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Bitcoin: Five things you may not know about world’s top crypto

Published: 09:46 15 Jul 2021 EDT

Bitcoin: Five things you may not know about world’s top crypto

As its the first breakout crypto, the Bitcoin story has been extensively told.

Nonetheless, amid much hype and some conjecture certain aspects remain less well understood.

Transparency, really?

From the very beginning the supporters of Bitcoin have been touting its transparency as a powerful feature, claiming that all the transactions are stored digitally in public and that they are next to impossible to alter or hide in future.

But, very few people understand that despite the claims of transparency, the names of the buyers and sellers of Bitcoins are never revealed.

Only wallet IDs are revealed, so actual identities remain secret.

This feature lets them (buyers and cryptocurrencies) buy or sell anything without easily tracing it back to them.

High power consumption

Bitcoin mining is often associated with the requirement of sophisticated equipment which consumes an enormous amount of power.

According to an estimate by researchers at the University of Cambridge, the total power consumed by bitcoin mining globally in July this year, even after falling 50% in May, is equal to the annual consumption of a country of the size of Austria.

SEC asked to craft new legislation

Very few people knew that, following the volatility in the prices of bitcoin, the US Senate’s Subcommittee on Economic Policy recently pressured the head of the Securities and Exchange Commission (SEC) to craft new legislation to regulate cryptocurrency trading in the US.

Massachusetts Senator Elizabeth Warren has written a letter to SEC chair Gary Gensler asking him to answers by July 28 on the watchdog’s authority to protect consumers that invest and trade crypto.

Surging data centre demand after China crackdown

Compute North, which runs data centres hosting bitcoin miners in Texas, Nebraska and South Dakota, is accelerating expansion plans slated for next year to meet an expected rise in business from the large bitcoin miners, who are fleeing China to escape a state crackdown.

Similarly, Moscow-based BitRiver, one of Russia’s largest operators of data centres hosting bitcoin miners, is also ramping up plans to build new facilities while expanding the capacity of existing ones to meet the likely rise in the demand from the miners leaving China.

According to BitRiver’s estimate, the demand for power from its facilities, which can house up to 1.5 million mining machines, can rise to as high as 2.5 gigawatts, dwarfing its current requirement of 125 megawatts from three data centres.

The stigma associated with bitcoin

Despite having all sorts of excitement around bitcoin, there is also a stigma attached to the cryptocurrency, mainly due to the association with a black-market website known as Silk Road, which allegedly facilitated drug dealers to take payment in bitcoin for sales made on the site, leading to a major FBI investigation and the eventual shutdown of the site in 2013.

As per an estimate, digital anonymity combined with sophisticated money-laundering techniques helped Silk Road in generating revenue worth more than 9.5 million bitcoins, which translated to about $1.3 billion in 2013 valuations.

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