Ethereum – Memphis Flyer

Crypto Has “Enormous Potential,” Enormous Environmental Impact

Cryptocurrencies have a massive environmental impact and Memphis’ low-cost energy could make it attractive for crypto mining operations – possibly driving up energy costs here.

Powering only the Bitcoin and Ethereum cryptocurrencies last year produced 78.8 million tons of carbon last year, the equivalent of tailpipe emissions from 15.1 million gas-powered cars, according to the U.S. Environmental Protection Agency (EPA). Environmental impacts like these from cryptocurrencies were the centerpiece of a Thursday hearing by the U.S. House Committee on Energy and Commerce.

Committee chairman Frank Pallone (D-New Jersey) said cryptocurrencies bring “enormous promise” and that the committee was not attempting to stifle innovation. Instead, the hearing was to put the environmental impacts out in the open.

“One estimate found that the energy required to process transactions on the Bitcoin network could power a home for more than 70 days,” Pallone said. “Last year, there were hundreds of thousands of transactions on this network. Just imagine the climate implications.”

Most of crypto’s environmental impact — energy consumption, carbon production, and electronic waste — is from crypto mining operations, according to Digiconimist, a website dedicated to tracking unintended consequences of digital trends. Miners are constantly working (largely through trial and error) to prepare a new set of transactions for the blockchain, a shared database that stores information digitally. To find new and valuable transactions, crypto miners employ massive amounts of computer power.

How much power? If Bitcoin was a country, it would rank between Thailand and Vietnam for annual energy usage, according to Digiconomist; and Ethereum energy use matches that of the Netherlands, per the website.

This need for power has some crypto investors looking to set up their mining operations in areas with low-cost energy to maximize profits. QuoteColo, a company that matches companies to an array of services like Bitcoin mining and miner hosting, said Memphis is a good place for a Bitcoin mining operation. For this, it cited the city’s low price of electricity.

Last week, the Tennessee Valley Authority (TVA) claimed Tennessee energy costs are lower than 80 percent of other utilities across the country. Should crypto miners rush to Memphis for low-cost energy, that could increase demand and increase prices. A University of Berkeley Business School study estimated crypto mining operations in upstate New York increased electric bills for small businesses by $165 million and by $79 million for individuals.

Any other crypto-miners here in Memphis? from memphis

Four years ago in the Memphis subreddit, a user asked if others mined crypto here and the conversation went quickly to the cheap cost of electricity. One commenter noted that “university dorms are the best place for crypto mining. All the free electricity your rigs can guzzle down.” Another commenter said the energy prices in Memphis were so low, “it honestly doesn’t even matter where you run it from in this city.”

The crypto mining conversation does not seem to have made any public appearances in Memphis as of yet. No major announcements here from TVA or Memphis Light, Gas and Water. Though, QuoteColo listed some crypto data centers in Memphis, but no information could be immediately found to verify any of them.

However, the topic was top of mind in East Tennessee’s Claiborne County, also a TVA customer, this week. A company called ANKR wants to establish a “controversial” mining center there and the local power utility just signed a $9 million annual contract to supply it electricity. That move came after TVA approval.

The local utility would supply the facility with nearly 20 megawatts of power per month, according to the newspaper, at a cost of about $750,000 each month. The operation is not expected to raise rates in Claiborne County.

In Thursday’s House hearing, BitFury Group CEO Brian Brooks said a crypto mining operation should not be judged on how much energy it uses, but where that energy comes from. Digiconomist said most mining operations are in regions (like China) that rely on coal for power.

Brooks said people must prioritize energy needs based on value. For example, if crypto mining produces more value than gold mining, crypto should be prioritized. Digiconimist data say gold mining takes less energy than Bitcoin mining and produced about $189 billion more value last year.

Photo by Bitcoin BCH

Last month, PayPal announced that its users would be able to buy, sell, and hold four prominent cryptocurrencies – Bitcoin, Ethereum, Bitcoin Cash, and Litecoin – via Paypal.com. Through its website, users will be able to buy and manage their cryptocurrency in one place.

Globally cryptocurrency has quickly been growing in popularity as an alternative form of currency since its inception in 2009. Cryptocurrency, as the name implies, is a digital form of currency that is meant to take the place of, and function as, a real form of currency. Unlike traditional forms of currency, nothing physical exchanges hands, and its value is not backed by a bank in the same way most modern currencies are. Instead, users hold their “currency” in digital wallets and make all their transactions digitally, with the vast majority of cryptocurrency being backed by their communities.

The “currency” in cryptocurrency, usually referred to as tokens, is a unique string of numbers and letters that is tied to the specific cryptocurrency being used. While in a traditional transaction users would exchange money, cryptocurrency users exchange tokens. When users trade tokens, the transaction is sent to a continuously growing list of transactions called a blockchain. The transactions added to the blockchain are then verified by users through a process called mining. Users’ work for mining does not go unrewarded and the “miners” are rewarded in tokens for each successful transaction that they verify.

Buying is as simple as a few button clicks.

Due to the various steps and knowledge needed to jump into the cryptocurrency world crypto had long been pursued by few. As the popularity of cryptocurrency began to grow in early 2018 websites began popping up advertising easy ways to buy and sell crypto but PayPal is one of the largest and most recognizable names to join the cryptocurrency wave.

I tested out PayPal’s new crypto service, throwing in $10 for the opportunity to play around with buying and selling. For someone that has never bought cryptocurrency, the entire process was quick and easy. Within minutes I was the proud owner of $10 worth of Bitcoin and Ethereum.

The Crypto screen gives an accurate representation of the market trends for PayPal crypto partners.

After setting up my account, I was presented with a screen showing my present balance, as well as guides explaining the ins and outs of crypto. For someone less familiar with the technical aspects, the guides were helpful and gave me a better understanding of where my $10 had gone. They also assured me that the prices would rise and fall naturally depending on the current exchange rate of my specific currency.

The move to PayPal has made breaking into the cryptocurrency sphere a reality for the average person. It’s cool and an easy process, and PayPal recommends investing just a dollar to play around with it before making more rash decisions. Though it may not be the most feasible way to diversify your assets, PayPal’s expansion into the crypto market is a great way for the average person to jump into the world of cryptocurrency.