In today’s bitcoin and cryptocurrency news, read about Shanghai, which will renew discussion over whether the mining method that continues to underpin bitcoin, the most commonly traded cryptocurrency, is practical and sustainable. Finally, around $13 million worth of cryptocurrency was stolen in a hack of the South Korean crypto exchange GDAC.

Ethereum’s Shanghai Upgrade Creates a Crypto Rift

Original Source: Ethereum’s Shanghai Update Opens a Rift in Crypto

The Ethereum blockchain, home to the second-most-popular cryptocurrency, ether, will end crypto mining. Some Ethereum bubblers are arranging “watching parties” to celebrate. The Ethereum upgrade, codenamed “Shanghai,” completes “The Merge,” which radically affects transaction verification and network security.

Proof-of-work (PoW) mining requires solving a mathematical challenge to process a batch of transactions and get a coin reward. Miners are more likely to win the race if they use more computational power. Ethereum’s new proof-of-stake (PoS) algorithm determines the winner by lottery rather than race or miners. The more ether someone locks up on the network—or stakes—the more likely they are to win.

Shanghai will revive the debate over whether bitcoin mining, the most commonly traded cryptocurrency, is sustainable by showing that a large-scale blockchain can switch systems. According to the University of Cambridge, the Bitcoin network used 107 terawatt-hours of energy in 2022—equivalent to the Netherlands—with just 25% coming from renewable sources. Before The Merge, Ethereum used two-thirds as much energy as Bitcoin. According to Alex de Vries, data scientist at De Nederlandsche Bank and author of Digiconomist, a crypto emissions data source, mining has decreased by at least 99.84 percent.

“Bitcoin’s Achilles heel is energy consumption,” adds de Vries. “As bitcoin prices rise, electricity usage increases. Hardware and power costs increase as miners generate more money.

Nonetheless, many bitcoiners argue that mining is increasingly fueled by renewable energy. PoS, they believe, is inferior to PoW because it centralizes power and riches in the hands of the affluent without moderating variables like energy prices. Shanghai is a crypto future proxy war.

Bitcoin was initially mined with a PC and basic software. The sector professionalized as bitcoin demand soared. Large, publicly listed mining businesses like Marathon Digital and Riot Blockchain run massive facilities with racks of machinery. Several Texas mines draw 700 Megawatts or more.

Bitcoin proponents argue that focusing at the industry’s absolute energy use loses context. Miners believe they encourage renewable energy growth by filling demand gaps when demand is low.

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Yan Pritzker, creator of Swan Bitcoin, believes bitcoin is forced to low-demand locations because only miners with the cheapest electricity can survive. Wind and solar are unreliable and must be overprovisioned. Bitcoin miners are the last-resort buyers.

Bitcoin miners can boost solar and wind farm profits and speed up the switch to renewable energy by buying energy when the grid doesn’t need it. Miners argue usage numbers like those from the University of Cambridge don’t account for the amount of off-grid energy used to power mine or the 1 percent that run on methane, a byproduct of oil extraction that is vented or burnt away.

Bitcoiners argue that detractors should focus on how the network may increase renewable energy on the grid rather than how much energy it consumes. “Bitcoiners realize that the solution to cut emissions is not to consume less energy, but to create orders of magnitude more low-emissions electricity,” says Chris Bendiksen, bitcoin research head at investment firm CoinShares. PoW mining makes low-emission energy economical in a novel and scaled way.

Bitcoin skeptics argue these reasons are superficial but unconvincing. Northumbria University’s Environmental Sciences assistant professor Pete Howson calls bitcoin mining defensive “magic techniques” that “give the appearance of clean and rewarding investment.”

Howson thinks that flaring methane for bitcoin makes fossil-fuel corporations more profitable, postponing the move to green alternatives. Bitcoin mining has revived fossil-fuel factories in New York and Montana.

Howson claims bitcoin miners are outcompeting recycling facilities in Iceland, which “can’t gain access” to renewable energy. “Sustainable energy waste is impossible,” he argues.

Its wastefulness is at issue.

Pritzker believes bitcoin’s environmental scrutiny is disproportionate to its emissions, which are estimated at 0.1 percent to 0.15 percent of the world total. He wonders why bitcoin is singled out when other businesses pollute more or use dirtier energy. The question boils down to whether crypto has a purpose.

If bitcoin is valued more than cigarettes, which emits more, its footprint becomes simpler to justify. The balances will never match if bitcoin is a Ponzi scam.

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This ideological conflict and the enmity between bitcoin fans and their skeptics makes it difficult to have a comprehensive debate about the sector, and both sides have grown entrenched.

De Vries believes Bitcoin could technically emulate Ethereum. “Bitcoin might go to PoS,” he says. “It’s a societal issue.”

Bitcoiners accuse De Vries of being encouraged by central banks to disparage bitcoin, using inaccurate statistics, and failing to account for bitcoin’s complex interaction with the environment.

Bitcoiners fought environmental charity. The Skull of Satoshi, a tribute to Satoshi Nakamoto, was revealed by Greenpeace activists on March 23. The 11-foot skull has ancient motherboards, crimson eye sockets, and chimneys that emit smoke from the summit. Rolf Skar, Greenpeace USA’s campaign director, said the display symbolized crypto mining’s carbon emissions and e-waste. On Twitter, bitcoin enthusiasts called the skull “metal” and “badass.” Some changed their profile pictures.

Skar calls the reaction predictable but disappointing. It’s hardly shocking, but trivializing these very genuine concerns looks horrible.

Benjamin Von Wong, the sculpture’s designer, received criticism. After talking to bitcoiners, he tweeted on March 25 that his “black and white” evaluation had changed. “There are those on both sides who feel the other is stupidly hopeful, ignorant and misinformed,” he wrote.

The Skull of Satoshi is touring US cities as part of Greenpeace’s “Change the Code, Not the Climate” campaign to update the Bitcoin code base to cut emissions. Skar thinks bitcoin would prevent fossil-fuel facilities from “roaring back to life,” while Bendiksen calls it a “smear campaign.”

The parties also allege bad-faith data and fact misrepresentations. Pritzker and Bendiksen said Chris Larsen, creator of Ripple, a business that promotes XRP, a cryptocurrency that competes with bitcoin, funds Greenpeace. Nevertheless, Howson notes that the Bitcoin Mining Council, a coalition of mining businesses chaired by Michael Saylor, CEO of MicroStrategy, a company with hundreds of millions of dollars invested in bitcoin, provides evidence for pro-mining arguments.

Bitcoiners’ ideological hostility to PoS, aside from environmental concerns, worsens the standoff. Others, like Bendiksen and Pritzker, feel PoS increases the possibility of centralization and censorship, threatening crypto’s core values. Pritzker calls PoS the fiat system because “whoever owns the gold determines the rules.” Bendiksen said bitcoiners “never consent” to a transition.

Attacking bitcoin is an attack on their morality, ideals, and frequently their net worth. Von Wong told WIRED that this personalizes everything. “Because most individuals don’t regard themselves as innately awful, they feel misjudged and misunderstood, which is a poor place to start a conversation.”

Both parties hurl obscenities but don’t record valid or well-intentioned objections. All information that might discredit the opposition is grabbed. Von Wong fears becoming a morsel.

“Feeling like a chess piece in a quarrel is the toughest part,” he adds. “I can’t talk freely in public without someone twisting what I say out of context and attempting to use it against the other side.”

Hackers Steal $13M from South Korean Exchange

Original Source: Hackers Rob South Korean Exchange of $13M in Bitcoin, Ethereum, Other Assets

After hacking South Korean crypto exchange GDAC, hackers stole $13 million in bitcoins.

The exchange’s hot wallet was hacked on April 9.

GDAC reported Monday that 60.8 Bitcoin (BTC), 350.5 Ethereum (ETH), 10 million WEMIX tokens, and 220,000 USDT were taken, representing 23% of its entire holdings.

WEMIX powers the crypto network.

WEMIX is “closely watching the issue.” WEMIX requested GDAC’s official announcements for incident details.

Bitcoin exchanges hold cash in hot wallets for fast withdrawals and trading. Hot wallets pose security problems. Hot wallets are connected to the internet, therefore if an exchange’s hot wallet is hacked, the exchange and its users might lose a lot of money.

Once the event was confirmed, GDAC CEO Seunghwan Han suspended and banned the exchange’s wallet system and related servers.

The business claimed it is working with domestic and overseas crypto exchanges and issuers to combat currency laundering and recover stolen currencies.

GDAC also notified the police, Korea Internet & Security Agency, and Korea Financial Intelligence Unit.

According to blockchain analytics startup Chainalysis, cryptocurrency theft rose to $3.8 billion last year.

State-backed North Korean hackers are suspected of causing the biggest one-year cryptocurrency loss.

Summary of today’s bitcoin and cryptocurrency news

In simple terms, as a result of Ether’s decoupling from mining, the environmental effect of bitcoin is once again a topic of discussion.

Finally, according to blockchain analytics firm Chainalysis, the value of cryptocurrency stolen in 2017 was a whopping $3.8 billion. This is the largest one-year loss ever recorded for a cryptocurrency, with state-backed North Korean hackers likely being among the most active perpetrators.