Mining for virtual currencies has become big business, but what happens when the miners set up shop in your town?
There are hundreds of types of cryptocurrencies, and values for some have skyrocketed in the last three years. A single Bitcoin, for example, is now worth more than $7,000, short of its $20,000 price tag just months ago, when it was worth just a few hundred dollars as recently as 2016 – and that’s made the business of creating new cryptocurrency potentially very lucrative.
Coming up with new crypto units involves using computing power on an industrial scale to solve complex algorithms. The process is called “mining”, and it’s supposed to ensure that making new units of cryptocurrency is difficult and limit the supply. But in the last few years, companies have been establishing vast cryptocurrency “mines”, stacking up hundreds of computers under one roof to create the digital currency much faster. These data centres consume massive amounts of real-world electricity.
And recently, a number of mines have been popping in one unlikely country: Iceland.
Amid dozens of warehouses in a seeming wasteland, a nondescript shed houses one of these operations – a cryptocurrency mine. Standing in what was once a car service facility on a US military base near Reykjavik, Arni Jensen from the Borealis Data Center explains how the building has been transformed into a cryptocurrency mine complete with racks of computers and hanging wires.
“These are what’s called graphical processing rigs,” Jensen says. “We take the card inside your computer that makes the screen come alive, and we stack a number of these cards – 10 or 15 – into a frame. What they allow us to do is parallel process, so they can do these algorithms that we are running in parallel.”
So, why Iceland? The computers heat up and need to be kept cool, which can be an expensive task to manage. Lucky for Iceland, it's well equipped to handle this problem. Jensen says there’s no need to install cooling units because of Iceland’s naturally cool climate that regulates the mines’ internal heat from the outside. This means it's not necessary to spend money to cool the computers.
Just the process of running the computers also requires loads of energy. Iceland, however, has an almost limitless supply of energy under its soil. The small country boasts a number of geothermal power plants that use the steam from naturally super-hot geothermal water to power turbines to create huge amounts of cheap energy.
“By the end of this year, data centres in Iceland will use more electricity than all the homes in Iceland combined,” says Johann Sigurbergsson from the geothermal energy company HS Orka.
Verge XVG, the once the privacy coin and now the ‘porn coin’ is possibly most well known for it’s integration with PornHub. As you may know, a few months ago Verge ran a crowd funding campaign which promised to help them secure the ‘biggest partnership deal’ for cryptocurrency adoption. The news of a PornHub partnership didn’t bode well and thus, the value of Verge plummeted.
Even so though, the Verge community remains strong and, despite a few hacks and attacks, as a currency, Verge XVG lives on.
WhatsApp, as owned by Facebook, is an ultra-secure, encrypted messenger service. As present, WhatsApp does only focus on file sharing and instant messaging, however in the future, we can see WhatsApp integrating a money transfer service. Facebook have recently added money transfer into Facebook Messenger, and we know that Facebook have established a ‘blockchain team’ so to speak, so, could a blockchain based transfer protocol be on its way to WhatsApp, possibly so.
Why might Verge get there first?
Well, as mentioned, WhatsApp is an ultra-secure messaging platform which uses end-to-end encryption. One of the selling points of WhatsApp is of course its security and thus, it would only make sense for WhatsApp to integrate a very much decentralised resource into their platform, if they did decide to branch out into blockchain money transfer.
Of course, we aren’t saying this would happen, but, through WhatsApp’s already security conscious vision, it would only make sense for a currency like Verge to be used within this.
Also, Verge has that mainstream appeal, through its ‘hip’ fan base and of course, though its accessible value. Moreover, Verge is pretty easy to buy.
Such a partnership and such an integration would be very beneficial.
WhatsApp has over 1 Billion users, therefore this would not only benefit WhatsApp and users of WhatsApp, it would certainly benefit Verge too, giving a billion people access to a Verge based money transfer system.
Once again, I will reiterate that this is just speculation and not based upon any rumours or reports. This is simply just pointing out that such a partnership would be very advantageous. Either way, if its not Verge XVG, we do expect to see WhatsApp start exploring this sort of technology soon enough.
,that feature had been unavailable in New York.
"That was one of the missing pieces in their puzzle," Nomura Instinet analyst Dan Dolev told CNBC. "They had approval in most states, but New York was by far the biggest one where you couldn't trade bitcoin."
The New York State Department of Financial Services granted Square a virtual currency license, which gives the company access to an "expanding and well-regulated virtual currency market," Superintendent Maria T. Vullo said in a statement.
Square, run by Twitter CEO Jack Dorsey, already holds a money-transmitter license from the department.
Since early 2016, downloads on Square Cash app downloads averaged 128 percent year-over-year growth each month versus Venmo's 74 percent growth, according to Nomura.
The department approval could boost already rapidly-growing downloads, and expand what users can do with the Cash app, Dolev said.
"This announcement gives people another excuse to download the app," he said, adding that it might not move the bottom line right away but "definitely helps from a marketing perspective."
Shares of the company have surged 88 percent this year, and hit a record around $65 Monday, up more than 2 percent on the day.
The fintech company had 7 million active customers on its money-transfer app in December alone, Square said in its recent quarterly letter to shareholders. Many of those customers have been using the Cash app more like a bank account than the company intended, Dorsey said in May.
While that wasn't a goal, Dorsey said Square plans to "lean into" the trend, and has already signaled plans to break into banking.
Square filed for an FDIC license to be an industrial loan company in Utah, American Banker reported in September. The license would allow it to perform some of the same services as banks, including issuing loans without having to rely on a bank to originate them and without having to get licenses in each state.
Square is the ninth firm approved for cryptocurrency trading in New York. The Department of Financial Services has also granted licenses to companies like Coinbase and Circle and has granted charters to Gemini Trust and Paxos, formerly known as itBit Trust.
The so-called BitLicense has been notoriously difficult to get, and New York is considered one of the strictest states when it comes to regulating cryptocurrency firms.
The value of the lost coins (nine different cryptocurrencies in total) is estimated to currently be around $30m.
Coinrail, who says it has only accounted for around 70 per cent of its coins/reserves at this point, is also suspending service and moving all of its stored coins to an offline cold wallet while it investigates the incident.
One of the breached currencies was tokens from Pundi X, a payments company that says it is now working with both Coinrail and South Korean law enforcement to investigate the breach.
"Since the amount of NPXS token is equal to 3 per cent of our current supply, which could potentially affect the interests of all parties, we instigated an emergency security protocol to halt ALL the NPXS transactions at 11:16 am Singapore time (GMT+8) to protect NPXS holders and help Coinrail and Korean law enforcement to investigate the incident," the Pundix team explained.
Fallout from the breach was felt throughout the cryptocurrency sector. While they were not directly involved in the attack, both Ethereum and Bitcoin saw their market values plunge by around 10 per cent following the disclosure of the Coinrail hack.
As of Monday morning according to Coindesk, Bitcoin was down from its Friday price of $7,600 to roughly $6,700, while Ethereum fell from a Friday price of $607 to around $518.
Also on Friday, the Wall Street Journal reported that "several" US cryptocurrency exchanges have been asked to hand over data to an insider trading from the US Commidity Futures Trading Commission. The request is said to be part of a larger DOJ probe into allegations of price manipulation in cryptocurrency trades.
Coinrail Cryptocurrency exchange logo
Hackers have stolen roughly 58 billion yen ($532.60 million) from Tokyo-based cryptocurrency exchange Coincheck, raising questions about security and regulatory protection in the emerging market of digital assets.
The following are some questions and answers about one of the largest heists of cryptocurrencies in the history:
What is NEM?
NEM is a cryptocurrency launched in March 2015 by a team of five developers identifying themselves as Pat, Makoto, Gimre, BloodyRookie and Jaguar. Its acronym stands for New Economy Movement and, like other cryptocurrencies, markets itself as a digital coin outside the control of governments and central banks, which can be used for fast, global transactions.
It is now the tenth largest cryptocurrency, with $9 billion worth of NEMs in circulation, trading at just below $1 per coin.
Many details are still unclear.
Yusuke Otsuka, Coincheck’s chief operating officer, said on Friday that around 523 million NEM coins were sent from a NEM address at Coincheck at around 3 a.m. local time. Over eight hours later, Coincheck noticed an abnormal decrease in the balance.
Coincheck said the NEM coins were stored in a “hot wallet” instead of a “cold wallet.” Company President Koichiro Wada cited technical difficulties and a shortage of staff.
What's a Hot Wallet?
Hot wallets are connected to the internet, therefore vulnerable to hacking. Experts warn that holding large sums in hot wallets is the equivalent of carrying large amounts of cash in person.
Cold wallets, such as Trezor and Ledger Nano S, are devices which can be as small as a USB stick and can be stored offline. Some keep them in a safe.