Bitcoin Mining

GDA Taps Swedish Hydro, Nodal Converts Landfill Methane

🌐 The scoop: Genesis Digital Assets (GDA) debuts a new mining facility in Sweden, making the most of the Porjus Hydroelectric Power Station's eco-friendly energy. At the same time, Nodal Power locks in $13 million in seed funding to power Bitcoin mining centers utilizing methane from landfills.

🏢 Strategic Location: GDA's mining stronghold in northern Sweden is cleverly positioned close to the Porjus Hydroelectric Power Station, optimizing excess energy consumption. Nodal Power, meanwhile, will be deploying its latest funds to zero in on landfills across the US to convert waste sites into energy hubs.

🔋 Against All Expectations: GDA's newest facility, marking its third Swedish venture, and Nodal Power's latest funding round are yet further evidence that a large portion of the most interesting green tech R&D and emissions reductions are coming from (of all people) Bitcoin mining companies. This comes at a shock to many, since media outlets have for years tried to paint Bitcoin as the greatest polluter of our time.

WHAT WE'RE WATCHING

🙌 Glassnode co-founders Jan Happel and Yann Allemann predict a $37k Bitcoin before the Autumn.

📉 Bitcoin mining difficulty increased by 6.17% despite Bitcoin (BTC) prices dropping 10% last week, marking its sixth-largest uptick in difficulty.

📈 Over 40% of Bitcoin's supply hasn't been touched in more than 3 years, reaching a new record high. Those who've held for the long term persist in amassing and retaining their holdings.

BRICS

BRICS Summit Sees Immense Interest, but Viability Remains to be Seen

In Short: The expansion of the BRICS group, currently comprising Brazil, Russia, India, China, and South Africa, met a snag during the three-day summit in Johannesburg. While BRICS leaders have publicly favored the idea of enlargement, there remain differences in vision with regard to the rate and conditions of expansion.

BRICS Expansion Dynamics: The objective to expand BRICS is rooted in Beijing and Moscow's ambition to position it as a counter to the West. However, internal disparities in economies and foreign policy goals of member countries, paired with their consensus decision-making model, create challenges for quick decision-making. China desires a multipolar world order, while Russia seeks to project its influence. In contrast, both Brazil and India have recently strengthened their ties with Western nations.

The Facts:

• BRICS aims to provide the "Global South" with a larger voice in global affairs.

• Summit host South Africa's foreign minister, Naledi Pandor claimed an agreement on expansion mechanics had been reached.

• India's Prime Minister, Narendra Modi, introduced new criteria for membership, causing a delay.

• Over 40 countries have shown interest in BRICS membership, with 22 making formal admission requests.

Pandor's Words: "We have agreed on the matter of expansion," she said. "We have a document that we've adopted which sets out guidelines and principles, processes for considering countries that wish to become members of BRICS...That's very positive."

Our Analyses:  

The dominance of a single currency as the global medium of exchange comes down to a simple feedback loop:

It is easiest to trade with the most traded currency and so the most traded currency is traded more. 

Put another way:

Globally dominant currencies enjoy a network effect. If you are from Grenada and you want to trade with someone from Finland, you have a problem - the Fin you want to buy from probably doesn’t want your money.

But he probably will take U.S. Dollars and there are lots of U.S. dollars that want to exchange for your East Caribbean dollars (the currency of Grenada).

The task of the BRICS nations is to upend this efficiency by introducing a new international currency to enable dollar-free trade (or choose the Yuan as the global ‘go-to’).

Both of these are unlikely.

Any country opting to use the new currency would be seen as sanction evading due to Russia’s war in Ukraine and a Yuan dominant BRICS currency would put Beijing’s currency control interests at odds with those of the union.

All of this is to say:

If you want your currency to be the global currency of trade, you need it to be open, relatively stable, and widely desired. And nearly none of these apply to BRICS currencies. A BRICS movement may chip away at dollar dominance on the margin, but it’s probably no serious threat to the dollar’s dominance in global trade.

BRICS and Bitcoin: So that brings us to Bitcoin. How should we view this BRICS movement in terms of Bitcoin’s role in the global economy?

Well, first of all, Bitcoin is the most open, borderless currency on the planet. There is a large demand for it in nearly every country.

And…at least lately, it has been very stable, and it only get more stable as time goes on.

Bitcoin is also very difficult to sanction since it is permissionless. With all that said, anything that chips away at dollar dominance creates room at the table for other contenders to come in and compete. So if you ask me, a stronger BRICS alliance is good for Bitcoin, however that turns out.

POLL

Tuesday’s Poll Results

Is Bitcoin mining too centralized in the USA?

Yes - 91%

No - 9%

👍 Yes: “Out of the Chinese frying pan and into the American fire” - Jake

👍 Yes: “It was a welcome change to see more hashing power come stateside, but I would like to see it more dispersed.” - Gary

IN THE LOOP

🪑 On a recent episode of Jack Mallers’ Money Matters Podcast, Dave Portnoy of Barstool Sports stated that “I could see us definitely having Bitcoin on the balance sheet in the future.” Dave apparently tried to get the former CEO of Barstool to do it, but had no luck. Dave has since re-acquired full ownership of the company.

🇨🇳 The Chinese government has sentenced Xiao Yi, a former member of the Jiangxi Provincial Political Consultative Conference Party Group and Vice Chairman, to life in prison for operating illegal Bitcoin mining enterprise worth over $329 million. Keep in mind that the true reason for his prosecution was likely not for Bitcoin mining, but for some other unrelated offense against the party.

Today’s newsletter was written by Colin and edited by Jordan.