It is a big irony: a decentralized currency could be muted by a centralized asset called energy. Yes, as Kazakstan protests and Iran stays in the crosshairs of the Vienna meeting, Bitcoin will wobble; both countries mine 25% of total BTC after the great China exit.
This is a black swan on this fledgling currency because if the Nordic follows as planned, this winter for hodlers may be really long! Sure, if truly a “decentralized” currency, you will hope hodlers can mine it from their home power sockets.
The next 6 months could be extremely important for BTC and it has nothing to do with the exchanges and national “bans”, but all to do with nations that provide electricity to mine the stuff. Be on alert!
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China’s crackdown on Bitcoin mining last year, culminating in a full ban in September, unleashed a diaspora of producers seeking new homes. Many flocked to green sources in the Nordic nations, while others tapped coal and natural gas in Kazakhstan, Iran, Kosovo, and tiny Abkhazia; by last fall, more than one-quarter of all of the signature currency’s coins were being minted in Kazakstan and Iran alone.
But in the past few months, those formally welcoming venues have been booting miners en masse. The newcomers are hoarding gigantic volumes of electricity, creating shortfalls that are spreading blackouts from Tehran to Almaty. The trend is especially bad news for enthusiasts who predict that the Bitcoin industry will soon solve its pollution problem by running mainly on renewable energy. In a new twist, Scandinavian nations are claiming that they can’t meet clean energy goals if crypto is hogging such a huge and growing share of their wind, energy, and geothermal resources. (Fortune)
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Comment: Given that people in different countries get their energy from different sources, energy is not centralized. And it is distributed. During the Kazakhstan protests, Bitcoin hashrate made a new high, and has since not dropped as it did in the China ban times not even close. The network learns about weak spots and route around things like that. Even the internet was out too, yet blocks were still broadcast by some miners through eg: blockstream satellites. Oh the price drop may be correlated with the KZ protests not caused by it.
Response: Certainly, Nigeria is not powered from the same source as Iran. And Brazil is not getting energy from the same source as Canada. The concept of “centralized” energy is not defined by the geographical distribution of the global population, rather the total energy received from the national grid per population within a nation (in my understanding)
So, when I said energy was centralized, I was saying that the bulk of commercial and industrial energy sources are not disparate but largely delivered from national grids within the economies. In other words, those sources are not in people’s backyards. That does not mean that Nigeria and Ghana and USA and Canada are getting energy from the same source.
Let me also leave a formal definition of centralized energy from United States EPA: ““Centralized generation” refers to the large-scale generation of electricity at centralized facilities. … The electricity generated by centralized generation is distributed through the electric power grid to multiple end-users.” It is not defined based on global population or national sources of energy at global scale.
I do think that my usage is in order; I will not edit it. Thanks
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