Combining bitcoin mining with legalization of use, even as China outlaws Crypto portends a bold future of change
As previously announced as an intention, Nayib Bukele, President of El Salvador released via twitter news that Bitcoin mining has commenced at a new volcano powered mining operation that is an ongoing project.
Initial mining operations have reportedly netted 0.00599179 bitcoin, or about $269, with the power harnessed from the volcano, proving the viability of the project, if not in itself a spectacular sum.
The system appears to be a geothermal energy generation system, also used for Bitcoin mining in Iceland for years.
This comes on the heels of the legalization of Bitcoin in the country and its official status as a national currency, alongside the US dollar. The move has been controversial, to say the least, and both proponents of Bitcoin and crypto in general, and opponents of the move very vocal in a media battle of sorts.
Even as countries like El Salvador are “pro” Bitcoin, protests and criticism notwithstanding, there is a divide on the issue that is breaking down in a familiar way. China is taking the hardest line against cryptocurrency, banning mining and now all transactions. China is also known for underground activities that do not necessarily adhere to the party line.
Meanwhile it is Communist and for more Communist states, such as Russia, Vietnam that have indicated, through statements or laws, an anti-bitcoin position and they are joined by various others such as Bolivia, Columbia, and Ecuador.
Interestingly this debate is breaking down to those that have the most fragile hold on their own fiat currency based financial systems that are most likely to see cryptocurrencies as a direct threat.
In the US, Jerome Powell , Chairman of the United States Federal Reserve, at a House Financial Services Committee meeting on Thursday, was asked by representative Ted Budd of North Carolina if, as a matter of policy, there was any plan to ban or limit the use of cryptocurrencies like what’s happening in China. His response, somewhat indirect but nevertheless as answer was that there was “no intention to ban them”, referring to cryptocurrencies in general.
However, similarly to the anti-crypto nations mentioned above, there is a plainly perceived threat and various ways to react are in process, such as a “U.S. digital dollar” or Fed dollar which many believe would be a first step toward a new system that would be implemented along with bans on non-government backed crypto or other financial instruments.
Emphasis on price fluctuations of various cryptocurrencies will soon fade, but does that spell the end?
The idea of a combination of Bitcoin’s use as a potential medium of exchange while also affording the possibility of being mined and replenished in a local or national governmental or public has been floated of late and is an interesting alternative to to constant harping on the daily price fluctuations.
In a statement announcing his five million dollar investment in a bitcoin mine that runs on solar power, together with bitcoin technology company Blockstream, Twitter and Square founder Jack Dorsey said:
“We hope to show that a renewable mining facility in the real world is not only possible, but also prove empirically that Bitcoin accelerates the world toward a sustainable future”
and via Square’s twitter account:
“Together, we’ll be creating a public-facing dashboard to serve as a transparent case study for renewable energy and bitcoin mining. As we continue to explore the synergies between the two, we’re excited to share our ongoing learnings and real-world data points.”
This type of exploration of the cumulative benefits of a blockchain decentralized financial system that is powered by a sustainable energy source that produces potential profits to finance its continues existence and expansion is a completely separate and independent vision apart from the speculation obsessed culture that has inadvertently taken over the conversation on Crypto.
A major financial downturn, likely on the horizon, would dampen speculation but could actually help Bitcoin
If a bear market, a crash, a new financial crisis or all of the above were to come to pass, this would without question get rid of the euphoria and manic speculation that surrounds all financial instruments, including and especially cryptocurrencies.
This, could be a welcome outcome in one regard, as the new focus would be on financial benefits of various monetary options. Bitcoin and crypto could very well hold significant value in relation to fiat currencies in a crisis, which is on one level part of the initial concept built into the white paper of Satoshi Nakamoto that launched bitcoin in the first place.
The impending obsolescence of traditional banking and financial transaction systems will no go away if the “price” (measure in fiat dollars) of Bitcoin drops. The many aspects of trade and monetary transactions that are already in flux and in a state of accelerated change will not stop changing. The opposite is more likely true.
Change = opportunity is the oft quoted Chinese saying, and for Bitcoin, crypto and possibly the world financial system this may turn out to be more than a truism, but rather demonstrable fact.