Iran is in the middle of a bit of an economic crisis right now. Due to hiccups caused by the sanctions that were imposed by the United States government a while back, the government of Iran has had its hands full with merely keeping its economy afloat. Due to this, it would appear that the citizens are taking matters into their own hands. Having started using cryptocurrency for transactions with the rest of the world, they have now turned to Bitcoin mining as a means of making ends meet, according to a report on the Atlantic Council.

The U.S. imposed sanctions affected the Iranian economy in more ways than one. Perhaps the biggest negative that came out among other effects of the sanctions saw Iran-based commercial banks kicked out of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network. A direct implication of this move is the exclusion of the Iranian Central Bank from the rest the world, making it impossible for retail banks to process transactions or conduct any form of business with financial institutions in other countries.

Since the sanctions were imposed, Iranians abroad have been somewhat stranded. As a means of ensuring that they are still able to transact and earn a living, a lot of Iranians have turned to cryptocurrency mining.

The sustainability of this new strategy has also been called into question, considering the dire state of the crypto market right now. The bear market has affected crypto markets all over the world, with the slump in prices making it less profitable to mine cryptos.

Energy Subsidies Credited for Profitable Iranian Mining

Despite the bear market, Iranians have found a way to mine digital assets and make some income out of it.

A perfect example is the story of Ali Hosseini and Pedram Ghesemi. The cousins bought an Antminer S9, a crypto mining rig, for $526 some months back, at a time when Bitcoin went for $6,500.  This month saw the price crash to as low as $3,200, but it has recovered a bit to $3,758.58, at press time.

The cousins claim that they pay very low for electricity in Iran to power their crypto mining, so they are still able to stay afloat. This is thanks to the large subsidies for energy in Iran; a fact that has directly been responsible for a massive influx of crypto miners to Iran.

Despite the absence of any form of a regulatory framework, cryptocurrency mining remains legal in Iran. Following the enforcement of the U.S. sanctions, finding outside liquidity for crypto trading could become difficult for Iranian investors, as large crypto exchange Binance warned Iranian investors to withdraw their funds from the platform, as it seeks to comply with the sanctions from Washington.

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Skattestyrelsen (SKAT), the Danish tax agency, has accelerated crackdown against a large number of nationals who secretly traded bitcoin on a Finnish crypto exchange.

According to information shared by the Swedish Tax Agency, a total of 2,700 Danes purchased circa $5.80 million worth of bitcoins from the exchange but sold them back for $6.1 million in local currency. That marks approximately $12 million worth of bitcoin trading that went unreported between the financial years of 2015 and 2017.

Karin Bergen, the directorate at SKAT, confirmed that they are reviewing the figures as of now and will go after every individual that ignored to mention their offshore bitcoin trades.

“If you have traded with bitcoins on the specific Finnish bitcoin exchange and have not specified any winnings, then you can hear from us so we can get your taxes in place,” she warned.

Tip of the Iceberg

Local media reports indicate that Danish tax inspectors and IT specialists are carefully studying the gains and losses made by bitcoin traders. It finds that while some traders invested inadequately in the crypto space with amount lesser than 10,000 Kroner, a notable number among all also purchased and sold cryptocurrencies for amounts exceeding 1 million Kroner.

“There are two types of trades,” explained Ole B. Sørensen, chairman of the personal data department of SKAT. “One is what I want to call a curious trade, which is about a few thousand dollars. And then there are those who have been trading for some enormous amounts.”

Reports also indicate that SKAT has already contacted the big whales involved in institutional-level bitcoin trading activity. The tax agency also plans to go after more such individuals in the coming months.

“It’s probably just the tip of the iceberg,” said Bergen. “Although the Finnish company is a relatively small bitcoin exchange, the information they have revealed is a precious source, which clearly shows trends and patterns in the area.”

Bitcoin is like Paintings

Danish nationals who have traded bitcoin over the years are now caught in a legal gray zone which, in the utmost consequence, may inadvertently put them in line with the law.

Payam Samarghandi, a lawyer and bitcoin expert from Denmark, confirmed that bitcoin is a taxable asset in the country.  According to the 1903 Tax Act, the Danish tax agency imposes charges when a property is purchased and sold again for profits. An expensive painting or vase, for instance, resembles how bitcoin taxation functions under the jurisdiction of SKAT.

“It’s a little bit like Kählervasen, a vase whose value increased five years after the first purchase,” Samarghandi explained. “At the time of purchase, the owner didn’t need to pay any tax on it. But when he sold it for at a significantly increased rate, then the profits he made became taxable.”

But again, a painting or a vase cannot be transferred online as a payment. SKAT realizes that it would be a difficult task for them to categorize bitcoin holders into those who speculate on the digital currency and those who utilize it.

Louise Schack Elholm, who is also a member of the Tax Council, said that there might be instances where bitcoin and other virtual currencies get purchased for purposes other than speculation.

“But,” she added, “it will be in sporadic cases.”

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On Dec. 3 Bitcoin’s mining difficulty experienced its second largest drop in its history after a -15 percent adjustment. This is according to data that was provided by BTC.com, a major Chinese mining pool.

It follows the steady fall in the price of the top cryptocurrency that seems to have accelerated since Nov. 14. So, far Bitcoin has lost over a third of its price since Bitcoin Cash contentious hard fork took place.

Crypto Winter Has Seen Bitcoin Lose Value Leading To The Drop-In Mining Difficulty

The hashing difficulty of the top crypto coin is adjusted after every two weeks. This ensures it maintains the regular 10 minute block confirmation time. So far, it has gone through two adjustments since the ‘crypto winter’ began in mid-November.

The period has also coincided with the Bitcoin Cash hard fork that has seen the crypto market lose a substantial amount of value.

According to available data by coinmarketcap.com, Bitcoin’s most significant drop in difficulty occurred on October 31, 2011. It experienced an adjustment of -18 percent.

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There was another adjustment in mid-October 2011 where the difficulty level underwent another -13 percent change. That figure is now the third largest decrease.

All the three decreases have been recorded during the bear markets. The recent drop comes amid a meltdown of the entire crypto market which financial experts have attributed to the hash rate war in the BCH camp, regulatory pressure and the terrible condition of the global markets.

Recently, the CEO of F2Pool, one of the leading Bitcoin mining pools, Mao Shixing, revealed that more than 600,000 – 800,000 bitcoin miners had shut down. It’s the result of market panic and coin devaluation.

In September Mao revealed that the break-even point for Bitcoin miners was between $3,891 and $11, 581 depending on the model and make of the equipment being used. At the time, BTC was trading at $6,400.

The recent drop in the price of Bitcoin has seen miners in China reportedly close shop and sell their machine by weight as opposed to price per unit.

But mostly the devices being sold are older models including Avalon A741, Antiminer S7 and Antiminer T9 according to a recent post by F2Pool. These machines have proved unprofitable.

This post is credited to usethebitcoin

On November 27, 2018, the U.S. Patent and Trademark Office accepted a patent submitted in 2016 by the tech giant Intel Corporation for a new energy efficient, high-performance bitcoin mining system capable of outpacing the current model.

Energy Efficient Mining

The patent submission was filed June 29, 2016, and was entitled “Optimized SHA-256 datapath for energy-efficient high-performance Bitcoin mining.” In the original document, the leading computer processor company outlined a proposal focusing on a system to perform Bitcoin mining using specifically designed energy-efficient hardware accelerators.

The patent presents the following introduction:

“A processing system includes a processor to construct an input message comprising a plurality of padding bits and a hardware accelerator, communicatively coupled to the processor, comprising a first plurality of circuits to perform a stage-1 secure hash algorithm (SHA) hash based on the input message, wherein the hardware accelerator comprises a first data path coupled between a first reference node and a first input node of the first plurality of circuits to feed a first padding bit of the plurality of padding bits to the first input node.”

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Mining is the essential piece for all cryptocurrencies as it verifies digital currency transactions by solving complex mathematical problems using hardware. Miners are then rewarded with digital coins as compensation for their contribution to the network.

Initially, and in accordance to the main idea proposed by Satoshi Nakamoto, mining could be done with a regular computer through CPU or GPU mining, but once application-specific integrated circuits (ASICs) hit the market, mining with a computer was no longer feasible. ASICs were used to speed up benefits, but in turn, this hardware requires large amounts of energy.

Solving Industry-Wide Concerns

With the proposal presented, Intel hopes to revert this by claiming to be capable of introducing “a processing system comprising: a processor to construct an input message comprising a nonce and a plurality of padding bits; and a hardware accelerator, communicatively coupled to the processor.”

The article filled for the patent shows that hardwiring parameters eliminates the need for recursive rounds of computations of these parameters and reduces the overall circuit area and power consumption by about 15 percent. Apart from enhancing the hardware and software capabilities the patent also proposes that the final hardware chip would be smaller than the ones currently used. The patent reads:

“Dedicated Bitcoin mining ASICs are used to implement multiple SHA-256 engines that may deliver a performance of thousands of hashes per second while consuming power of greater than 200 W. Embodiments of the present disclosure employ micro-architectural optimizations including selective hardwiring certain parameters in Bitcoin mining computation.”

Now that the patent has been approved, Intel should push forward with this proposal and start researching and developing the hardware chips that would relieve many woes in the crypto mining industry.

This post is credited to btcmanager

One of the chinks in the armor of blockchain technology is its intensive energy consumption. However, a report by Harvard Business Review, published November 27, 2018, sheds light on some of the lesser, and even nil, energy-consuming alternatives that can pave the way for DLT to be the global disruptor as it is often deemed to be.

Aim to Make Digital Currencies Eco-friendly

The potential of blockchain technology has been acknowledged by private entities and governments the world over. While there do exist, staunch critics of the technology, the majority of the populace cannot deny the malleability of the blockchain which makes it an ideal fit for some industries.

However, one of the major sore points of technology is the amount of energy it consumes. A recent report posited that emission from bitcoin mining could alone push global warming over 2 degrees.

Further, another report opined that DLT used more power in 2017 than 159 individual nations, including Nigeria, Ireland, and Uruguay. This severe issue could, in turn, pose a massive threat to the Paris climate-change accord.

Thankfully, environmental concerns posed by bitcoin mining can be tackled provided companies take steps to cut the increasing energy costs.

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Solar Energy Powered Mining

One of the better starting points to overcome the climate threat posed by mining cryptocurrencies is using renewable, eco-friendly energy. The report published by HBR states that solar energy could be a sustainable option for crypto mining activities.

If enough incentives are offered to mining companies to adopt solar energy, the looming threat can be largely mitigated. For instance, Iceland based Genesis Mining uses 100 percent renewable energy to mine bitcoin and ether on the cloud.

Moreover, if required, penalties and fines could be imposed on companies that do not switch to eco-friendly mining shortly.

Switch from PoW to PoS

Satoshi Nakamoto’s vision of bitcoin uses the proof-of-work protocol, in which some computers compete among themselves to solve complex math problems to produce a “proof” of validating transaction on the blockchain. In return, the winning system is rewarded with bitcoin.

However, due to rising concerns over the economic and ecological sustainability of mining cryptocurrencies, many newer blockchains have switched to a more eco-friendly proof-of-stake system, which removes the element of competition among the validating systems.

One of the huge upsides of the PoS system is its energy efficiency as it allows each participating machine or “validator” to work on one problem at a time, instead of a horde of miners competing to solve a single problem (in PoW)

Thus, it does away with expensive, energy-intensive mining machines which have been subject to much criticism in recent times.

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Cyber criminals seem to have reached a new low, as they have targeted the site of one of the most popular children’s foundations in the world and infected it with crypto mining malware.

In a published report this week, researchers from security firm Trustwave reported that a CoinImp crypto mining script was injected into the Make-A-Wish Foundation website and that this script used the computing the power of visitor’s to mine cryptocurrencies for the hackers.

The Make-A-Wish Foundation site was built on Drupal, a popular open-source content management system. Earlier this year, Drupal announced that there had been a vulnerability in their software that allowed hackers to inject malicious code into specific sites that had not incorporated their security patch. Just this spring, the Drupalgeddon 2 bug, a Remote Code Execution (RCE) vulnerability in older versions of Drupal, affected over 100,000 sites.

Trustwave researchers believe the Make-A-Wish Foundation website might have been compromised through the same vulnerability. The foundation subsequently identified and removed the malicious script in question.

Cryptojacking, which involves the use of malicious code to force other computer users to mine cryptocurrencies without their knowledge, has become a near-epidemic for internet users.

Earlier this year, a Citrix report revealed that a cryptojacking malware had hit at least 59% of UK companies at some point.

In India, cryptojacking is a menace, with over 300,000 routers in Brazil and India found to have been injected with crypto mining malware. The Economic Times (ET) revealed in September that Indian government websites had not been spared from this phenomenon, stating that widely trusted Indian portals had been exploited by the cryptojacking menace.

According to a security researcher quoted by ET, government websites were targeted due to the high number of online visitors and the trust these visitors have when they visit them.

“Earlier, we saw a lot of government websites getting defaced (hacked). Now, injecting cryptojackers is more fashionable as the hacker can make money.”

Internet security provider McAfee Labs weighed in on the epidemic last week, warning users of a new cryptojacking malware called “WebCobra,” which it said can operate without a trace on a victim’s computer.

The researchers went on to state:

“As the malware increases power consumption, the machine slows down, leaving the owner with a headache and an unwelcome bill.”

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Cryptocurrency mining operations in the Chinese provinces of Xinjiang and Guizhou were suspended so the government could conduct “very strict” tax inspections and real-name registration checks.

Power to the mining farms was shut off on November 5, sources told local daily Cong News. As a result, the mines lost about 1 million yuan (or roughly $143,700) a day during the period of “rectification.”

“Joint enforcement actions examined the mine’s tax information, funds, and customer information,” Cong News reported. “It is understood that the tax inspection of the mine is very strict.”

Mining Farms Required To Sign Pledge

The tax inspection is now complete, but it’s unclear if power to the mining farms has been restored yet.

“It is understood that the mines, including business licenses, state-of-the-art power supply procedures, and employee Social Security, are officially complete,” Cong News noted.

The mining farms were required to sign an agreement promising that their mining data centers will implement “higher standards for the company’s business real-name system,” as mandated by China’s Public Security Department.

The farms also agreed to not provide services to any customers that do not comply with these rules.

Did the Shutdown Affect Bitmain?

It’s unclear how this shutdown affected Bitmain, which recently deployed 90,000 S9 Antminer rigs to the coal-rich region of Xinjiang ahead of the Bitcoin Cash hard fork, which is scheduled for November 15.

Bitmain — the world’s most valuable cryptocurrency company — is making moves to maintain its market dominance amid reports that its smaller rival Bitfury is considering an initial public offering in Amsterdam or London as early as 2019.

The move would make Bitfury the first major crypto IPO listed in Europe, as CCN has reported. The Amsterdam-based blockchain startup could seek a valuation of $3 billion to $5 billion.

In September 2018, Bitmain filed for an initial public offering in Hong Kong, with a potential valuation of up to $3 billion. Bitmain — which is valued at $10 billion — is on track to post $10 billion in revenue by the end of 2018.

$700 Million Bitcoin Mining Farm Being Built

Meanwhile, crypto mining firm Coinmint plans to invest up to $700 million to build the world’s largest bitcoin mining center in Upstate New York, with a 435-megawatt capacity.

Coinmint has already invested $50 million so far to convert a 1,300-acre Alcoa aluminum smelting plant in Massena, New York.

The new crypto mining farm is projected to create an estimated 150 new jobs, and is expected to be fully operational by June 2019.

The old Alcoa plant shuttered in 2014, but Coinmint signed a 10-year lease on the property, signaling its confidence that despite bitcoin’s recent slump, it believes cryptocurrencies are here to stay.

“As long as bitcoin networks exist, we anticipate mining to be profitable,” said Coinmint CTO Prieur Leary.

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The cryptocurrency mining industry gets a lot of attention lately. Its perceived energy usage remains a topic of substantial debate. Icelandic farmers may have come up with a viable and sustainable solution in this regard. Several initiatives show how this business can be accommodated without any side effects.


A Different Take on Cryptocurrency Mining

The reports condemning cryptocurrency mining and its electricity use are growing in number. A lot of experts have different views on this business model and how it affects communities and even cities. In Iceland, several Bitcoin mining firms are in operation today. All of them rely on the country’s abundance of renewable energy. At the same time, even that approach may not be entirely sustainable.

To counter this problem, local farmers have come up with a new solution. Especially smaller operations can benefit from this approach in its current form. One small cryptocurrency mining operator pays neighboring farmers for their excess geothermal energy. Moreover, she installs the mining hardware to use excess power for other uses, such as heating. The conditions in Iceland are unique, as they allow for such business models to thrive.

The excess geothermal energy can be converted to electricity. With this electricity, her mining units can heat up stables and other storage spaces remaining empty otherwise. It is a business model which creates a win-win situation for all parties involved. For the mining operator, it removes any concerns regarding the scaling of her operation at her own farm. A very unorthodox business model which seems to work out quite well so far.

Scaling the Model Beyond Small Farms

This particular business model can be lucrative under the right conditions. However, it is not necessarily a concept which can be taken to the next level with ease. There are plenty of farms with geothermal energy across Iceland, but not every owner will approve the idea of having a cryptocurrency mining operation generate heat on their premises.

Convincing farmers is still an issue, even for this small mining operation. Installing strange and noisy machines in their barns is a very alien concept. A lot of people are still unfamiliar with cryptocurrency mining despite its popularity growing significantly. At the same time, those who take advantage of the opportunity appear to be happy with the business deal. How long this “peaceful” situation remains in place, is unclear.

Ventures like these show cryptocurrency mining is an evolving industry. Rather than disrupting power grids, enthusiasts and companies are looking for more sustainable solutions. Conditions in Iceland are unique in this regard, which allows for out-of-the-box thinking. Solving cryptocurrency’s ecological “problems” will not happen overnight. Even so, it is not the most harmful mining industry in the world today.

Do you think that this solution can be scaled to work for larger crypto mining operations? Let us know in the comments below.

This post is credited to livebitcoinnews

This week, the grand opening of the largest bitcoin farm in the world was overshadowed by a threat from the city that they would be temporarily shut down in case of a heat wave. BitFury and Hut 8 set up the mining farm in Medicine Hat, Canada with the expectation that they would be welcome in a region that is known as a top energy producer.

Over $100 million has been invested in the giant mining operation, with 56 shipping containers spread over a 4.5 hectare plot. The bitcoin farm consumes roughly the same amount of electricity as the entire Medicine Hat City, which is home to over 60,000 people, generating 20 bitcoins a day in the process.

Despite the heat wave caveat, Medicine Hat mayor Ted Clugston seemed generally welcome to crypto in an interview given at the mining farm on Monday. Clugson admitted that he knows very little about cryptocurrency, but said that he was happy to sell BitFury and Hut 8 electricity. Still, he feels that the industry is nonessential, and will be the first to get cut off in cases of emergency or scarcity.

Andrew Kiguel, CEO of Hut 8 said that people who have lost faith in traditional banking institutions see crypto as an extremely valuable tool. Kiguel stated:

Bitcoin was created during the financial crisis. It has really served a purpose in terms of providing the opportunity for people who don’t necessarily trust their government or their central banks.

Andrew Kiguel

The mayor has received pressure from groups concerned about the amount of energy that the bitcoin farm would use. However, there are many misconceptions behind fears of cryptocurrency representing an environmental danger. For years, well-intentioned but misguided environmental groups like Greenpeace have criticized bitcoin miners for consuming more energy than 159 countries.

Critics argue that cryptocurrency mining operations could make better efforts to use sustainable energy sources, however, proponents of the technology insist the energy consumption is smaller than traditional banking and credit card companies. It has even been calculated that Bitcoin mining uses less electricity annually than seasonal Christmas lights.

As CryptoGlobe recently reported, Bitfury, one of the companies behind the mining farm, revealed a new ASIC chip that they touted as being, “unparalleled in performance and efficiency.”

Cryptocurrency advocates say that the temporary shutdown of even a large bitcoin mining operation such as Medicine Hat would have a minimal impact on the network, because it comprises a very small portion of the global distributed hashrate.

This post is credited to cryptoglobe