Weekly Recap: Bitcoin Miners Trade Off Their Holdings, As Companies Downsize
Bitcoin Miners Pressured to Sell Off Stash
As Bitcoin and cryptocurrency prices continue to slump, Bitcoin miners are beginning to bow out, opting to trade off some of their BTC. A tweet by Bitcoin search engine, Wu Blockchain, confirmed the development on Friday. According to the tweet, the monthly rate of Bitcoin sales had nearly quadrupled, going from 1,115 to 4,411 coins sold within one month.
Expert analysts attribute the sharp spike in sell-offs to high energy costs, higher hash difficulty, and declining Bitcoin prices. These three factors combined appear to be gradually eroding the average miner's profit margin, causing them to trade off their holdings for cash.
Coinbase, Other Crypto Exchanges, Begin Heavy Downsizing
Big corporations are not insulated from the crypto winter either, and several are being forced to lay off employees to cut costs. Among these corporations is Coinbase, which announced the lay-offs of roughly 18% of their workforce on Tuesday. This accounts for about 1,100 individuals.
Acting CEO and founder Brian Armstrong cited poor economic climes as the major reason for the cutbacks. The company will, however, compensate the affected employees with severance packages that include free health insurance and mental health support.
Coinbase is not the only crypto exchange to downsize its workforce in the last month. Winklevoss twins' run Gemini Exchange took a similar decision a few weeks prior, opting to reduce their staff count by 10 percent. Other exchanges and blockchain companies making cutbacks include Crypto.com, BlockFi, and Robinhood.
Panama President Rejects Crypto Bill
Laurentino Cortizo, President of the Central American state Panama has partially vetoed a bill that would have made cryptocurrency legal tender in the country. On Thursday, June 16, President Cortizo turned down the bill, citing money laundering risks.
The head of state's decision has garnered some criticism, with congressman Gabriel Silva publicly voicing his disappointment with the President's veto. According to Silva, rejecting the crypto bill would result in the loss of viable opportunities for the economic expansion of the country.
Despite his veto, President Cortizo has not come out as openly anti-crypto and might sign off on the bill if proper anti-money laundering regulations are implemented.
If the bill is signed, Panama will become the second Latin American country to accept cryptocurrency as legal tender.
Russia Invents New Platform to Bypass SWIFT
Russia is set to roll out a brand new payments system to rival SWIFT, to keep international transactions running.
SWIFT is an international payments platform used to facilitate cross-border transactions. However,
following economic sanctions imposed by the US in February 2022, Russia has been barred from using this system. Placing an embargo on international transactions could potentially cripple the Russian economy, thus, the state has developed an alternative.
Dubbed CELLS, the platform was invented by the Novosibirsk Institute of Software Systems. The platform will allow Russia to make payments in its native currency, Rouble. It will also allow other countries to make payments in their native currencies, as opposed to the dollar. Finally, as an advantage over SWIFT, users will be able to create digital wallets and store cryptocurrency.
New York City Mayor Pushes for Governor to Veto Anti-Crypto Bill
Eric Adams, recently elected Mayor of New York City, has pushed for the rejection of a bill that would restrict crypto mining in the state. On Monday, the pro-crypto mayor voiced his concerns about the bill, which would impose a temporary ban on new crypto mining machines. The Mayor stated that he would request that the governor of New York City, Kathy Hochul, veto the bill.
According to Mayor Adams, cryptocurrency is an integral part of the city's economy; putting in more road
blocks would only hinder the state's development.
Whether or not Governor Hochul will sign off on the bill remains to be seen. However, the Governor has previously stated that a cryptocurrency boom could open up more job opportunities in the state.
Bitcoin Not as Energy-Intensive as the Banking Sector, New Research Proves
New studies carried out by an IT specialist Michel Khazzaka show that Bitcoin is roughly 56 times more energy-efficient than the classical banking system. The report was published on Wednesday, June 16.
Khazzaka begins by re-evaluating the current figures for Bitcoin's annual energy consumption rates. The cryptographer finds that the values are grossly overestimated. He calculates the annual Bitcoin energy consumption rate to stand at 88.95 TWh, a far cry from the 122TWh pitched by the CBECI.
Khazzaka and his team then painstakingly compile the energy costs of the traditional banking system over four years when comparing these numbers before concluding that Bitcoin mining is over “a million times” more energy-efficient than traditional banking.
Finally, Khazzaka expects even more favorable numbers for BTC when the Bitcoin Lightning Network is fully integrated. The Lightning Network will allow for a drastic increase in the number of transactions processable per time, without necessarily upping energy intake.
