Wenatchee, Washington and the bitcoin gold rush – CNBC

By Michelle Caruso-Cabrera and Ritika Shah    January 11, 2018

Why one small Washington town has seen so many bitcoin miners move in

  • Low-cost electricity has brought dozens of bitcoin miners to the small town ofWenatchee, Washington.
  • Cool temperatures also help keep the necessary servers at the right temperature.

A small town three hours east of Seattle is turning into the epicenter of bitcoin mining in the United States.

Wenatchee, Washington is home to a dozen of the largest bitcoin and cryptocurrency miners in the country. And the head of the local power utility, Steve Wright, says another 75 have inquired about coming here since the price of bitcoin surged in December.

“We’ve come from just a few people out there who have been knocking on the door all of a sudden to people who are banging on the door pretty loudly,” Wright said.

Malachi Salcido is one of the area’s earliest miners. He runs 3 mining operations in the area, producing 5 to 7 bitcoins per day.

More at: Wenatchee, Washington and the bitcoin gold rush – CNBC

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Could Proof of Stake Eliminate Bitcoin’s Energy Costs? – CoinCentral

By Colin Harper    December 28, 2017

Bitcoin has an energy problem.  Thanks to the coin’s proof of work distributed consensus algorithm, Bitcoin mining is creating a massive carbon footprint.  Miners use up an estimated 29.05TWh of electricity annually.  That’s 0.13% of the world’s annual energy consumption, which is more than 159 countries including nearly all of Africa.

Coupled with the competitive nature of mining, Bitcoin’s exponential growth is largely to blame for this rampant energy consumption.  Mainstream public attention and a boom in transaction volume has only exacerbated the problem, as the Bitcoin Energy Consumption Index estimates that mining power expenditures increased by 29.98% from October to November.

More at: Could Proof of Stake Eliminate Bitcoin’s Energy Costs? – CoinCentral

Blockchains Use Massive Amounts of Energy—But There’s a Plan to Fix That – MIT Technology Review

Making cryptocurrencies less energy-hungry will mean reengineering how blockchains work. 

By Mike Orcutt    November 16, 2017

It’s a staple of any argument over whether Bitcoin has a long-term future: “Yeah, super-cool that it eliminates the need for a trusted authority when exchanging value. But do you realize how much energy it uses?”

It’s true. Bitcoin guzzles about as much electricity annually as all of Nigeria. Ethereum gulps electrons too, as do most other cryptocurrencies. As bad as that sounds, though, there’s reason to believe a solution may be at hand.

This piece appears in our new twice-weekly newsletter, Chain Letter, which covers the world of blockchain and cryptocurrencies. Sign up here – it’s free!

Before we get to that, though, let’s talk about miners. Blockchains get a lot of love, but they are only shared sets of data. What brings cryptocurrencies like Bitcoin and Ethereum to life is the way all the computers in their networks agree, over and over, that what a blockchain says is true. To do this, they use an algorithm called a consensus mechanism. You’ve probably heard it called “mining.” (See: “What Bitcoin Is, and Why It Matters”)

More at: Blockchains Use Massive Amounts of Energy—But There’s a Plan to Fix That – MIT Technology Review

Consortium of energy companies including BP, Royal Dutch Shell to develop a blockchain-based digital platform – FirstPost Tech

Reuters    November 6, 2017

A consortium including energy companies BP and Royal Dutch Shell will develop a blockchain-based digital platform for energy commodities trading expected to start by end-2018, the group said on 6 November.

The logo of BP is seen at a petrol station in Kloten. Reuters

Other members of the consortium include Norwegian oil firm Statoil, trading houses Gunvor, Koch Supply & Trading, and Mercuria, and banks ABN Amro, ING and Societe Generale. Blockchain technology, which first emerged as the architecture underpinning cryptocurrency bitcoin, uses a shared database that updates itself in real-time and can process and settle transactions in minutes using computer algorithms, with no need for third-party verification.

Mercuria has been a vocal advocate of implementing blockchain technology to significantly cut costs in oil trading. “Ideally, it would help to eliminate any confusion over ownership of a cargo and potentially help to make managing risk more exact if there are accurate timestamps to each part of the trade,” said Edward Bell, commodities analyst at Dubai-based lender Emirates NBD PJSC.

More at: Consortium of energy companies including BP, Royal Dutch Shell to develop a blockchain-based digital platform – FirstPost Tech

BP Tech Chief: Blockchain Could Give Company ‘Competitive Advantage’ – CoinDesk

By Nikhilesh De    October 3, 2017

Gas and energy giant BP believes that the use of blockchain could give it an competitive edge in the market, according to its technology head.

Speaking with The Financial Times, head of technology David Eyton struck an optimistic tone amidst work with fellow energy firms Wien Energie and Eni Trading & Shipping, who together with BP have been testing the tech on an energy trading platform developed by Canadian startup BTL. Following the conclusion of a successful trial earlier this year, the firms involved are said to be looking for more participants as part of a broader commercialization drive.

And while Eyton didn’t say whether BP is gearing up to use blockchain on a production scale, he did point to its ability to help clear transactions – a potential boon for one of the biggest companies of its kind.

“There are uses for blockchain that could give us a competitive advantage,” he told the publication. “Blockchain can be much more efficient in terms of speed and verification of transactions.”

More at: BP Tech Chief: Blockchain Could Give Company ‘Competitive Advantage’ – CoinDesk

Blockchain technology could extend to oil and gas transportation – Houston Business Journal

The oil and gas industry has seen huge advances in the extraction of resources, thanks to cutting edge technologies like fracking. But it hasn’t exactly been a leader when it comes to digital adoption.

That could change, at least when it comes to the blockchain, the distributed ledger technology behind cryptocurrency bitcoin. Though they are slower to adopt the technology than those experimenting with it in finance and tech, some oil and gas industry players are exploring ways the technology could be used for everything from commodities trading to tracking flows coming from oil and gas fields.

More at: Blockchain technology could extend to oil and gas transportation – Houston Business Journal

Blockchain technology – the hype and the hope – Oil & Gas Financial Journal

Technology has the potential to transform business transactions

IMAGINE A CRUDE OIL producer selling its production directly to a refiner without any intermediaries and never knowing who the buyer is. Imagine the most common method of executing commodity derivative agreements is without a bank, exchange, or broker. Imagine a power plant purchasing natural gas without engaging a wholesale gas marketing company. The power plant simply purchases directly from the natural gas producer, but they never know from whom or where it is coming. Imagine the non-existence of wholesale and retail commodity marketing companies.

Imagine a power producer selling power directly to a consumer without an independent system operator, retail marketer, or utility. Imagine a midstream company managing multiple interstate pipeline interests without teams of schedulers. All of the scheduling is handled by a highly streamlined, ultra-efficient system where transactions are recorded on a single, trusted ledger that is shared with all parties to the transaction and which provides real time information and contingencies.

All of these transactions would be recorded as soon as the product changes hands. All of these transactions would be governed by self-enforcing smart contracts providing certainty of funding with automatic payment upon the collection of the appropriate sequence of approvals. No need for intermediaries. No need for Letters of Credit. No delays while documentation is physically transferred and reviewed by multiple parties.

More at: Blockchain technology – the hype and the hope – Oil & Gas Financial Journal