Amid the continuous noise about cryptocurrencies, its often hard to pick out what really matters. However this month, if all goes to plan, the energy-hungry digital sector will undergo its biggest shake-up in years.

Ethereum, the worlds second largest cryptocurrency, is tomorrow expected to start a technology changeover which, once complete, should cause its carbon emissions to plummet by 99%.

The rapid growth in cryptocurrencies in recent years has been staggering. Unfortunately, so too has been their contribution to climate change, due to the enormous amount of electricity used by computers that manage the buying and selling of crypto coins.

Take, for example, the worlds biggest cryptocurrency, Bitcoin. At a time when the world is desperately trying to reduce energy consumption, Bitcoin uses more energy each year than medium-sized nations such as Argentina. If the Ethereum switch succeeds, Bitcoin and other cryptocurrencies will be under immense pressure to deal with this problem.

Cryptocurrencies are digital currency systems in which people make direct online payments to each other.

Unlike traditional currencies, cryptocurrencies are not managed from a single location such as a central bank. Instead, theyre managed by a blockchain: a decentralised global network of high-powered computers. These computers are known as miners.

The Reserve Bank of Australia provides this simple explanation of how it all works (edited for brevity):

Suppose Alice wants to transfer one unit of cryptocurrency to Bob. Alice starts the transaction by sending an electronic message with her instructions to the network, where all users can see the message.

The transaction sits with a group of other recent transactions waiting to be compiled into a block (or group) of the most recent transactions. The information from the block is turned into a cryptographic code and miners compete to solve the code to add the new block of transactions to the blockchain.

Once a miner successfully solves the code, other users of the network check the solution and reach an agreement that its valid. The new block of transactions is added to the end of the blockchain, and Alices transaction is confirmed.

This process, used by most cryptocurrencies, is termed proof-of-work mining. The central design feature is the use of calculations which require a lot of computer time and huge amounts of electricity to perform.

Bitcoin alone consumes around 150 terawatt-hours of electricity each year. Producing that energy emits some 65 million tonnes of carbon dioxide into the atmosphere annually about the same emissions as Greece.

Research suggests Bitcoin last year produced emissions responsible for around 19,000 future deaths.

The proof-of-work approach intentionally wastes energy. The data in a blockchain has no inherent meaning. Its sole purpose is to record difficult, but pointless, calculations which provide a basis for allocating new crypto coins.

Cryptocurrency advocates have given a variety of excuses for the monstrous energy consumption, but none stand up to scrutiny.

Some, for example, seek to justify cryptocurrencys carbon footprint by saying some miners use renewable energy. That may be true, but in doing so they can displace other potential energy users some of whom will have to use coal- or gas-fired power.

But now, the most successful of Bitcoins rivals, Ethereum, is changing tack. This month it promises to switch its computing technology to something far less polluting.

Read more: Ethereum: the transformation that could see it overtake bitcoin

Ethereums project involves ditching the proof of work model for a new one called proof of stake.

Under this model, crypto transactions are validated by users, who stake substantial quantities of blockchain tokens (in this case, Ethereum coins) as collateral. If the users act dishonestly, they lose their stake.

Importantly, it will mean the vast network of supercomputers currently used to check transactions will no longer be required, because users themselves are doing the checking a relatively easy task. Doing away with the computer miners will lead to an estimated 99% drop in Ethereums electricity use.

Some smaller cryptocurrencies such as the Ada coin traded on the Cardano platform use proof of stake but its been confined to the margins to date.

For the past year, Ethereum has been running the new model on experimental blockchains. But this month, the model will be merged into the main platform.

So what does all this mean? The Ethereum experiment could fail if, say, some stakeholders find ways to manipulate the system. But if the switch does succeed, Bitcoin and other cryptocurrencies will be under pressure to abandon the proof-of-work model, or else shut down.

This pressure has already begun. Tesla founder Elon Musks last year announced his company would no longer accept Bitcoin payment for its electric cars, due to the currencys carbon footprint.

The New York state legislature in June passed a bill to ban some Bitcoin operations that use carbon-based power. (However, the decision requires sign off from New Yorks governor and may be vetoed).

And in March this year, the European parliament voted on a proposal to ban the proof-of-work model. The proposal was defeated. But as Europe heads into the cooler months, and grapples with an energy crisis triggered by sanctions on Russian gas supplies, energy-guzzling cryptocurrencies will remain in the firing line.

One thing is clear: as the need to slash global emissions becomes ever more pressing, cryptocurrencies will run out of excuses for their egregious energy use.

Read more: Tesla's Bitcoin about-face is a warning for cryptocurrencies that ignore climate change

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The most important cryptocurrency event in years is about to begin and the biggest windfall goes to the planet - The Conversation Indonesia

those behind the first Organisers of the Crypto Policy Symposium hope the event will prompt much more 'critical discourse' of the sector Justin TALLIS

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Cryptocurrency critics, including economists and researchers, will gather in London and online this week to get their message across to regulators about the booming but volatile sector.

A number of governments have expressed concerns over cryptocurrencies, but those behind the first Crypto Policy Symposium say they hope the event will prompt much more "critical discourse" of the sector.

"There are so many crypto conferences but they are funded by the crypto industry," said Martin Walker, a co-organiser.

"The goal is to dispel some myths created by the crypto industry and to make policy makers start asking the right questions."

But Walker, a banking IT expert, is quick to reject claims that Monday and Tuesday's event is an "anti-crypto conference".

Instead he says it is a chance to hear the critical voices of specialists in financial bubbles, researchers who have evaluated the industry's carbon footprint and engineers who question the effectiveness of decentralised technologies.

"We've got regulators from all over the world," he said.

About 1,000 people have signed up to watch the conference online and UK officials are expected to attend a live event in London on Tuesday.

The conference comes as the price of bitcoin has plunged from a peak of nearly $69,000 last October to around $20,000.

The risky nature of the ultra-volatile and poorly regulated market for retail investors will be particularly highlighted.

Many central banks and financial market regulators have warned about the dangers posed by cryptocurrencies.

But in the absence of a clear legislative framework, users are rarely informed when making their investments, say crypto critics.

The collapse of cryptocurrency investment platform Celsius left customers in despair and unable to recover investments that sometimes included life savings.

The firm faced mounting troubles until it froze withdrawals in mid-June and a court filing showed it owed $4.7 billion to its users.

"People didn't understand that their money wasn't secure and they still don't understand why they can't get it back," said Amy Castor, a respected freelance journalist who is among the most vocal of cryptocurrency critics.

"We wanted to have our voices heard because it's important for regulators to understand the risks, how crypto-currencies work, the scam inherent in it, so that they can do more to protect retail investors (and) the public," she said.

Castor, who used to work for cryptocurrency media outlets, became known during the 2017 price surge and subsequent crash for her criticism of the so-called "stablecoin" Tether.

Tether's price is pegged to the US dollar but its cash flow remains murky.

"The problem is that crypto-currency has become so big that now there is a lot of money going into lobbying... to support politicians," Castor added.

In the United States some elected officials have proudly shown support for the sector, especially at the local level.

The mayors of Miami and New York have said they want to make their cities cryptocurrency capitals, and there are municipality-specific currency projects in various stages of development.

"Officials are making broad statements about the good of cryptocurrencies," said Tonantzin Carmona, a researcher at the Brookings Institution.

"They focus on what good could come from that tech and they ignore the real risks."

In March, Carmona published a research paper on the potential danger posed by the mayors' enthusiasm for cryptocurrencies.

She feared being attacked on social networks but instead says her arguments found favour with the small community of crypto-sceptics, who helped her see that she was not a lone voice.

"There's a difference between being a hater and being critical," she said.

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Cryptocurrency Sceptics Look To Bend The Ear Of Regulators - Barron's

What was once just a market of one is now flooded with other options for cryptocurrency investors. The arrival of meme coins that seem to create millionaires overnight makes it easy to believe that cryptocurrency investments are meant only for the short term. But despite a crowded field, there is one cryptocurrency investors should count on never selling -- Ethereum (ETH 1.04%).

Like Bitcoin (BTC 0.25%), Ethereum is a cryptocurrency that changed our thinking about finance in the digital age, but for different reasons. Ethereum is unique from Bitcoin in myriad ways. But one, in particular, is responsible for what is possibly the greatest innovation to result from blockchain and cryptocurrency technologies -- decentralized finance, better known as DeFi.

The traditional financial world relies on centralized authorities like banks, notaries, brokers, exchanges, and other middlemen who manage and process financial services. Traditional financial processes, such as applying for a loan or purchasing a stock, require some sort of intermediary to conduct the transaction.

But because of Ethereum and its innovative smart-contract technology, these traditional financial processes are becoming increasingly obsolete. Smart contracts are the backbone of DeFi and are what make Ethereum so unique. Before its creation in 2014, no other cryptocurrency had smart-contract capabilities. The creation of smart contracts allows blockchain developers to customize conditions and criteria for executing particular actions.

For example, smart contracts could oversee loan agreements and release collateral upon full repayment. Since smart contracts can integrate with other data, they could also regulate agricultural drought insurance policies by automatically paying out if agreed amounts of rainfall occur.

In addition to their seemingly infinite customization and potential, smart contracts and DeFi could completely upend what we believe traditional institutions' roles are in the financial world.

One of the most appealing aspects of DeFi is its inclusivity. If you want to utilize a DeFi financial product, all you need is an internet connection. There are no credit bureaus, no brokers, and no loan officers. As long as a crypto wallet is set up, users can trade and move assets anytime and anywhere.

In addition, all transactions are in real-time and completely transparent. There is no need for banks or brokers to process transactions since they occur near instantaneously on the blockchain. The other perk of the blockchain is that once a transaction is added, anyone with an internet connection can view activity on the network. It doesn't hurt that just about any possibility of tampering or malfeasance is eliminated due to the blockchain's high level of security.

Arguably, the greatest benefit of DeFi is that it is constantly evolving. Applications and projects built on Ethereum are all open-source. That means developers can integrate multiple DeFi apps to create financial products to meet new user demands as they arise.

Since Ethereum was the first blockchain to possess smart-contract functionality, it holds most of the market share that makes up the DeFi sector. Despite new competitors like Tron (TRX 0.13%), Binance Coin (BNB -0.26%), and Avalanche (AVAX 0.39%) arriving to grab some of the market, they face an uphill battle because Ethereum's grasp on the DeFi economy is unbelievably disproportionate.

We can look at a statistic called Total Value Locked (TVL) to compare the collective value of a blockchain's DeFi ecosystem. Think of it like the market cap of a company.

Out of the $62.5 billion invested across DeFi as of this writing, nearly $36 billion is on Ethereum's blockchain. The next-closest competitor is Tron, and this blockchain only supports about $9 billion of value. It's not even close.

The potential long-term value DeFi presents should be heavily weighed by investors, especially considering it's only in its infancy. Those who are optimistic that DeFi can usurp traditional finance should count on Ethereum continuing to dominate for the foreseeable future.

RJ Fulton has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Avalanche, Bitcoin, and Ethereum. The Motley Fool has a disclosure policy.

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1 Cryptocurrency to Buy and Hold Forever - The Motley Fool

Women also don't invest in cryptocurrencies as much as men do, said Ms. Hume, who cited risk aversion as one reason.

"It's been well established in research that women engage with investment risks differently than men," Ms. Hume said. "And financial advisers, in particular, have observed that when investment risks are unknown, women are more likely to take money off the table and pass on the opportunity. And what we have with crypto is an asset class that, at this point, the risks are still mostly unknowns."

According to a report released this year from Gemini Trust Co. LLC, a cryptocurrency exchange, 32% of crypto owners in the U.S. are female. Data released in February by eToro USA LLC, a trading platform for cryptocurrency and other exchanges, indicates that 41% of female investors in the U.S. have crypto holdings, and 41% plan to increase them.

Lule Demmissie, U.S. CEO of eToro based in New York, said while she thinks crypto has a "very diverse consumer base," there needs to be an increase in the diversity of crypto creators.

"Unless any innovation has a diverse set of people creating it, by definition, it cannot become an equitable product over time," Ms. Demmissie said.

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Cryptocurrency's gender diversity problem drawing increased focus from Congress, others - Pensions & Investments

Ethereum, the second largest cryptocurrency, will complete a plan to lower its carbon emissions by more than 99% in the next month, the foundation that controls the platform has confirmed.

The project, called the merge, will result in ethereum switching the underlying technology it uses for validating crypto transactions to a new process that requires less energy to manage.

Once complete, the merge will end the role of miners in the ethereum ecosystem, helping to dramatically reduce electricity usage. These users run huge quantities of powerful, purpose-built technology all day, every day, to generate random numbers that affect the security of the overall network.

The energy consumption of ethereum mining is currently estimated at about 72 terawatt-hours a year, according to Alex de Vries, a Dutch economist who runs the Digiconomist website. That is comparable with the power consumption of Colombia, with a carbon footprint equivalent to that of Switzerland.

The changeover will lead to the platform moving away from a proof of work process, which requires cryptocurrency miners to generate random numbers to verify records stored on the blockchain the technology underpinning digital currencies such as ethereum and the more popular bitcoin.

Ethereum will instead use a proof of stake process, in which the network will be secured by users who stake sums of the cryptocurrency, committing themselves to acting honestly at the risk of losing it.

De Vries said the switchover would eliminate the majority of electricity usage. They could cut off a huge chunk of their power demand. I will be working on quantifying that more accurately but at least 99% (probably even 99.9%) reduction should be achievable. This translates to something like the electricity consumption of a country like Portugal (a quarter of all data centres in the world combined) vanishing overnight.

The proof-of-stake model is currently being used on an experimental beacon blockchain, where it has been tested to ensure that the theoretical security it provides is sufficient for the multibillion-dollar economy that sits on top of the ethereum network. Now the experimental blockchain will take over the work of the main network.

Imagine ethereum is a spaceship that isnt quite ready for an interstellar voyage, the ethereum foundation said, explaining the merge. With the beacon chain, the community has built a new engine and a hardened hull. After significant testing, its almost time to hot-swap the new engine for the old midflight. This will merge the new, more efficient engine into the existing ship, ready to put in some serious lightyears and take on the universe.

There are still potential problems ahead. The foundation said users needed to watch out for an increase in scam activity because hackers could take advantage of the confusion around the switchover to try to trick users into giving up their passwords, their funds or both. You should be on high alert for scams trying to take advantage of users during this transition, the organisation said. Do not send your ETH anywhere in an attempt to upgrade to ETH2. There is no ETH2 token, and there is nothing more you need to do for your funds to remain safe.

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The final stages of the merge are expected to begin on 6 September, the foundation said, with the old blockchain switched off at some point between 10 and 20 September.

Ethereum will not be the first network to use proof of stake, and others including cardano and solana have demonstrated the technology at a smaller scale. But its switchover will leave bitcoin, the largest cryptocurrency, facing renewed criticism for its continued reliance on proof of work.

The bitcoin network uses 130TWh of electricity a year, De Vries estimates, a sum that will be increasingly difficult to defend if the ethereum blockchain demonstrates that the same capabilities can be achieved in an environmentally friendly manner.

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Cryptocurrency ethereum plans to cut carbon emissions by 99% with upgrade - The Guardian

The crypto industry has seen an immense growth in the last few years, with several countries introducing laws to regulate them.

Cryptocurrencies are digital assets representing value which can be digitally stored, traded, transferred or even used as a payment tool. Unlike legal tender or fiat currency, cryptocurrency is not issued by banks or governments, but is based on a decentralized structure which exists across a public network, allowing it to be outside the control of central authorities.

Crypto Scams

But with the growing popularity of the crypto industry all over the world and in the UAE, crypto scams have also seen a huge increase.

Crypto scams are unfortunately, a reality and occur on a regular basis with scammers using various techniques and methods to scam buyers and sellers.

In some cases, the trade offers a high return with no explanation, which could be a sign of scam.

In other cases, the scammer may pose as a broker, and offer the buyer and the seller a very profitable deal. Once the scammer has convinced the parties that the deal is worthwhile, he may insist the parties to meet in person for completing the transaction. The buyer would typically bring cash to this meeting and send his account details to the broker. The broker will forward his own account details to the seller instead of the buyers, and the seller would end up sending cryptocurrency to the scammers account.

In another type of scam, fake crypto coins are bought by the buyer. Fake mobile applications which look like authentic apps, fake crypto websites and emails which appear to be genuine correspondence from a crypto website, are also other forms of scams.

Are there Laws in the UAE regulating crypto currencies?

Yes, at present there are limited laws in the UAE which regulate crypto currencies. For example, the Securities and Commodities Authority Decision No. 23/RM/2020 regulates the offering, issuing, listing and trading of crypto assets in the UAE.

The Emirate of Dubai issued Law No 4 of 2022 on the Regulation of Virtual Assets, which aims to regulate the virtual asset industry in the Emirate of Dubai.

Additionally, Abu Dhabi Global Market also has issued specific regulations on crypto currency activities such as crypto currency exchanges, custodians, intermediaries, brokers etc.

There may also be penalties if you are involved in crypto scams.

Under the Cybercrime Law of the UAE, propagating a cryptocurrency without a license from the competent authorities could lead to imprisonment of 5 years. It could also result in fine of up to 1 million dirhams. This has been provided under Article 41 of the Federal Decree-Law No. 34/2021 Concerning the Fight Against Rumors and Cybercrime.

Article 41 states as follows.

Everyone calls for or propagates a competition or crypto-currency or creates or manages false portfolio or company to receive or collect funds from the public for investment, management, utilization or development, without license from the concerned bodies, shall be sentenced to detention for a period of not more than (5) five years and/or to pay fine of not less than (250,000) two hundred fifty thousand Dirhams and not more than (1,000,000) one million Dirhams. The court shall order the recovery of the seized funds.

Further, under Article 48 of the Cybercrime Law, advertising, promoting, mediating or dealing in any form of virtual currency, or crypto currency which is not officially recognized in the UAE or which doesnt have a license from the competent authority will result in penalties including detention and fines.

Article 48 of the Cybercrime Law states as below.

Everyone commits either of the following acts through the information network or information technology method shall be sentenced to detention and/or to pay fine of not less than (20,000) twenty thousand Dirhams and not more than (500,000) five hundred thousand Dirhams: 1. Promotion of goods or services through misleading advertisement or misstatements. 2. Advertisement, promotion, mediation or dealing in any form or encouraging the dealing in a virtual currency, cryptocurrency, stored value unit or any payments unit not officially recognized in the state or without license of the competent body.

Conclusion

It is crucial to be fully aware and informed while dealing with crypto currencies to ensure that you are not being scammed out of your monies. Crypto transactions should be undertaken using licensed and recognized exchange platforms. It is also prudent to confirm the authenticity of the website or online crypto application before providing any personal information or details.

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What You Need to Know About Cryptocurrency Scams in the UAE - JD Supra

Asia and Japan in-particular, has been one of the frontrunners in the adoption of cryptocurrency. This should not come as a surprise because Japan is usually leading the way when it comes to welcoming innovative technology and ideas. Asian countries, such as Japan, have pushed the boundaries of technology and there are museums in Tokyo where you can see the technology of the future, including robots. The adoption of crypto in Japan has been widespread in certain age groups but how does it compare to the west?

To generate new cryptocurrency, a process called mining is required. This process requires a lot of energy and therefore, it makes sense for the most crypto to be mined where energy costs are low. When discussing crypto in the west, we must start with the United States. This is where much of the worlds bitcoin is mined and if we take figures from April 2021, the US had a global hash rate of 16.85%. However, this increased as the year progressed and a few months later, that figure was at 35.4%. In terms of specific states, Texas is leading the way in terms of crypto mining and could become known as the bitcoin capital of the world. In contrast, Japan is outside the top 8 countries for mining bitcoin, with China, Kazakhstan, Russia, Canada, Iran, Malaysia, Germany, and Ireland all above Japan when it comes to mining bitcoin. So, in the respect of mining, Japan has not adopted crypto the same as the west, with the United States, Canada, Germany, and Ireland leading the way.

When discussing the adoption of cryptocurrency by Japan, we must consider the crypto legislation in the country. Crypto exchange businesses in Japan are regulated by the Payment Services Act and have been since April 2017. In 2014, the Japanese government decided not to introduce laws to prohibit individuals or companies from receiving bitcoin as a form of payment. All cryptocurrency exchange businesses must be registered and keep records and transactions must comply with money laundering. Looking at the west and particularly the United States, bitcoin was classified as a convertible decentralized virtual currency in 2013 by the U.S. Treasury and is legal in the country. So, cryptocurrency is legal in Japan and the major western nations, including the United States, Canada, Germany, Spain, and the United Kingdom.

Japans cryptocurrency market grew significantly in 2021 and between the end of 2020 and 2021, the amount of crypto being traded in the country increased by six times. As of the beginning of 2022, over 6 million people in Japan were using crypto but it seems the government is keen to keep the industry under control. In terms of population percentage, roughly 5% of the Japanese people are using crypto. Switching to the west and in the United States, between 30 to 50 million US citizens have engaged with crypto and that figure is predicted to keep rising. That means around 14% of the population are using or have used crypto. This number is bigger than Japan but access to crypto has been a lot easier for US citizens over the years. If we look at the United Kingdom, roughly 1 million people claim to own a crypto asset. That means just under 2% of the population have used crypto, which is less than Japan. Perhaps Japans high interest in gaming has helped, with crypto gaming becoming more popular since 2018. There are plenty of high quality crypto casinos in Japan and new gaming cryptocurrencies have been issued, with Enjin being a good example.

Japan is home to many established companies and start-ups who are entering the crypto market. Japan may not mine as many bitcoins or have the same legislation as countries in the west but the country is adopting cryptocurrency quickly. The number of individuals and companies entering the crypto market in Japan is only going to increase in the future.

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Has Japan Adopted Cryptocurrency the Same Way as the West? - Coinpedia Fintech News