Tag Archives: Cryptocurrency

Advantages Of Using Bitcoin In The Cannabis Sector

In recent years, the situation around cannabis has changed for the better. Marijuana is no longer the topic everyone tends to avoid. Additionally, the number of states where pot is legalized keeps increasing. At first glance, it may seem like there are no clouds over the industry, but is that really how it is? 

The situation is better than a decade or more ago, but it is far from perfect. Pot is still illegal on the federal level. That creates many problems for this fast-growing industry, including the fact banks and other financial service institutions are not willing to take the risk and work with marijuana companies.

Until the Senate approves the cannabis banking bill, the industry requires something to solve the banking needs, and bitcoin offers an alternative to financial service institutions.

Cannabis businesses can’t access traditional financial services  

The whole story around legalization goes in a good direction. But those who work in the industry keep facing many issues, and the biggest one is the inability to access traditional banking services. Banks are not prepared to work with marijuana businesses. It’s the same thing with the card companies that won’t cooperate with the cannabis section until it becomes legal on the federal level.

The result? Businesses cannot deposit their earnings as they are left without banking support. In addition, the dispensaries are very often the robbery targets. Many stores work on a cash-only basis, and criminals are aware of it.  So, owners have to deal with many things alone, including the risk of robbery, even though the industry has outstanding potential and keeps climbing up the ladder of growth.

“A continuing struggle we’ve faced is safe banking. There has never been an efficient, safe way for us to bank because the appropriate laws have not been passed. This is something we are currently working on, and there are safe banking laws being discussed, but as of right now that is a major hurdle in our industry,“ John S Nemeth, the president and the owner of THC Alaska Cannabis & Concentrates told AskGrowers.

Bitcoin as the answer?

Being a cannabis entrepreneur is everything but easy, and all those who work in the industry keep trying to find alternatives to banks. In recent times, one of the options presented as the potential solution, at least until the cannabis banking bill sees the light of the day in terms of Senate approval, is bitcoin.

Many companies and dispensaries started looking into cryptocurrencies. The reason for that is quite apparent. Doing business without the ability to access the services every other industry can, including loans, is quite tricky. Furthermore, you can’t accept card payments either. The entire business is based on cash, and that’s far from perfect.

The advantages of using bitcoin in the cannabis sector

Bitcoin can offer a lot to the cannabis industry, so some dispensaries decided to implement it into their businesses, and many others are considering that option.

Bitcoin allows businesses to extend their customers base – the moment a company implements the cryptocurrency, those using bitcoin will be able to purchase the products with it. Most stories around cryptocurrencies focus on them as investments. But, as many companies now use them as the official payment method, people can spend them, and buying pot products is one of the ways to do so. Fees are lower – some small banks and other financial service institutions are willing to provide their services to cannabis companies, but there is a major downside. Fees are often remarkably high. When it comes to bitcoin, the fees are rather small.   Companies can go international – marijuana companies that are planning to obtain customers from around the world or work overseas can entirely rely on cryptocurrencies and count on quick, easy, and stress-free payments. Safe and secure method – the stigma around bitcoin faded, which allowed many to see all the good things about the payment method, including that it is safe and secure. An interesting fact is that blockchain tech has never been hacked. Transparency is ensured. Setting up bitcoin as the payment method is relatively simple.

Are there any drawbacks?

There are many advantages to using bitcoin, but it’s not a perfect solution. Cryptocurrencies, bitcoin included, are volatile. These currencies did not achieve stability on the market, so they are still considered tricky as they may fluctuate a lot.

That’s not the only major drawback because there is an issue with taxes. The taxing process is not the same as the one for the regular income. It is essential to track all the transactions, but not just that. It is necessary to follow the bitcoin’s value against the US dollar when the transaction is made. The entire process increases the costs, and it takes a lot of time.

Bitcoin is a great option, but safe banking is required as well

Bitcoin comes with its own set of perks and several drawbacks. It's a great option, but it is far from ideal. Using it as a payment option can work, but businesses cannot expect their customers to switch to bitcoin to purchase their products. The purchases with bitcoin are just a tiny part of the income companies make. 

With that said, it's clear that safe banking must find its way to the cannabis industry. After all, it is the industry that keeps on growing, and it deserves to have access to banking services the same as all the other businesses and industries do. Relying on the cash only and running the business that way requires more effort, time, and patience. In the absence of loans, the owners have to fund their businesses themselves. They are left with cash they can't deposit, constantly being the target of robbers.

Everything would change with cannabis federal legality. The banks and other financial service institutions would start cooperating with the cannabis industry. The card companies would offer their services as well.  Everyone in the pot market is impatiently waiting for the cannabis banking bill to pass the Senate so they can feel some relief after years of struggle to run the business without safe banking.

Even with the cannabis banking bill or marijuana federal legality, bitcoin would remain one of many great payment methods customers can use. The popularity of these currencies will rise in the future, so we can expect more people to use them to buy all kinds of services and things, including pot products.

 

Litecoin Spikes 30%, Retreats: A Technical Look

Litecoin (CRYPTO: LTC) saw a large spike of over 30% earlier Monday morning, but has since fallen in the wake of a fake report stating that Walmart Inc. (NYSE:WMT) had partnered with the cryptocurrency and would start accepting payments in Litecoin. Charlie Lee, the creator of Litecoin, as well a spokesperson from Walmart, said the press release in question was fake. 

Litecoin was trading near-flat at $181.89 early Monday evening. 

Related Link: Walmart Confirms No Partnership With Litecoin: What Happened And Why They Had To Shut Down The Rumor

Litecoin Daily Chart Analysis
Litecoin continues to stay above the higher low trendline despite trading red on the day. It continues to form what technical traders call an ascending triangle pattern. The $200 level has been an area Litecoin’s price has been unable to hold above for long. The higher low trendline has been an area where the price has been able to find support and stay above; it may continue to hold in the future. The crypto trades above the 50-day moving average (green), but below the 200-day moving average (blue), indicating the crypto is likely in a period of consolidation. The crypto may find support near the 50-day moving average, while the 200-day moving average could hold as resistance. The Relative Strength Index (RSI) has been moving sideways above the middle line the past few weeks and now sits at 50. This means the buying and selling pressure is equal and the stock is likely not seeing much movement.

ltcdaily9-13-21.png

What’s Next For Litecoin?

Bullish traders are looking to see Litecoin hold above the higher low trendline until it breaks above the $200 resistance level. A break above the $200 level with some consolidation could let Litecoin continue on its bullish run and move upward.

Bearish traders would like to see Litecoin break below the higher low trendline and start to fall lower. Bears are looking to see the price fall below the 50-day moving average for sentiment to turn more bearish, as it also breaks the uptrend. 

Mike Tyson Loves Crypto, But Solana Or Ethereum?

Former professional boxer widely considered one of the greatest heavyweight boxers of all time, Mike Tyson, poured some gasoline on the Ethereum (CRYPTO: ETH) versus Solana (CRYPTO: SOL) debate.

What Happened: In a Thursday tweet, Tyson simply asked his followers “Solana or Ethereum?” — unleashing a battle among the answers to his post over which one is the superior smart contract-enabled blockchain platform.

Ethereum is the leading blockchain when it comes to hosting decentralized finance (DeFi) protocols and non-fungible token (NFT) projects while Solana is a newer but fast-growing contender. In fact, Solana recently became the sixth biggest cryptocurrency based on market cap after having tripled in about three weeks as cryptocurrency experts suggest that major players in the space, such as FTX and Jump, are recognizing its potential.

Solana, just like Ethereum, has its own smaller but booming ecosystem of decentralized applications (DApps) including DeFi protocols and NFT projects. While Ethereum has much stronger network effects on its side, users and developers are increasingly appreciating Solana's transactions costing a fraction of a cent and processing instantly where Ethereum transactions take minutes and cost upwards of $100 when the network is under stress.

Still, Ethereum has another advantage over Solana: it is expected to become deflationary in the future. Following early August's London upgrade, the Ethereum network started burning thousands of coins each day, with estimates suggesting it will become deflationary after a future upgrade to take place sometime in the first quarter of 2023.

Price Action: According to CoinmarketCap data, as of press time Thursday afternoon, Ethereum is about 1.55% down and trading at $3,457.05 while Solana is worth $192.83, down 0.46%.

Photo: Paula R. Lively via Flickr

The Dawn of Stablecoin Era: Unleashing The Power Of Stablecoins In DeFi

By Katia Shabanova
Challenging and volatile times often result in the emergence of better foundations – more stable and durable. Although the world is slow to adapt to changes, in the emerging all-digital realm, fiat money is becoming a thing of the past — such as a relic of the oil and gas era.   

Modern banking is often a painful experience riddled with hassle and inefficiencies. Interaction with money should not feel like an uphill struggle but an autonomous and straightforward experience that makes financial freedom accessible to all.

The technological advancement in the finance area is undergoing a significant reshaping. During the last few years, the overall capitalization of stablecoins skyrocketed. However, the cryptocurrency realm is still regarded as a Wild West, full of traps for new investors interested in making quick profits. Decentralized Finance and stablecoins: the two emerging trends are now combining into a game-changing equation that will benefit tech-savvy users.

Spearheading the digital finance environment 

Fiat money is not only inconvenient in the world where most people are used to rapid tech innovations. The latest study suggests that 70% of the United States population carries a credit card, with 34% having three or more cards. Debit cards remain the preferred method of payment. At the same time, new cash vs. credit card spending statistics shows that people tend to spend way more when paying with a credit card. Most people use credit cards for convenience and security.

From paper money – to digital, we need to take another leap forward in the global mentality to realize that fiat money is an inflationary asset. Storing dollars in bank deposits over a long period makes no sense at all since you will lose all their value. Going this way is the kiss of death to your dreams of accumulating substantial gains by retirement.

Interest rates on bank deposits are decreasing, and it is not uncommon to see negative returns in European countries. SWIFT is no longer the best way to transfer funds between countries. A story is known to everyone: opening an account, providing documents, and waiting for a day or more of the transfer are all non-effective for the hectic modern rhythm of life. Keeping money in banks has become unsafe – banks go bankrupt and have their licenses revoked. Millions of people lost their funds forever, and this trend unfortunately will continue.

Stagnating bank deposit interest rates push users of traditional banking products into the DeFi realm.

 

However, deposits are now receiving a second life with the advent of DeFi. Users can receive income that significantly exceeds the % on bank deposits and inflation because of Liquidity Providing and Lending. In the crypto world, all one needs to do is create a blockchain wallet, set it up and after a few clicks, the money transfer will be completed within some minutes. No one will have any additional questions about your transaction, no extra hassle will be involved. You are the one responsible for managing your wealth. Moreover, it is much safer to store money in wallets with private keys that only you have access to — you become the actual owner of your funds.

The gateway to the new era of finance

We see that the trend will continue. The increase in the capitalization of stablecoins by more than ten times over the next five years is hardly an overestimation. This can happen at the expense of banking service users who become disillusioned with banks. The second decisive factor will be offshore companies, as the flow of billions of dollars from the legal entities to stablecoins in the next few years is inevitable. The third vital factor that affects this forecast is that it helps you understand that more than 20% of the world’s population still does not have access to typical banking services! Cryptocurrency is the only gateway into the world of finance. Mobile phone usage is going extremely fast in major and third-world countries and areas where such services are hard to get. Convenience and accessibility are driving this adoption.

The U.S. mobile payment market experienced a tremendous increase of 41% from $69.8 billion in 2018 to $98.8 billion in 2019, according to eMarketer. American shoppers are increasingly using mobile payments as customers become more comfortable with the technology.

Finally, the explosive growth of Decentralize Finance platforms has created an option to capitalize on stable cryptocurrencies. The DeFi sector has been on a sharp rise in 2020-21. The TVL (Total Value Locked) of all cryptocurrencies skyrocketed from 1 to almost 90 billion dollars! Despite unsavory predictions of previous years, Decentralized Finance protocols are now eclipsing some centralized exchanges in terms of volumes and growth rates. Estimates indicate that by 2025, assets held on DEXes will amount to almost half of the entire crypto market capitalization! 

Considering that users will tend to interact with stablecoins more often, the need for an alternative to deposits is becoming more evident. Old-fashioned banking will sooner or later be vanquished by the independent and corporate-free competition, taken down by the desire of individuals to have more control over their wealth — numerous DeFi protocols engaged in competitors’ race.

Stepping into the No Middle Man’s Land

We stand at the intersection of two perspectives in market direction. The role of stablecoins in cryptocurrency will rise further, and more opportunities to capitalize on assets without the risk of losing your principal in a killing offer one can’t refuse. Decentralized Finance, despite the hype, is in its infancy at the moment. We’ll surely see another few leaps in progress over the following years that will take us to the unbelievably exciting era of financial freedom and income.

Green Energy: Sustainable Future For Bitcoin Mining | Opinion

In the previous article on bitcoin mining, we already discussed many aspects of energy consumption by the industry. We also compared the usage with other sectors and energy consumers from around the globe based on the most recent data.

This article will focus on the future of energy usage in crypto mining and how it can contribute to the global transition toward sustainable energy usage. 

What Are Green Energy And Renewable Energy? 

The terms Green energy and Renewable energy are often used interchangeably despite having some technical differences.

Green energy is a part of renewable energy originating from sources that have the highest environment-friendly potentials. 

The following illustration by the U.S. Environmental Protection Agency shows green energy as a subset of renewable energy sources.

                          Source: U.S. Environmental Protection Agency

Advantages Of Green Or Renewable Energy From Bitcoin Miners’ Perspective
The most significant advantage of green energy is its practically unlimited availability. The global supply of fossil fuels is likely to end by 2060, according to Octopus Energy estimations. However, green sources such as wind, solar, geothermal, or hydropower will continue to be there for as long as the earth sustains. As bitcoin mining is expected to continue until 2140, miners must rely on energy sources that are sustainable for such a long time according to its protocol.  Green energy’s other huge benefit is that it saves the environment. The most significant criticism regarding bitcoin mining is the environmental concerns. It stirred around the world when Elon Musk declared to stop accepting bitcoin payments for Tesla cars citing the harmful effects of the environmental degradation caused by the mining operations. CO2e or carbon dioxide equivalent, which is carbon dioxide emission for generating per kWh of electricity, is an excellent indicator to compare the environmental impact of different energy sources.  The following illustration shows that natural gas emits 250 to 1000 grams of CO2 for producing 1 kWh of electricity. In contrast, the CO2e for wind energy is only around 9-18 grams through its lifecycle.                                Source: Union of Concerned Scientists

So the bitcoin mining industry may quickly capitalize on this factor as it will propel a significant positive vibe.

Tesla CEO Elon Musk mentioned that Tesla might accept bitcoin payments again if the industry demonstrates more than 50% energy usage from environment-friendly sources. 

Stability of price is another positive thing about green energy consumption that favors mining sustainability in financial terms.

As renewable energy resources are not limited in supply, it is not susceptible to sudden price swings.

More interestingly, with a continuously increasing global production output and more adoption across industries, the price of natural energy sources has been declining steadily over time.

As a result, the entire renewable energy industry has achieved more efficiency, higher production capacity, and economies of scale over time. The following graph demonstrates how the production costs for energy sources such as solar photovoltaics (PV), concentrating solar power (CSP), and wind energy have fallen from 2010 to 2021.                                          Source: Energypost Europe

Additionally, the installation cost has also been falling over time. According to IRENA, with the investment of USD 1 million in 2010, it was possible to set up a PV electricity plant with a capacity of 213 kW.

However, the same amount of investment can now set up a plant of 1,005 kW, thanks to the increasing efficiency and technological upgrades. 

This characteristic can be highly beneficial for the bitcoin mining industry for being economically sustainable and attractive for investors.

Bitcoin’s Current Scenario Of Sustainable Energy Usage 

A new committee known as Bitcoin Mining Council was formed in May 2021 to promote and report sustainable energy usage by bitcoin members.

One of the council’s objectives is to regularly publish energy usage statistics by the global bitcoin mining sector. 

According to a recent report, bitcoin miners have already been using 56% of their total electricity through sustainable or renewable sources.

For the members of the council, the usage is even better, 67.6%.

The following illustration compares the energy mix used by bitcoin miners with different countries and regions of the world. 

 

                                         Source: Bitcoin Mining Council

Promisingly, the mix has been improving very rapidly in recent months.

It is more evident from the following chart that shows that in the first quarter of 2021, the combination was 36.8% that increased by 52.2% to reach an impressive 56% within the next quarter.

It shows the sincere intention of the bitcoin miners to transit toward more and more sustainable power sources. 

 

           Source: Bitcoin Mining Council

Green Technology With Higher Efficiency: The Future Of Bitcoin Mining

Bitcoin works on PoW (Proof-of-Work) chain, whereas there is a gradual shift toward adopting a more energy-efficient PoS (Proof-of-Stake) method in recent years.

Ethererum 2.0, for instance, is in the process of shifting toward PoS from PoW. However, the whitepaper of bitcoin suggests that bitcoin will remain PoW-based through the foreseeable future.

However, some recent technological advancements regarding data center management could help improve the efficiency of bitcoin mining.

Will It Be Economically Feasible For Bitcoin Miners? 

According to Digiconomist, as of 2021, the total annual income for bitcoin miners is approximately USD 9,874,580,767, which is the total value of mining rewards.

So the mining industry has to pay around USD 6,755,868,299 for electricity.

A fixed rate of 5 cents per kWh is an assumed electricity price. So the calculation shows that a miner has to spend 68.42% of his total income to buy electricity for mining.  
The figures indicate that if the miners want to achieve higher efficiency in production cost, the key is to find electricity at a lower price.

And as mentioned above, with a steadily declining cost of renewable energy globally, it can be an excellent opportunity for miners.

According to IRENA, 56% of the green energy added in 2019 offers electricity at a lower cost compared to the coal-based power plants that came into operation at the same time. 

Sustainable Mining Operation And Its Effect On Global Energy Economy

Square, a financial services group, led by Twitter CEO Jack Dorsey, announced a project in December 2020 known as Bitcoin Clean Energy Initiative (BCEI).

With a fund of USD 10 million, the project aimed to support companies who would contribute to the bitcoin mining ecosystem’s green energy usage.

BCEI published a white paper in April 2021 highlighting the excellent prospects of the bitcoin mining industry in the future.

Few promising factors are:

Bitcoin mining can act as a complementary technology for sustainable energy management as the mining industry is a unique purchaser of electricity. The uniqueness comes from the highly flexible nature of the sector in terms of payment method, location indifference, and electrical load distribution.  Despite being the least expensive energy sources, solar and wind energy have bottlenecks caused by their inability to supply uninterrupted power. Bitcoin miners can address this issue by consuming surplus electricity when production is abundant on a sunny or windy day. This flexibility in load distribution will reduce the cost even further. 

                             Source: Square Whitepaper

According to the chart above, electricity demands widely vary depending on the time of the day. Combining their energy sources with traditional energy and renewable energy, bitcoin miners can consume this excess electricity during the off-peak hours. At the same time, the mining industry may also supply the excess electricity they could produce from traditional sources to the grid.

Machine learning and artificial intelligence can rapidly improve the thermal efficiency of data centers through intelligent cooling.  Locating data centers in colder environments will help reduce the energy usage for thermal management. Also, the greater availability of renewable energy sources in the area will help mitigate the carbon footprint. Intelligent data centers will help with effortless load shifting during battery shortages by combining renewable and traditional sources.  Sector coupling can also leverage the bitcoin miners through which they will be able to supply the waste hit to the local areas where it is needed. Bitcoin mining can act as a complementary technology for sustainable energy management as the mining industry is a unique purchaser of electricity. The uniqueness comes from the highly flexible nature of the sector in terms of payment method, location indifference, and electrical load distribution. Despite being the least expensive energy sources, solar and wind energy have bottlenecks caused by their inability to supply uninterrupted power. Bitcoin miners can address this issue by consuming surplus electricity when production is abundant on a sunny or windy day. This flexibility in load distribution will reduce the cost even further. Many renewable energy projects are easier to build in rural areas away from the city. However, it is not easy and cost-effective to store and transport the energy back to the cities. As bitcoin miners have no location preference and can set up a mining rig anywhere with a good internet connection, they can be excellent consumers of locally produced electricity. For example, only 7% of the total electricity production in the U.S. comes from hydro sources. But surprisingly, that small percentage contributes to 62% of the mining energy used for hashing facilities, according to the University of Cambridge. Therefore, it is evident from the discussion, recent progress, and decarbonization that the bitcoin mining industry has the full potential to rely 100% on green and sustainable sources of energy. So the mining industry is not acting as a roadblock here. Instead, it is propelling the global renewable energy economy significantly.