Tether’s game plan in El Salvador: Why invest in Volcano Energy?

June 9, 2023 Coin Telegraph

Stablecoin issuer Tether is making a strategic investment in energy production and Bitcoin mining to support El Salvador’s adoption of BTC.

Stablecoin issuer Tether has dipped into its war chest to invest in El Salvador’s $1 billion renewable energy project to help drive Bitcoin (BTC) adoption in the Central American nation.

The Tether (USDT) issuer is one of a handful of companies investing in El Salvador’s renewable power generation project. Volcano Energy is set to generate electricity from solar and wind energy in El Salvador to power future Bitcoin mining operations in the country.

The planned 241-megawatt (MW) renewable energy park is the latest move in El Salvador’s Bitcoin adoption drive after the country made BTC legal tender back in 2021.

Cointelegraph caught up with Tether’s chief technology officer Paolo Ardoino during Money 20/20 in Amsterdam. Ardoino — who is attending the renowned finance and payments convention promoting Bitfinex Pay and the Lightning Network — delved into several topics concerning Tether, Bitfinex and the wider cryptocurrency space.

*Tether chief technology officer Paolo Ardoino and Cointelegraph journalist Gareth Jenkinson at Money 20/20 in Amsterdam. Source: Cointelegraph*

Just two days before the interview, Tether announced it would be investing in Volcano Energy to gain exposure to energy production and leverage the facility to power Bitcoin mining farms in the future.

There is also an ideological element to the move, with Ardoino stressing his belief that El Salvador is blazing a trail for sovereign Bitcoin adoption despite the relatively slow uptake of BTC as a payment option in the country.

Ardoino drew parallels to the European Union adopting the euro as a continental currency in the early 2000s, which required significant resources to change existing financial infrastructure, as well as buy-in from citizens of its 27 member states.

“Given all the powers that they had, it still took five, six years, and yet people were super confused.”

The proliferation of Bitcoin as a payment method in El Salvador has had some teething problems, as explored by Cointelegraph journalist Joe Hall in a recent visit to the country using BTC as a primary means of payment.

Ardoino contends that the path to widespread BTC use and adoption in El Salvador will take time, considering that citizens are not being forced to use the alternative currency in their everyday lives:

“It’s extremely unfair to expect that the whole population will use Bitcoin because, first of all, it’s not forced. Adoption is through private companies and public investments, rather than being taxpayer money.”

Tether’s investment in the country’s energy production program is part of a two-fold strategy. Firstly, investing in energy-producing infrastructure holds its own value, which can then be utilized to power Bitcoin mining operations.

Ardoino also argued against the prevailing narratives around the environmental impact of Bitcoin mining and critiques of the industry for putting a strain on the global energy grid:

“Firstly, the majority of Bitcoin mining is already happening with renewable energy. Secondly, Bitcoin mining is mainly using excess energy anyway, but even more so if we first build the energy production.”

Ardoino said Tether’s investment alongside a group of 12 investors aims to build an energy production facility that companies, factories and households can also tap into. The excess energy from Volcano Energy will be used for BTC mining to help make El Salvador a “unicorn with its own unique story.“

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The average person’s wealth will be ‘completely destroyed by inflation,’ says Arthur Hayes

May 2, 2023 Coin Telegraph

Arthur Hayes

Investing in assets "outside of the traditional financial system” is the only way to preserve one’s wealth, according to the former BitMEX CEO.

The majority of people will have their wealth progressively eaten away by the devaluation of money, according to Arthur Hayes, the co-founder and former CEO of crypto derivatives exchange BitMEX.

According to Hayes, due to the huge amount of public debt accumulated by the world’s largest economies, governments will have no choice but "inflating it away" through money printing.

Thus, the only way to escape the progressive destruction of fiat wealth is by acquiring assets outside the traditional financial system, such as crypto, the purchasing power of which doesn’t fall compared with the cost of energy.

“My whole goal with all of my investing and is to preserve capital so that I can consume the same amount of energy or whatever energy amount that I would like from now and into the future,” Hayes said in an exclusive interview with Cointelegraph.

However, the amount of crypto assets available is relatively small compared with the total amount of debt in the economy, which means that only a few will be able to preserve their capital as the majority see their wealth destroyed.

According to Hayes, the crypto crackdown in the U.S. reflects the government’s attempt to keep the masses within the traditional system by preventing them from fleeing to crypto.

“They want your capital sit there and they'll make it very pleasant, pleasant journey to lose 20, 30, 40, 50, 60% of your purchasing power over a period of time such that the debt load is effectively lowered and the finances are healthier,” he said.

To find out more about Hayes’ investment thesis on crypto, check out our latest interview on our YouTube channel and don't forget to subscribe!

Mineflation: Cost to mine one Bitcoin in the US rises from $5K to $17K in 2023

April 30, 2023 Coin Telegraph

Bitcoin

New Mexico is the cheapest US state to mine Bitcoin in terms of average electricity cost, while Hawaii is the by far the most expensive.

It now costs Bitcoin (BTC) miners at least $17,000 to produce one BTC in the U.S. versus the $5,000-10,000 range a year ago, according to Bitcoin mining data resource Hashrate Index and Luxor.

Bitcoin hashprice has dropped 58% in a year

Unsurprisingly, soaring electricity rates across the U.S. states have contributed to rising Bitcoin mining costs.

Notably, between January 2022 and January 2023, the commercial electricity tariff surged at an average of 10.71% per U.S. state, higher than the average consumer price index surge of 6.4%.

*Average industrial rate rise between January 2022 and 2023. Source: EIA/Hashrate Index/Luxor*

Coupled with Bitcoin's downward performance in 2022, which saw a maximum drawdown from around $48,000 to below $15,000, it is evident that active miners generated consistent losses due to the increase in operational costs and lower returns.

But this changed in Q1 of this year as the miners' hashprice, or the USD price per tera-hash per second per day (TH/s/d), rose 31% thanks to Bitcoin's price recovery toward $30,000.

"Bleak as the new year looked at the outset, the lowest day for hashprice on a USD basis in Q1 was January 1," noted researchers at Hashrate Index, adding:

"It was only up from there as a 70% rise resuscitated Bitcoin’s price over the quarter, and along with it, hashprice."

*Bitcoin hashprice (in the dollar terms). Source: Hashrate Index/Luxor*

Which state is cheapest, most expensive to mine Bitcoin in?

New Mexico emerged as the cheapest and, in turn, more profitable state for Bitcoin miners in Q1 at $16,850 to mint one BTC. On the other hand, Hawaii was the most expensive at around $114,590.

Regionally, the south and the midwestern US states are the most attractive for miners in terms of electricity.

*Power cost to produce 1 BTC across U.S. states. Source: EIA/Hashrate Index/Luxor*

More recently, some U.S. states, including Arkansas, Montana, Missouri, Mississippi, and others, have take concrete steps to protect crypto miners from excessive taxes and regulations. On the other hand, Texas has amended its utilities and tax codes, bolstering restrictions for crypto mining companies.

Energy deflation could boost miners' profitability

Furthermore, the researchers anticipate the Bitcoin mining margins to grow further based on the U.S. Energy Information Association's (EIA) expectations of energy price deflation.

For instance, the agency expects the demand for electricity to drop by 1% in Q2, citing additional generation from renewable sources and cheaper natural gas prices. It further anticipates that natural gas prices will remain below $3 in 2023 from 2022's $6.45 average.

*Forecasts for wholesale electricity prices in the U.S. Source: Hashrate Index/Luxor/EIA*

Bitcoin mining stocks shine

Lower operational costs could help otherwise cash-strapped Bitcoin mining companies survive in 2023. For example, the stock price of Core Scientific, an already bankrupt Bitcoin mining firm, has jumped over 450% YTD.

Similarly, the HI Crypto Mining Stock Index has soared by more than 100% this year , showing a return of investor appetite for mining socks.

*Bitcoin mining stocks performance in 2023. Source: Hashrate Index/Luxor/EIA*

Hashrate Index researchers noted:

"If the bitcoin price was to increase by an additional 40% to reach $42k this year, most mining stocks would rise by more than 50% from today’s level, while the four-to-five biggest gainers would soar by more than 150%."

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin mining and increasing energy bills — Sen. Warren vs. Crypto Twitter

April 18, 2023 Coin Telegraph

bills

“I’ve been ringing the alarm about the risks that Bitcoin poses to our power grids and climate,” said Senator Warren, agreeing with a New York Times article on the matter.

United States Senator Elizabeth Warren blamed the Bitcoin (BTC) mining industry for rising energy prices in American households based on unverified mainstream reporting. However, Crypto Twitter was not ready to let it slide and unanimously decided to clarify the disinformation.

While Senator Warren has prominently spoken against the crypto ecosystem, the latest dig at Bitcoin mining comes based on a New York Times article. The report accuses Bitcoin miners of cashing in on electricity and indirectly forcing the public to pay the price. The narrative fit Warren’s perception of the crypto industry as she stated:

“I’ve been ringing the alarm about the risks that Bitcoin poses to our power grids and climate. U.S. Environmental Protection Agency and Department of Energy should use their authority to require cryptominers to disclose their energy use and emissions.”

To help Warren rethink and make an informed decision, numerous entrepreneurs responded, trying to fix the misconception. Bitcoin podcaster Stephan Livera straight up dismissed the NYT report, stating that the “NYT report is filled with disinformation.”

On the other hand, MicroStrategy founder and chairman Michael Saylor contradicted Warren’s statement. He explained how Bitcoin mining does not contribute to pollution but helps decrease energy bills.

#Bitcoin miners decrease the energy bill for millions of American families and do not create pollution. They are data centers running on excess electricity that would otherwise be wasted, and perform the vital role of powering the most secure computer network in the world.
— Michael Saylor⚡️ (@saylor) April 18, 2023

Others from the Crypto Twitter community sought to tag Tesla CEO and Dogecoin (DOGE) supporter Elon Musk in the conversation, who has been actively trying to eradicate disinformation campaigns on his newly-owned social media platform.

Canadian Broadcasting Corp said they’re “less than 70% government-funded”, so we corrected the label pic.twitter.com/lU1EWf76Zu
— Elon Musk (@elonmusk) April 18, 2023

The New York Times was one of the first news publications to become a victim of Musk’s attack against disinformation and propaganda. Twitter recently stripped the verified blue mark from NYT’s primary account after the organization refused to comply with the subscription requirement. Cointelegraph reported on a method to find out who paid for Twitter Blue verification.

In a recent FOX interview, Musk revealed the development of a ChatGPT rival known as TruthGPT. According to the entrepreneur, TruthGPT is a large language model that will be trained to explore the mysteries of the universe. In his words:

“I’m going to start something which I call TruthGPT, or a maximum truth-seeking AI that tries to understand the nature of the universe.”

In the interview, Musk told Fox anchor Tucker Carlson that ChatGPT “is programmed by left-wing experts, which train the chatbots to lie.”

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