The Great Mining Migration

China's Cryptocurrency Crackdown has been dramatically effective. The total hashrate dropped by over a half from its peak before recovering. As I write it is still down about 15% from the peak.

The latest figures from the Cambridge Bitcoin Energy Consumption Index provide more detail on what happened. In May China was producing 70.9 Exahash/sec and 44% of the total, as against 75% in 2019. In July, it produced none, triggering the collapse in the hash rate.

Source

The gradual recovery happened as the containers of mining rigs reached their destinations, which by August were mostly in the US (42.7 Exahash/sec), Kazakhstan (21.9 Exahash/sec) and Canada (11.5 Exhash/sec).

If the migration continues to favor the US and Canada, which as of August accounted for about 45% of the total, it would bring closer the ability of Western nations to turn off Bitcoin, as outlined in Unstoppable Code?.

Talk At "Blockchain for Business" Conference

I was invited to be on a panel at the University of Arkansas' "Blockchain for Business" conference together with John Ryan and Dan Geer. Below the fold are my introductory remarks.

Cryptocurrency's Carbon Footprint Underestimated

Back in April I wrote Cryptocurrency's Carbon Footprint about the catastrophic carbon emissions of Proof-of-Work cryptocurrencies such as Bitcoin. It now turns out that I didn't know that half of it; the numbers I and everyone else has been using are greatly underestimated. Below the fold, based on my no doubt somewhat inadequate methodology, the real story.

The Looming Fossil Fuel Crash

In 2018's It Isn't About The Technology I wrote about Charlie Stross' concept that corporations are "Slow AIs":

Stross uses the Paperclip Maximizer thought experiment to discuss how the goal of these "slow AIs", which is to maximize profit growth, makes them a threat to humanity. The myth is that these genius tech billionaire CEOs are "in charge", decision makers. But in reality, their decisions are tightly constrained by the logic embedded in their profit growth maximizing "slow AIs".

Below the fold, I apply this insight to the impact of climate change on "the market".

Central Bank Digital Currency

Central bank digital currency: the future starts today, a speech by Benoît Cœuré, Head of the Innovation Hub at the Bank for International Settlements identifies a number of problems that central banks face:

Big techs are expanding their footprint in retail payments. Stablecoins are knocking on the door, seeking regulatory approval. Decentralised finance (DeFi) platforms are challenging traditional financial intermediation. They all come with different regulatory questions, which need fast and consistent answers.

Banks are worried about the implications of CBDCs for customer deposits. Central banks are mindful of these concerns and are working on answers. They see banks as part of future CBDC systems. But make no mistake: global stablecoins, DeFi platforms and big tech firms will challenge banks' models regardless.

Stablecoins may develop as closed ecosystems or "walled gardens", creating fragmentation. With DeFi protocols, any concerns about the assets underlying stablecoins could see contagion spread through a system. And the growing footprint of big techs in finance raises market power and privacy issues, and challenges current regulatory approaches.

Below the fold I discuss the idea of CBDCs

MilliCent

When I retired more than 4 years ago a top-priority task to keep me occupied was cleaning out the garage. It turned out that there were a lot of other things to do, and I never made it to the La-Z-Boy, let alone the mess in the garage.

As this Labor Day long weekend approached Vicky became very insistent that that we at least start actually doing some clearing. Our first target was the many boxes of books, a good portion of which were from the eclectic collection of the late Mark Weiser. In among them we found this 1998 CD, a relic of the early days of the Web when it was generally understood that the Web's business model would be micropayments.

Below the fold I discuss the history of what Paul Krugman would probably call a "zombie idea".

Excess Deaths (Updated)

It is difficult to comprehend how abject a failure the pandemic response in countries such as the US and the UK has been. Fortunately, The Economist has developed a model estimating excess deaths since the start of the pandemic. Unfortunately, it appears to be behind their paywall. So I have taken the liberty of screen-grabbing a few example graphs.

This graph compares the US and Australia. Had the US handled the pandemic as well as Australia (-17 vs. 250 per 100K), about 885,000 more Americans would be alive today. With a GDP per capita about $63.5K/year, this loses the economy about $56B/year.

This graph compares the UK and New Zealand. Had Boris Johnson handled the pandemic as well as Jacinda Arden (-49 vs. 170), about 149,000 more Britons would be alive today. With a GDP per capita about $42K/year, this loses the economy about $6.3B/year.

A graph is worth a thousand words. Below the fold, a little commentary.