ones, via bitcoins?

I do not see what's shocking about that ...

[Ahmed]

Let's not confuse everything! The dematerialized stock exchange is only an administrative procedure which does not change anything in its deep reality. As for the rest, I hardly understand your comment, since the fact that it is, as you say "one more step", corresponds exactly to my feeling.

[Christophe]

I do not confuse anything at all: a market valuation that is 100 times the assets of a company what is it if it is the creation of value ex-nihilo?

With bitcoins yes it is one more step: I am not saying that it is better, but it is not worse than in "conventional high finance" ... and that it can be considered as a continuation of the dematerialization of wealth.

In short it's a shame to hit the bitcoin stout by blinding about conventional finance.

[Did67]

I said I was going out, but I can not help but add this: and if one step less was a first step in the right direction?

[In other words, to justify the ultra-absurdity of cryptocurrencies by the great absurdity of "disconnected" exchanges, themselves based on a form of mining capitalism, in a finite world, is beyond my imagination; or if you want, justify it by the access of the little ones to the idiocy of the rich, I am not - from the verb to follow].

[Or if you want is to justify the cheap coke for everyone on the internet on the grounds that anyway everyone is drinking, that bars serve alcohol and that we find cigarettes in any office. tobacco and so there is no reason that only artists can afford coke - bon, we must take the meaning of the sentence, not the facts; it's been a long time since the market is flooded with coke and is no longer reserved for a cultural elite]