Yes, data centers use a lot of water. But a Utah company shows it doesn’t have to be that way. – Salt Lake Tribune

West Jordan Novvas new Utah data center looks like it could double as the set of a high-tech Hollywood thriller.

It has sleek modern architecture with high-end finishes. An observation deck with frosted smart glass turns transparent with just a touch. It reveals banks of servers, row upon row, humming away day and night. Clients access those servers via stiff security, including facial scanners, heat signatures and laser detectors. A pack of robotic guard dogs (programmed by Brigham Young University students) patrol dozens of miles each day across the server farm, searching for would-be trespassers and thieves.

Its just as difficult to get out of here as it is to get in, said Novva CEO Wes Swenson, snappily dressed in black from head to toe, hints of the Payson drawl of his youth occasionally peeking through as he speaks.

Beyond all the gadgets, Novva offers one innovation that should at least pique the curiosity of Utahs drought-stricken communities: Compared to most massive data centers around the state and the world, Novva uses a fraction of the water.

There are those who might shrug off the centers technology, like security drones so finely tuned they can detect vibrations that arent due to wind. Or those who turn up their nose at more data centers along the Wasatch Front, given the amount of land they consume and other environmental concerns. But with the rise of the internet, the surge of streaming, an influx of smart devices and a future of autonomous vehicles, big server farms are increasingly a mainstay of life.

The fact is, Swenson said, unless people want to put down their computers, youre going to have to have data centers.

And if we have to have them, at least they could help offer a solution to northern Utahs water-strapped cities, and potentially let more trickle downstream to the shriveling Great Salt Lake.

(Rick Egan | The Salt Lake Tribune) Novva in West Jordan.

Asked whether his facility could serve as a backdrop for the next James Bond flick, Swenson gave a tacit chuckle. But theres a reason data centers like his are designed with cutting-edge technology.

Its the worlds most expensive insurance, Swenson said of his campus, which eventually will represent a projected $1 billion investment. Youre basically guaranteeing we will stay up, no matter what.

That means its arsenal of servers cant overheat.

The United States accounts for about 40% of the worlds large cloud and internet data sites. Utah is home to at least 25 colocation data centers, according to a Data Center Map estimate, most of them near Salt Lake City. Those sites, like Novva, rent servers to a variety of customers, from gas stations to medical companies. The figure doesnt include big centers run by single entities, like the U.S. National Security Agencys operation in Bluffdale or Facebooks facility in Eagle Mountain.

And most data centers, regardless of their operators, rely on evaporative cooling to keep their servers at optimal temperatures. Some gulp down millions of gallons each month.

(Francisco Kjolseth | The Salt Lake Tribune) The extensive campus of the Facebook data center in Eagle Mountain is pictured on Wednesday, June 29, 2022.

Its a worse story than you can imagine, Swenson said. Theyre using culinary water, not irrigation [water], so its been treated by the city. ... Its a complete waste of a resource.

Data centers further treat their water with chemicals to prevent things like scale buildup and Legionnaires disease. Some of the water is lost through the evaporative process, while the rest can be reused only a few times before it has to be flushed from the system.

Unfortunately, Swenson said, the places where evaporative cooling works the best are the places where there is the least amount of water.

As climate change fuels drier conditions and the Wests current megadrought shows no signs of ending, some of those arid communities are protesting water-guzzling data facilities. In the early 2010s, Utahns worried so much about the NSA data centers water consumption along with Edward Snowdens revelations that the agency was illegally spying on U.S. citizens that a Republican legislator proposed shutting off its supply.

In 2020, Google found itself in a legal battle with a utility provider in Red Oak, Texas, which insisted it didnt have enough water to meet the companys 1.5 billion-gallon annual need. And last year, the vice mayor of Mesa, Ariz., called data centers an irresponsible use of water.

The essential difference with the Novva data center is that it cycles refrigerant instead of relying on water evaporation. Swenson incorporated a similar system as the CEO of the 97,000-square-foot C7 data center in Bluffdale, designed for 10 megawatts. That facility sold to DataBank in 2017, but Swenson said he learned a lot from the project.

Weve gotten way better at it, he said. And the systems weve adapted for this are really something weve done. Its not an off-the-shelf product.

Comparing those water-light facilities with two of Utahs largest data centers Facebook and NSA reveals conspicuously different use patterns.

(Christopher Cherrington | The Salt Lake Tribune)

The NSA facility in Bluffdale is 1 million square feet, with 100,000 square feet dedicated to its Tier III data center. It uses 65 megawatts.

In the 12 months between June 2021 and May of this year, NSA drained more than 128 million gallons, according to a records request sent to Bluffdale. Even with Utahns high water-consumption habits the U.S. Geological Survey currently rates them as the second thirstiest users in the nation thats enough water to support nearly 2,100 residents.

If the state adopted stricter conservation measures like, say, Nevada, the NSAs water could support almost 2,800 Utahns.

That might sound like a drop in a leaky bucket, considering Utahs water woes. But with subdivisions multiplying along the Wasatch Front and the Great Salt Lake receding more and more by the day, every drip counts.

Facebooks parent company, Meta, has adopted sustainability goals for its own data centers. Still, it consumed 13.5 million gallons in the year between June and May at its 970,000-square-foot Utah site, according to information provided by Eagle Mountain.

The C7/DataBank center in Bluffdale which is a tenth the size of the NSA and Facebook campuses used 6.9 million gallons in the past year.

Novva, meanwhile, has consumed about 1.1 million gallons since its servers went on line in January, according to West Jordan. In May, it used 585,000 gallons its highest monthly rate of consumption to date. By comparison, Facebook used 1.3 million that month and the NSA chugged nearly 13 million gallons.

Novva currently has 330,000 square feet of server space, designed to use up to 30 megawatts, and plans to expand to 1.5 million square feet. The center ultimately will have a 120-megawatt capacity, according to the Novva website, although Swenson said he could use as much as 200 megawatts.

If the fully built center used traditional evaporative cooling, Swenson noted, it would ingest around 300 million gallons a year.

Instead, the center will use water mostly to establish drought-tolerant, native vegetation around the campus (it also has artificial turf) for the next two years.

After that, we cut it off, and everything is just naturally growing, Swenson said. So the only water we use is for [drinking], toilets, things like that. Just like a house.

The Novva campus uses closed, recirculating pipes with refrigerant to cool its servers. It also capitalizes on Utahs high-desert climate.

(Rick Egan | The Salt Lake Tribune) The cooling system in Novva, using recirculating refrigerant and ambient air conditioning.

The advantage of sitting at this altitude, Swenson explained, is that we use the outside air, just the ambient air temperature, to cool the center about 4,000 hours a year.

Fans suck the servers hot air underground, below 5-foot insulated floors, then exchange it with outdoor air during cooler months, when temperatures are below 70 degrees.

The system has an initial upfront cost thats higher than traditional evaporative cooling, Swenson said, but he expects a payback period of eight years due to water savings.

Quite honestly, the cities and counties have not been punitive about it, he said, when asked why more data centers dont install similar systems. ... Waters cheap.

The CEO added that hes concerned about water, having lived in drought-prone places his entire life. But water-free cooling also makes business sense, especially as some areas scramble while their water supplies dry up.

Im trying to reduce my dependencies, not increase them, Swenson said. So why create another dependency on a natural resource I cant control?

Beyond water consumption, data centers dont create many jobs. They also eat up a lot of energy (more on that later). Still, the Utah cities that welcome the facilities say they offer a lot of benefits.

Bluffdales 20,000 water customers live on fairly large residential lots for an urban area, and the city has a wide secondary water system. It mostly buys water from the Jordan Valley Water Conservancy District.

Construction of the NSA site helped fund a 3 million-gallon culinary water tank which helps the city during peak demand periods and four miles of municipal pipe, according to City Manager Mark Reid. The infrastructure that came to the city was fantastic.

Whats more, the spent water NSA discharges irrigates the park at City Hall and a nearby subdivision.

(Francisco Kjolseth | The Salt Lake Tribune) The National Security Agency (NSA) data center in Bluffdale, with a visible water tank visible to the right, is pictured on Wednesday, June 29, 2022.

Its really good water, Reid said. It does excellent on grass.

Speaking of infrastructure, data centers dont generate nearly the amount of traffic as some industries, including the mining activities that have traditionally occurred on the Salt Lake Valleys west side. That means less wear and tear to roads. They also have their own fire and security systems, so theyre less of a burden on a citys firefighting and police budgets.

And, Reid pointed out, the NSA isnt using anywhere near the 1.7 million gallons per day it initially projected.

In a statement, an NSA spokesperson said the agency is working to limit water use and be a responsible member of the community.

For example, the spokesperson said, during the June 2021 through May 2022 time period, the NSA, through its efficiency efforts, returned more than 34.5 million gallons of water (or approximately 27% of its water estimate needs) to Bluffdale during the summer, or returned to the Jordan River during the winter.

The agency is also working to reduce its water needs by using dry coolers instead of evaporative systems.

At Eagle Mountain, City Manager Paul Jerome said the Facebook data center provided something the growing Utah County city of more than 50,000 desperately needed tax revenue.

Its a bedroom community. It probably will be for a long time, Jerome said. We dont have the pass-through other cities have. We have far less retail than a city our size should have.

The city west of Utah Lake is also planning for a new Google data center on 300 acres. Facebook, meanwhile, expects to more than double its center, to 2.4 million square feet.

(Francisco Kjolseth | The Salt Lake Tribune) An extensive electrical grid powers the Facebook data center in Eagle Mountain on Wednesday, June 29, 2022.

Eagle Mountain recently raised its water rates for the first time in two decades. Facebook is locked in at the highest tier $1.24 per 1,000 gallons regardless of its consumption. The city mostly relies on groundwater but has increasingly turned to the Central Utah Water Conservancy District to supplement its supply.

Still, Jerome said, hes not worried about adding more data center capacity.

Right now, to be honest, we have water for our needs, he said. ... Yes, they use water. We know this. At least the big ones do. It seems from where Im sitting that they dont use as much as everybody thought they would use.

Facebook also has made an effort to give back to the community, Jerome said. It recently partnered with Utah Valley University, for example, to build a stargazing park in Eagle Mountain.

The company has worked to offset its water impacts as well, paying the Central Utah Water Conservancy District to scale back hydropower production during the hottest months to improve fish habitat in the Provo River, according to a spokesperson for Meta.

Their whole push is to help rehabilitate state water sources so they can help create value that offsets their use of water, Jerome said. At a minimum, theyre trying to be water neutral.

Water improvements aside, data centers devour a lot of electricity. Novva is no exception. And the coal-fired power plants that supply much of the states energy are known water guzzlers, too.

Novva could add a solar farm to its 100-acre property instead, Swenson said, but that would gobble up a lot more land. A recently approved solar project in Connecticut will supply a similar megawatt load that Novva is targeting, but it sprawls across nearly 500 acres.

(Rick Egan | The Salt Lake Tribune) A robot dog at Novva, in West Jordan, which operates without using a water to cool their servers. Tuesday, June 14, 2022.

Thats why Swenson said he buys 100% renewable energy for the Novva center through Rocky Mountain Power, emphasizing the need to invest in green energy locally. Even if Novva were to find enough land to build its own solar farm, it wouldnt provide any benefit to other energy consumers.

Whereas, if we do it as a collective with the power companies or local communities, Swenson said, were pushing [renewables] for everybody, and eventually well bring down the cost for everyone.

The approach to the data centers water and energy use, and even its weird robot dogs and super-sensitive drones, Swenson said, is all about creating a paradigm shift in the industry.

Novva, the name, comes from Latin, meaning new, he said. And thats the idea.

This article is published through The Great Salt Lake Collaborative: A Solutions Journalism Initiative, a partnership of news, education and media organizations that aims to inform readers about the Great Salt Lake.

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Yes, data centers use a lot of water. But a Utah company shows it doesn't have to be that way. - Salt Lake Tribune

Op-ed: The toughest challenges for cryptocurrency lie ahead, not in the rear-view mirror – CNBC

More than a third of millennials and half of Generation Z would be happy to receive 50% of their salary in cryptocurrencies, revealed a study.

Srdjanpav | E+ | Getty Images

With more than $1 trillion in cryptocurrency value wiped out since the 2021 high-water mark, many investors may be tempted to enter the cryptocurrency orbit at a potentially attractive, lower price point.

After all, previous dramatic drawdowns in cryptocurrency valuations have been followed by explosive growth and all this volatility could be justified as the expectedly bumpy price discovery process of an important brand-new asset class.

However, the most profound risks to cryptocurrency investing may lie ahead, rather than in the rear-view mirror. Investors contemplating a long-term allocation to cryptocurrencies should remain wary for five primary reasons.

After a dazzling first decade, bitcoin has become a somewhat troubled teenager. In its heady early days, bitcoin had near-zero correlation with broad equities and commodities, providing the potential for true portfolio diversification.

However, as cryptocurrency investing has become more mainstream, and especially since 2020, bitcoin's correlation with U.S. equities and bonds has spiked sharply and remained consistently positive.

That might be fine if bitcoin offered spectacular risk-adjusted returns as compensation. Unfortunately, recent empirical evidence shows otherwise: Since 2018, bitcoin's risk-adjusted return has been quite unremarkable compared to equities and bonds.

Despite all the hype as digital gold, cryptocurrencies have failed to demonstrate either "safe haven" or inflation-fighting properties when faced with actual market volatility or the first real bout of serious inflation in developed markets.

Between 2010 and 2022, bitcoin recorded 27 episodes of drawdowns of 25% or more. By comparison, equities and commodities recorded just one each. Even in the pandemic-related market selloff of March 2020, bitcoin suffered significantly deeper drawdowns than conventional asset classes like equities or bonds.

More from Personal Finance:This former financial advisor pivoted to teach advisors about crypto80% of socially responsible ESG investors also own cryptocurrencySome experts say a recession is coming. Heres how to prepare your portfolio

Similarly, while the fixed supply of bitcoin hardcoded into its blockchain might imply a resistance to monetary debasement, in the recent episodes of elevated global inflation, bitcoin has provided limited inflation protection with prices tumbling even as inflation spikes in the U.S., U.K. and Europe.

Cryptocurrencies remain deeply problematic from an environmental, social and governance, or ESG, perspective. That's true even if the transition from proof-of-work to proof-of-stake that blockchain-based software platform ethereum is spearheading reduces the massive energy consumption underpinning crypto mining and validation.

Environmentally, bitcoin which represents more than 40% of current cryptocurrency market cap will continue to use a validation process where a single transaction requires enough energy to power the average American home for two months.

Socially, cryptocurrencies' promise of financial inclusiveness also appears overblown, with crypto wealth as unequally distributed as conventional wealth, and with simple phone-based payment services such as M-Pesa in Kenya or Grameen Bank's international remittance pilots in Bangladesh already providing a digital platform for underbanked households without the need for a new currency or payment infrastructure.

Most troublingly for investors with ESG goals, however, are the governance issues with cryptocurrencies whose decentralized frameworks and anonymity make them especially attractive for illicit activity, money laundering and sanction evasion.

The increased trading between ruble and cryptocurrencies following sanctions on Russia after the Ukraine war suggest that the evasion of financial sanctions is not just a theoretical concern. Market manipulation is another area of governance concern, especially with celebrity crypto influencers who can send market prices soaring or tumbling with impunity.

Even putting aside the recent implosion of the Terra stablecoin, the surviving universe of stablecoins face a potentially existential risk: They could well be made redundant once central bank digital currencies, also called CBDCs, become commonplace. This is because a digital dollar, euro or sterling would provide all the functionality of stablecoins but with almost no liquidity or credit risk.

In other words, even if stablecoins transformed from their current status as unregulated money market funds (with limited transparency into or auditing of reserves) into regulated digital tokens, they would afford no benefit over CBDCs. Importantly, these central bank digital currencies may not a distant prospect. China has already launched an electronic currency known as the digital yuan, or e-CNY.

The Fed released a long-awaited study on a digital dollar at the start of 2022, and the ECB will share its findings on the viability of a digital euro in 2023.

Finally, a lack of clear and uniform cryptocurrency regulation both within and across countries creates tremendous uncertainty for long-term investors. It is still unclear in the U.S., for example, when a cryptocurrency falls under the regulatory framework of a security subject to Securities and Exchange Commission regulations and when it is deemed to be an asset or commodity like bitcoin and ether have claimed.

Indeed, in some countries, cryptocurrencies are facing outright prohibition. China's abrupt banning of all cryptocurrency trading and mining in 2021 is a prominent example, but by no means the only one. Regulators have also been concerned with the notable and repeated breakdowns in the infrastructure supporting cryptocurrency mining and trading another area where there remains significant regulatory uncertainty.

Of course, momentum, retail speculation, and the "fear of missing out" may continue to drive up the short-term price of bitcoin, ether and other cryptocurrencies. But there are enough dark clouds on the cryptocurrency horizon that long-term investors may want to observe carefully from the sidelines to better understand fact vs. fiction and true value versus social media hype before deciding how, where and if to invest in the crypto ecosystem.

By Taimur Hyat, chief operating officer of PGIM.

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Op-ed: The toughest challenges for cryptocurrency lie ahead, not in the rear-view mirror - CNBC

Russia bans use of cryptocurrency and NFTs to pay for goods and services – SiliconANGLE News

Russian President Vladimir Putin today signed a bill that prohibits using digital assets in the country, including cryptocurrency and nonfungible tokens, to pay for goods and services.

The law, coming nearly seven months after Russias central bank called for a ban on using and mining cryptocurrencies, does not ban possession of cryptocurrency and digital assets, rather it restricts how theyre used. It is forbidden to transfer or accept digital financial assets as a counter-provision for the transferred goods, work performed, services provided, as well as another method that allows assuming payment by the digital financial asset of goods (works, services), except in cases provided for by federal laws, the law states.

The call for a ban in January was argued on the basis that digital assets pose a threat to the countrys financial stability and peoples well-being.The breakneck growth and market value of cryptocurrency are defined primarily by speculative demand for future growth, which creates bubbles, the central bank said at the time. Cryptocurrencies also have aspects of financial pyramids because their price growth is largely supported by demand from new entrants to the market.

Its not clear exactly how many people in Russia will be affected by the new ban. It doesnt mention cryptocurrency mining, meaning that the law shouldnt impact Russias mining community, the third-largest in the world as of April. The law also doesnt ban possession or direct trading of cryptocurrencies, meaning there will be little impact for most in Russia.

Russia has a strange history with cryptocurrencies,at times lookingto ban them, then seemingly looking tolegalize them. In 2018, as Russian banks were planning cryptocurrency pilots, others in Russia were rallying against them.

Forward to Russias invasion of Ukraine in February, and attempts were made to have cryptocurrency exchanges suspend accounts belonging to Russian nationals, a request refused by leading exchanges. In April, the U.S. Treasury Department sanctioned Russian-owned cryptocurrency mining company Bitriver AG as part of a crackdown on companies and individuals avoiding sanctions on Russia.

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Russia bans use of cryptocurrency and NFTs to pay for goods and services - SiliconANGLE News

Cryptocurrency flowing into mixers hits an all-time high. Wanna guess why? – Ars Technica

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The amount of cryptocurrency flowing into privacy-enhancing mixer services has reached an all-time high this year as funds from wallets belonging to government-sanctioned groups and criminal activity almost doubled, researchers reported on Thursday.

Mixers, also known as tumblers, obfuscate cryptocurrency transactions by creating a disconnect between the funds a user deposits and the funds the user withdraws. To do this, mixers pool funds deposited by large numbers of users and randomly mix them. Each user can withdraw the entire amount deposited, minus a cut for the mixer, but because the coins come from this jumbled pool, it's harder for blockchain investigators to track precisely where the money went.

Some mixers provide additional obfuscation by allowing users to withdraw funds in differing amounts sent to different wallet addresses. Others try to conceal the mixing activity altogether by changing the fee on each transaction or varying the type of deposit address used.

Mixer use isn't automatically illegal or unethical. Given how easy it is to track the flow of Bitcoin and some other types of cryptocurrency, there are legitimate privacy reasons anyone might want to use one. But given the rampant use of cryptocurrency in online crime, mixers have evolved as a must-use tool for criminals who want to cash out without being caught by authorities.

"Mixers present a difficult question to regulators and members of the cryptocurrency community," researchers from cryptocurrency analysis firm Chainalysis wrote in a report that linked the surge to increased volumes deposited by sanctioned and criminal groups. "Virtually everyone would acknowledge that financial privacy is valuable, and that in a vacuum, there's no reason services like mixers shouldn't be able to provide it. However, the data shows that mixers currently pose a significant money laundering risk, with 25 percent of funds coming from illicit addresses, and that cybercriminals associated with hostile governments are taking advantage."

The report added: "Mixers may soon become obsolete as Chainalysis continues to refine the ability to demix certain mixing transactions and see users original source of funds. But for the time being, our data shows that mixers are receiving more cryptocurrency than ever in 2022."

Cryptocurrency received by these mixers fluctuates significantly from day to day, so researchers find it more useful to use longer-term measures. The 30-day moving average of funds received by mixers hit $51.8 million in mid-April, an all-time high, Chainalysis reported. The high-water mark represented almost double the incoming volumes at the same point last year. What's more, illicit wallet addresses accounted for 23 percent of funds sent to mixers this year, up from 12 percent in 2021.

As the graph below illustrates, the increases come most notably from higher volumes sent from addresses connected to illicit activity, such as ransomware attacks, cryptocurrency scams, and stolen funds carried out by groups sanctioned by the US government. To a lesser extent, volumes sent from centralized exchanges, DeFi, or decentralized finance protocols, also drove the surge.

Chainalysis

A breakdown of volumes connected to illicit sources shows that the spike is driven primarily by sanctioned entitiesmainly Russian and North Korean in originfollowed by cryptocurrency thieves and fraudsters pushing cryptocurrency investment scams.

Chainalysis

The sanctioned entities are led by Hydra, a Russia-based dark web market that serves as a haven for criminals to buy and sell services and products to one another. In April, the US Department of Treasury sanctioned Hydra to stymie the group's efforts to liquidate their ill-gotten proceeds. The remaining volume from sanctioned groups came from the North Korean hacking group Lazarus and the Blender.io tumbler, which the US Treasury Department sanctioned earlier this year for serving the North Korean government.

Chainalysis

Despite their utility, mixers suffer a critical Achilles' heel: Large transactions make them ineffective, meaning that they work less efficiently when people use them to deposit large amounts of cryptocurrency.

"Since users are receiving a 'mix' of funds contributed by others, if one user floods the mixer and contributes significantly more than others, much of what they end up with will be made up of the funds they originally put in, making it possible to trace the funds back to their original source," Thursday's report explained. "In other words, mixers function best when they have a large number of users, all of whom are mixing comparable amounts of cryptocurrency."

Post updated to correct description of Blender.io.

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Cryptocurrency flowing into mixers hits an all-time high. Wanna guess why? - Ars Technica

Top Cryptocurrency News on July 18: Bitcoin over Rs 17 lakh, crypto star warns of next big risk, NFT buzz,… – Moneycontrol

A Goldman legend, crypto star and top banker warn of next big risk

In a year in which Russias invasion of Ukraine is sending shock waves through global politics and markets, inflation is soaring worldwide and supply chains areunraveling, the largest investors are assessing the long-term consequences of the events they didnt see coming. We asked three market visionaries about the next big risk in the coming five to 10 years: Abby Joseph Cohen, the former Goldman Sachs Group Inc. strategist known for bold market calls who now teaches at Columbia University; FTX Chief Executive Officer Sam Bankman-Fried, whos boosting his charitable and political giving while his cryptocurrency exchange is becoming a lender of last resort in his industry; and Ken Moelis, the billionaire whose investment bank advises some of the worlds largest companies.Read More

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Top Cryptocurrency News on July 18: Bitcoin over Rs 17 lakh, crypto star warns of next big risk, NFT buzz,... - Moneycontrol

Should Millennials Be Investing in Cryptocurrency? – The Motley Fool

Whether you bought in early or got in recently, the crypto market has been an extremely volatile area for investors. Values can rise or fall 95% or more in a matter of days, and there seems to be no warning as to when big moves are coming.

Does this volatility mean cryptocurrency doesn't belong in millennials' portfolios? I think there is a place, but if you have a clear investment thesis with diversified assets cryptocurrency can be a good investment for young investors.

The first question to answer is why you are investing in cryptocurrencies at all. Some investors think cryptocurrencies like Bitcoin (BTC 1.11%) are digital gold, while others think crypto is a digital currency or utility for developments like smart contracts, the metaverse, or digital goods. Understanding your investment thesis will guide where your focus should be.

Like buying a stock, understanding your investment thesis can make or break a crypto investment. If the thesis is simply that a token will go up, based on technical analysis alone with no fundamental reason, the thesis will quickly fall apart -- much like a stock with a weak underlying company.

Millennials with a long-term time horizon should look for investment opportunities where disruptive technology is being built -- just like the internet was a disruptive technology in the 1990s, despite the fact that the idea of building an internet business seemed crazy at the time. I think of many cryptocurrency projects as an ecosystem and their cryptocurrencies as the "currency" of that ecosystem.

Blockchain technology allows for new innovations in technology. That's why I've kept my focus on Ethereum (ETH 4.27%) and Solana (SOL 2.31%), and I've placed most of my crypto exposure with NFTs.

These utility blockchains with smart contracts (led by Ethereum and Solana) allow information to be stored on the blockchain and then developers can build tools and businesses around that data. It could be a metaverse project where a digital asset notes ownership of land or an NFT that gives membership to a club (like Bored Ape Yacht Club).

These tokens are often called utility tokens and there are dozens that serve different purposes in Web3. Having exposure to cryptocurrencies that are building a larger ecosystem with real-world or digital world businesses is where real value will be found.

If you've been following crypto markets over the last few months you know that volatility is commonplace. It's not uncommon for values to rise or fall 10% or more in a day and some cryptocurrencies can go to zero overnight.

Diversification will take some risk from your portfolio, but doing due diligence on how cryptocurrencies are run and where there's risk is critical. Not all cryptocurrencies will survive the next few years and acknowledging that risk is important as an investor.

It may sound counterintuitive, but I think the same Foolish mindset that works in stocks will work in cryptocurrencies. Investing in projects you believe in and founders that have a long-term vision of how to build value is where money will be made.

And like the stock market, a level of diversification is needed because we never know when unanticipated risks will cause a cryptocurrency to drop to zero.

It's likely to be a bumpy ride, but given the disruption potential from crypto and the blockchain, I think millennial investors with a multi-decade time horizon should have at least some crypto exposure. If that exposure is diversified and in projects that are growing and attracting users, the upside is still very high.

Travis Hoium has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.

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Should Millennials Be Investing in Cryptocurrency? - The Motley Fool

The Other Side Of The Coin: Cryptocurrency Assets In Bankruptcy – Fin Tech – United States – Mondaq

On July 5, 2022, cryptocurrency brokerage Voyager Digital filedfor chapter 11 in the Southern District of New York BankruptcyCourt, citing a short-term "run on the bank" due to the"crypto winter" in the cryptocurrency industry generallyand the default of a significant loan made to a third party as thereasons for its filing. At Voyager's first day hearing on July8, 2022, the Bankruptcy Court asked the critical question ofwhether the crypto assets on Voyager's platform were propertyof the estate or its customers. Voyager asserted the crypto assetswere assets of the estate pursuant to the terms of its customeragreements, but the question of ownership was more problematic inthe context of a liquidation. In that context, Voyager's planof reorganization proposes to resolve any mystery of ownership bydelivering the reorganized company to its customers.

On July 13, 2022, cryptocurrency lender Celsius Network filedfor chapter 11 in the Southern District of New York BankruptcyCourt. Celsius had frozen customer withdrawals on June 12, 2022and, at the time of its chapter 11 filing, indicated that it wouldnot be requesting court authority to allow customer withdrawals.Celsius noted in a press release that customer claims would beaddressed through the chapter 11 process.

Voyager's and Celsius' chapter 11 bankruptcy filingshighlight the question of whether crypto assets held by anexchange, or similar platform, may be considered property of abankruptcy estate and, therefore, not recoverable by the customer,who would then likely be an unsecured claimholder of thedebtor.

While some commentators have suggested that crypto assets mightbe considered property of the exchange's bankruptcy estate,existing common law, existing provisions of Uniform Commercial Code(UCC) Article 8, and proposed amendments to the UCC recognize thatif the arrangement and relationship between the exchange and itscustomers is one that is characterized as "custodial,"the crypto assets held by the exchange should remain property ofthe customer and, hence, not subject to dilution by generalunsecured claimholders.

The common law. When assets are heldby a "custodian" for the benefit of the customers of thecustodian, the assets are owned by the customer and would not formpart of the debtor's bankruptcy estate. The United States Courtof Appeals for the Seventh Circuit determined in In reJoliet-Will County Community Action Agency1 thatproperty held by the debtor as a custodian or other intermediarywho then generally lacks beneficial ownership rights is not anasset of the bankruptcy estate.

The court then looked to see if the relationship between thedebtor and those who transferred funds to the debtor was in fact"custodial." The court concluded the answer depends on"the terms under which the grants were made" and the"relationship" between the holder of the funds and itscustomer. In Joliet-Will, the agreement provided forcontrols on the holder's use of the funds and the holder was"in effect an agent to carry out specified tasks rather than aborrower, or an entrepreneur using invested funds." The courtconcluded the relationship was "custodial" and, thus, thefunds were not property of the bankruptcy estate.

In the context of a cryptocurrency exchange bankruptcy, the sameanalysis should apply where the terms of the relationship betweenan exchange and its customer are comparable and, thus,"custodial". In that case, the customer would have abasis to assert that it should remain the beneficial owner of theassets, rather than become a general unsecured claimholder of theexchange.

The commingling of customer assets, or the contractual right ofan exchange in possession or control of the customer's assetsto grant a security interest in that property do not, ofthemselves, prevent the assets from remaining the property of thecustomer.2

Conversely, if the entity in possession or control of theproperty has extensive rights to use the property for its ownbenefit, a court is more likely to conclude that the relationshipis not "custodial." In that case, the customer"would have a contractual claim for the return of the money[it] had paid, but he would not have a property right in themoney."3

However, even if a court was to determine the customer shouldremain the beneficial owner of assets held by a custodianin such capacity, notwithstanding any commingling and any right topledge the cryptocurrency, any contractual rights of thecustodian (for example, any rights under a staking arrangement)should become property of the estate. In such a case, while thecustomer remains the beneficial owner of its cryptocurrency, whichwould not be subject to distribution to general unsecuredclaimholders in the exchange's bankruptcy, it could be tied upunder the automatic stay preventing parties from exercising controlover the exchange's contractual rights (e.g., under astaking arrangement, the automatic stay might prevent a customerfrom recalling the cryptocurrency to its account).

Article 8 of the Uniform CommercialCode. Article 8 mirrors these rules for financialassets held by a securities intermediary. Under Article 8, asecurities intermediary4 includes a"custodian" of a "financial asset"5who otherwise meets the definition of a securitiesintermediary.6 Critically, existing language in Section8-503(a) of the UCC outlines the ownership interest of a customerwhose cryptocurrency is held by an intermediary such as anexchange, if the exchange is a "securities intermediary,"has agreed with the customer to treat the cryptocurrency as a"financial asset,"7 and has credited thefinancial asset to a securities account.8 This is trueunder Article 8 even though the securities intermediary holds thefinancial assets in "fungible" form (i.e., theyare commingled).9 Article 8 in effect codifies thecommon law custodian rules for transactions within the scope ofArticle 8the customer of the custodian retains its propertyinterest and has a pro rata interest in the commingled assets heldby the custodian.

Proposed Amendments to the Uniform CommercialCode. Pending amendments to the UCC further implementthe rule that custodially held crypto assets should not be propertyof the bankruptcy estate in a bankruptcy of acustodian-cryptocurrency exchange. The drafting of amendments tothe UCC specifically to address certain cryptocurrencies and otherdigital assets is nearing completion and is expected to go to theStates for consideration in the Fall of 2022. Under theseamendments, cryptocurrencies would fit into a new category ofcollateral under the UCC, referred to as "controllableelectronic records" (a form of general intangible) (CERs),which would generally include information stored in a nontangiblemedium that can be subjected to control. Under these amendments,CERs will have many characteristics of negotiability similar tonegotiable instruments and securities; however, cryptocurrenciesordinarily will not be considered "money" for purposes ofthe UCC (that is, the amendment generally provides thatcryptocurrencies generally are not considered "money,"but a cryptocurrency created and adopted by a government as anauthorized medium of exchange could be "money" under theUCC).

Notably, the proposed amendments to the official comments toArticle 8 of the UCC primarily serve to make clear that asecurities intermediary and a customer of a securities intermediarycan agree to treat a cryptocurrency as a "financialasset" and credit it to a securities account with thetreatment described above.

The proposed amendments to the official comments in Section8-501(d) note that assets such as CERs might also be controlled bya securities intermediary outside of a securities account for thebenefit of a customersimilar to traditional securities, inwhich case the bankruptcy of the intermediary often times would notput in doubt the customer's ownership of securities in in thatcircumstance held by the intermediary:

[A]ssets such as controllable electronic records, controllableaccounts, and controllable payment intangibles also might beassociated with an intermediary as well as with its customer undera similar direct holding arrangement. . . . As with conventionalcertificated securities, whether an intermediary has created asecurity entitlement in favor of an entitlement holder or isholding a financial asset directly for a customer depends on thenature of the relationship and the nature of the rights of theintermediary and the customer with respect to the financialasset.

In addition, revisions to Article 9 of the UCC will provide thata security interest in a CER can be perfected the old fashionedwayby filing a financing statementor by obtaining"control" of the CER. Under current distributed ledgertechnology structures such as blockchain, a secured party normallywould normally obtain "control" of a cryptocurrency thatis a CER if the secured party has the private key. A secured partycan have control through a custodian that has control for thebenefit of a secured party. Where a securities intermediary and acustomer of a securities intermediary agree to treat acryptocurrency as a "financial asset"10 andcredit it to a securities account, the customer would have"security entitlement" related to the cryptocurrency, andthe secured party could obtain and perfect a security interest insuch security entitlement under existing procedures under Articles8 and 9 of the UCC.

A new Article 12 to the UCC is being proposed that includesprovisions addressing transactions in cryptocurrencies fallingunder the category of a CER, such as sales of the cryptocurrency.In these transactions, a buyer of a CER can take free of theproperty claims of others if the buyer obtains control of the CER(e.g., holding the private key), gives value, and does nothave notice of the property claims of others.

While the proposed amendments to the UCC have yet to befinalized and adopted by the States, many of the amendments to theUCC as they relate to the ownership interest of a cryptocurrencyexchange customer in custodially held cryptocurrency are proposedas amendments to the official comments, without revision to theoperative statutory provisions themselves because the existingstatutory provisions already provide for the described results.Thus, a bankruptcy court could rely on the existing state UCCstatute as a basis to determine that when cryptocurrency is held asa financial asset credited to customer accounts, the cryptocurrencyis property of the customer, rather than bankruptcy estate. This isthe same result outside of Article 8 as discussed above.

Crypto assets held custodially by an exchange or other entityfor a customer should be treated as the property of the customer.The analysis of when a "custodial" relationship existswill depend on the agreements and other facts in a particularrelationship.

Footnotes

1. See In re Joliet-Will Cnty. CommunityAction Agency, 847 F.2d 430, 431 (7th Cir. 1988) (Posner, J)("Did they constitute JolietWill a trustee,custodian, or other intermediary, who lacks beneficialtitle and is merely an agent for the disbursal of funds belongingto another? If so, the funds (and the personal property bought withthem, cf. In re Kaiser, 791 F.2d 73, 77 (7th Cir.1986)) were notassets of the bankrupt estate." (Emphasis added)).

2. See also Restatement (Third) of Restitutionand Unjust Enrichment 59 (property interest in assetcontinues in commingled assets when the interests can be traced).See also Illustration 26 (400 customers of smelter deliversilver to smelter, who keeps records of the amount of silverdelivered by each customer, refines the silver for a fee, andagrees to return a corresponding amount of silver to each customer;when smelter fails, each customer has a pro rata property interestin the refined silver, which is not the property of smelter); UCC 9-207(c)(3).

3. Joliet-Will, 847 F.2d at432.

4. "Securities intermediary" is defined inSection 8-102(a)(14) of the UCC.

5. "Financial asset" is defined in Section8-102(a)(9) of the UCC.

6. UCC 8-102(a)(14) and Comment 14.

7. See Section 8-102(a)(9)(iii) of theUCC.

8. Section 8-503(a) provides that "[t]o the extentnecessary for a securities intermediary to satisfy all securityentitlements with respect to a particular financial asset, allinterests in that financial asset held by the securitiesintermediary are held by the securities intermediary for theentitlement holders, are not property of the securitiesintermediary, and are not subject to claims of creditors of thesecurities intermediary, except as otherwise provided in Section8-511."

9. This rule is the same as the smelting exampledescribed above from the Restatement (Third) of Restitution andUnjust Enrichment.

10. A financial asset does not have to be a"security" (as defined in Article 8 of the UCC) to be afinancial asset. As long as the relationship between the securitiesintermediary and the customer creates a "securitiesaccount" (UCC 8-501, Comment 1), the securitiesintermediary and its customer (referred to as an "entitlementholder") can agree to have any asset treated as a"financial asset". UCC 8-102(a)(9)(iii).

The Other Side Of The Coin: Cryptocurrency AssetsIn Bankruptcy

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The Other Side Of The Coin: Cryptocurrency Assets In Bankruptcy - Fin Tech - United States - Mondaq

Charities warned to be cautious about using cryptocurrency – Third Sector

The Charity Commission has urged charity trustees to consider the risks of using cryptocurrency.

The commission told trustees that it was important to document their decision-making if they did decide to invest, or take donations, in cryptocurrency.

Sam Jackson, the commissions assistant director of policy, wrote in a blog this week: Trustees who do decide to dip their toes in the crypto water should document their decision-making carefully.

Remember that if problems arise, the commission might need to get involved, and well expect to see evidence that you fulfilled your legal duties and responsibilities and did not put your charitys assets including its reputation at undue risk.

Cryptocurrency, or crypto, is a digital currency designed for use as a medium of exchange that is not reliant on a centralised system, such as a bank or government, to maintain or uphold it.

Bitcoin became the first decentralised cryptocurrency when it was released in 2009. Cryptocurrencies use blockchain technology to secure and record transactions.

The commission stressed the importance of charities being able to identify donors, which it said can be tricky in the context of cryptoassets, as the blockchain relies on indeed in some ways is designed to guarantee anonymity and secrecy.

It said that trustees should take appropriate professional advice when considering investing in cryptocurrency, and encouraged trustees to read its publications on the core duties of trustees and its investment guidance.

The blog added: As things stand, we consider that trustees should think very carefully before investing in cryptocurrency, evaluating the benefits and risks as they would do with any important decision about their charity.

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Charities warned to be cautious about using cryptocurrency - Third Sector

Mastercard Ties Up With Fasset To Promote Cryptocurrency Adoption In Indonesia, Bitcoin Up – Outlook India

Mastercard has collaborated with Fasset, a crypto gateway provider, to develop digital solutions to help accelerate the promotion and adoption of cryptocurrency in Indonesia.

The collaboration aims to improve financial inclusion in Indonesia and provide new prospects for the local economy. According to Mastercard, the cooperation will boost community access to new technologies.

In June, Mastercard had expanded its network to non-fungible token (NFT) trades.

An official from Mastercard Indonesia has now said that the adoption of crypto assets in countries, such as Indonesia will have significant influence on the entire crypto ecosystem, and it would serve as an example to other countries seeking to progress and accelerate economic growth.

In other news, OpenSea, a non-fungible token (NFT) marketplace, has announced layoffs, blaming the prevailing crypto winter. During the present weak market scenario, numerous crypto asset businesses have disclosed similar layoffs. The cause for the layoffs, according to OpenSea CEO Devin Finzer, is an unprecedented mix of crypto winter and wider socioeconomic volatility.

By trading volume, OpenSea is the worlds largest NFT marketplace. The decrease in personnel indicates that the crypto industry is hurting, and platforms are struggling to stay afloat. According to INSIDER, crypto businesses have decreased their workforce by 1,700 people in June alone. Exchange titans, such as Kraken, FTX, and Binance have opted not to follow in the footsteps of other cryptocurrency corporations.

Crypto Prices

The price of Bitcoin in the cryptocurrency market rose by 0.02 per cent in the last 24 hours, and it was trading at $20,817.80 at 5:15 pm IST. According to Coinmarketcap.com, its dominance in the crypto market is currently at 42.56 per cent, down by 0.11 per cent in the last 24 hours.

Ethereum (ETH) was trading at $1,217.19, up by 0.06 per cent, while Binance Coin (BNB) was down by 0.20 per cent in the last 24 hours, and it was trading at $237.43. Solana (SOL) was down by 0.56 per cent to $37.82, while Cardano (ADA) was down by 0.44 per cent to $0.4374.

Meme Coins

Dogecoin was trading at $0.06333 at 5:15 pm IST, down by 0.20 per cent on Coinmarketcap.com. Its rival, Shiba Inu, was up by 0.68 per cent, and it was trading at $0.00001094. Samoyedcoin was up by 8.99 per cent, and it was trading at $0.008962, while Dogelon Mars was up by 5.80 per cent, and it was trading at $0.0000003141.

Overall Scenario

According to Coinmarketcap.com, the global crypto market cap was at $963.01 billion, an increase of 6.24 per cent in the last 24 hours, while the total crypto market volume was $90.34 billion, a decrease of 0.15 per cent.

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Mastercard Ties Up With Fasset To Promote Cryptocurrency Adoption In Indonesia, Bitcoin Up - Outlook India

The imperative need for machine learning in the public sector – VentureBeat

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The sheer number of backlogs and delays across the public sector are unsettling for an industry designed to serve constituents. Making the news last summer was the four-month wait period to receive passports, up substantially from the pre-pandemic norm of 6-8 weeks turnaround time. Most recently, the Internal Revenue Service (IRS) announced it entered the 2022 tax season with 15 times the usual amount of filing backlogs, alongside its plan for moving forward.

These frequently publicized backlogs dont exist due to a lack of effort. The sector has made strides with technological advancements over the last decade. Yet, legacy technology and outdated processes still plague some of our nations most prominent departments. Todays agencies must adopt digital transformation efforts designed to reduce data backlogs, improve citizen response times and drive better agency outcomes.

By embracing machine learning (ML) solutions and incorporating advancements in natural language processing (NLP), backlogs can be a thing of the past.

Whether tax documents or passport applications, processing items manually takes time and is prone to errors on the sending and receiving sides. For example, a sender may mistakenly check an incorrect box or the receiver may interpret the number 5 as the letter S. This creates unforeseen processing delays or, worse, inaccurate outcomes.

But managing the growing government document and data backlog problem is not as simple and clean-cut as uploading information to processing systems. The sheer number of documents and citizens information entering agencies in varied unstructured data formats and states, often with poor readability, make it nearly impossible to reliably and efficiently extract data for downstream decision-making.

Embracing artificial intelligence (AI) and machine learning in daily government operations, just as other industries have done in recent years, can provide the intelligence, agility and edge needed to streamline processes and enable end-to-end automation of document-centric processes.

Government agencies must understand that real change and lasting success will not come with quick patchworks built upon legacy optical character recognition (OCR) or alternative automation solutions, given the vast amount of inbound data.

Bridging the physical and digital worlds can be attained with intelligent document processing (IDP), which leverages proprietary ML models and human intelligence to classify and convert complex, human-readable document formats. PDFs, images, emails and scanned forms can all be converted into structured, machine-readable information using IDP. It does so with greater accuracy and efficiency than legacy alternatives or manual approaches.

In the case of the IRS, inundated with millions of documents such as 1099 forms and individuals W-2s, sophisticated ML models and IDP can automatically identify the digitized document, extract printed and handwritten text, and structure it into a machine-readable format. This automated approach speeds up processing times, incorporates human support where needed and is highly effective and accurate.

Alongside automation and IDP, introducing ML and NLP technologies can significantly support the sectors quest to improve processes and reduce backlogs. NLP isan area of computer science that processes and understands text and spoken words like humans do, traditionally grounded in computational linguistics, statistics and data science.

The field has experienced significant advancements, like the introduction of complex language models that contain more than 100 billion parameters. These models could power many complex text processing tasks, such as classification, speech recognition and machine translation. These advancements could support even greater data extraction in a world overrun by documents.

Looking ahead, NLP is on course to reach the level of text understanding capability similar to that of a human knowledge worker, thanks to technological advancements driven by deep learning.Similar advancements in deep learning also enable the computer to understand and process other human-readable content such as images.

For the public sector specifically, this could be images included in disability claims or other forms or applications consisting of more than just text. These advancements could also improve downstream stages of public sector processes, such as ML-powered decision-making for agencies determining unemployment assistance, Medicaid insurance and other invaluable government services.

Though weve seen a handful of promising digital transformation improvements, the call for systemic change has yet to be fully answered.

Ensuring agencies go beyond patching and investing in various legacy systems is needed to move forward today. Patchwork and investments in outdated processes fail to support new use cases, are fragile to change and cannot handle unexpected surges in volume. Instead, introducing a flexible solution that can take the most complex, difficult-to-read documents from input to outcome should be a no-brainer.

Why? Citizens deserve more out of the agencies who serve them.

CF Su is VP of machine learning at Hyperscience.

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