The deputy governor of the Bank of Spain, Margarita Delgado, gave her opinion about cryptocurrencies and how they are increasing the risks in todays economy. At an event hosted by PWC called A climate of change, Delgado explained that the continued and extended use of cryptocurrencies might bring different kinds of risks to the 12% of the population currently holding crypto.

The deputy governor of the Bank of Spain, Margarita Delgado, has issued her opinion about the use of cryptocurrencies and how they might affect the countrys economy. The statements were offered in a speech given at an event hosted by the multinational professional services network PWC, called a climate of change, which centered its focus on the changing nature of the financial world.

The deputy governor stated that the extended use of cryptocurrencies brings a series of risks to the system, including the general lack of knowledge that the people using these assets have on the subject. Amongst the other risks are the obscurity linked to the decentralized finance segment, which can incite over-leveraging and cause payment problems. On the effects that the crypto segment might bring into other markets, Delgado detailed:

Its high volatility can have a contagious effect on other markets, due to the panic and overreaction that can be transferred to other trading environments.

Delgado also made reference to the effect that investing and holding cryptocurrency assets might have on traditional banking, due to the rise of a mixed sector that offers both services to its customers. She stated that the introduction of the assets would create a very relevant increase in the patrimonial and reputational risks.

The Bank of Spain has already raised the alarms when it comes to traditional banks introducing cryptocurrency-based services to customers. The governor of the Bank of Spain talked about the dangers of this association in his appearance at the II Finance Observatory in February, stating in the same way that this exposure to cryptocurrency assets would bring new risks to the banking sector.

Finally, Delgado estimates that 12% of Spanish citizens possess some kind of cryptocurrency asset, so this kind of debate must be raised in order for them to ascertain the whole picture on the subject of crypto. On this, she concluded:

It would be necessary to check whether these investors are fully aware of the risks to which they are exposed or have simply been pushed by expectations of extremely high revaluations.

What do you think about the remarks made by Margarita Delgado on the risks that cryptocurrencies could bring? Tell us in the comments section below.

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Bank of Spain Warns About Risk of Extended Use of Unregulated Cryptocurrencies in the Country Bitcoin News - Bitcoin News

Bitcoin is a decentralized digital currency that is exchanged between two parties without involving intermediaries like banks or other financial institutions.

As defined in a whitepaper released by the hidden inventor of Bitcoin, Satoshi Nakamoto, Bitcoin is a purely peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution.

To understand Bitcoin, one needs to understand the underlying structure, the manner of operation of the Bitcoin ecosystem and the extent of usage of the same in India.

Bitcoin achieves elimination of intermediaries with the help of its underlying technology, blockchain.

Currently if you have to transfer funds to someone, one of the possible ways is by giving cash or alternatively use a trusted intermediary (example, a bank). Both the mechanisms, whether it be physical cash (with the central bank of the country as the guarantor) or electronic transfer, involve an intermediary (in the later case, a bank or another financial institution). When intermediaries are involved, there are transaction costs.

How the blockchain technology helps achieve elimination of intermediaries is by replacing trust that intermediaries bring to the table with cryptographic proof by the use of CPU computing power.

This cryptographic trust is built into Bitcoin through a wallet, a public key and a private key in the program.

Anyone can create a Bitcoin wallet for free by downloading the Bitcoin program. Each wallet contains a public key and a private key.

The public key is like an address or an account number via which any person can receive Bitcoins.

A private key is like a digital signature via which a person can send Bitcoins. The name suggests that private keys should be only held and known by the owner and public keys can be shared with anyone for receiving Bitcoins. That is where you would have heard in the news about Bitcoins being lost either due to a private key not being accessible or stolen by hackers.

Owners of Bitcoin addresses are not explicitly identified, but all transactions on the blockchain are public.

Since the inception of Bitcoin in 2009, each and every transaction that has occurred is stored in a ledger, which is considered immutable, non-tamperable and irreversible.

Bitcoin transactions are verified via telecommunication network nodes through cryptography and are then recorded in a decentralized distributed ledger called blockchain. This is one of the distinguishing aspects of Bitcoin from some other crypto assets, where there is centralized exchange (like the stock exchange) through which all transactions need to be routed or validated.

In the Bitcoin ecosystem, there is a network of miners who use their CPUs to process transactions.

The program is built in such a way that the ledger or the blockchain is automatically updated.

As per the original whitepaper on Bitcoin, the probability of hackers tampering the blockchain is next to zero due to the copy of updated ledger each miner carries. If someone is trying to tamper or hack the ledger by any means to gain unfair advantage, then immediately the miner is considered invalid and fails to process transactions until they have a copy of the untampered ledger.

It is debatable whether Bitcoin is a currency at all and why any country would want to replace it with their existing currency as Bitcoin does not have any intrinsic value of its own.

By definition, a currency is a system of money in general use in a particular country, or the fact or quality of being generally accepted or in use. Currently, there is some traction in the number of companies using Bitcoin as a mode of payment, however, no major country or economy has accepted it as money in general use. An exception is El Salvador, which adopted Bitcoin as a legal tender in September 2021 and became the first country to do so.

One of the important reasons for the remarkable evolution of Bitcoin is the tightening of the know your customer (KYC) and anti-money laundering (AML) regulations by banks and financial institutions. There is now a much greater cross-border exchange of information between the countries about the transactions through the banking system.

As a result, it is also claimed that Bitcoins are widely used as a parallel mechanism for the transactions, which would otherwise be illegal in several countries.

Another important aspect is the acceptability of Bitcoin as a global payment mechanism, which is not linked to any particular countrys currency and hence, not directly impacted by the developments within a particular country.

On the regulatory front, India saw two major developments this year:

In February 2022, in India, the Indian government proposed to introduce taxation on virtual digital assets, which would imply a taxation system for cryptocurrencies, but there is no clarity on whether the Indian government finds cryptocurrencies legal either as asset or currency.

Indias Finance Minister has categorically stated since then that taxing cryptocurrencies doesnt mean legalizing them. This indicates the government is still evaluating all the factors associated with cryptocurrencies and it would be early to make any assumptions on their legality.

Even though India has not specified its stand on the legality of investment in Bitcoin, the recently announced Budget 2022 vide Finance Bill 2022 proposes to introduce a framework for taxation of virtual digital assets. Once, the Finance Bill is ratified into an Act, the said framework would be made effective for Financial Year 2022-2023 onwards.

The taxation as per the Budget 2022 proposal would be taxation of gains at the rate 30% on transfer of Bitcoin.

The Government has proposed to introduce a new section 115BBH in the Income Tax Act, 1961 (the IT Act) for taxation of income from transfer of virtual digital assets. In accordance with the said section, where the total income includes any income from transfer of any virtual digital assets, the said income would be subjected to a tax rate of 30% and such rate would be enhanced by an applicable surcharge rate, if any, and a health and education cess.

As per Section 2 (47) of the IT Act, virtual digital assets would mean any information, code or number or token (not being Indian currency or foreign currency), generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value or functions as a store of value or a unit of account including its use in any financial transaction or investment, but not limited to investment scheme and can be transferred, stored or traded electronically.

Thus, the definition of virtual digital assets is quite wide so as to include all forms of cryptocurrencies including Bitcoin.

Hence, it is safe to comprehend, any gains derived from the transfer of Bitcoins would be subject to a tax rate of 30% (plus applicable surcharge rate and health and education cess), which can result in an effective tax rate ranging from 31.2% to 42.7%.

The proposed provisions specifically states that any deduction in respect of expenditure (other than cost of acquisition) incurred by the assessee in relation to such digital assets will not be allowed while computing the gains from transfer of such assets. In simple terms, only the cost of acquiring the digital assets i.e. Bitcoin will be allowed as a deduction.

In case a person obtains a Bitcoin by way of mining, the same may be treated as self-generated capital assets. However, the provisions of Section 55 of the IT Act, which provides for computation of cost of acquisition of self-generated assets does not specifically provide for such a computational method for cryptocurrency.

Thus, clarification with respect to computation of acquisition cost of Bitcoins when obtained through mining is required to be provided.

Also, if a person obtains a Bitcoin as a gift, the recipient of the Bitcoin will be liable to tax in India and accordingly the definition of property under Section 56(2)(x) has been revised to include virtual digital assets within its ambit. The provision further restricts the taxpayer or the teh investor to set off the loss from transfer of virtual digital assets against any other income.

The Budget 2022 also proposed to impose withholding tax on transfer of virtual digital assets under Section 194S of the IT Act. Accordingly, with effect from July 1, 2022, any person responsible for paying to a resident any sum by way of consideration for transfer of a virtual digital asset i.e. Bitcoin, will deduct tax at source of 1% at the time of credit of such sum to the account of the resident or at the time of payment, whichever is earlier.

Such withholding would be subject to the following monetary limits:

The provisions for taxation of virtual digital asset (except TDS) are proposed to be effective from April 1, 2022 i.e. Financial Year 2022-23 and onwards. However, there is no clarity with respect to the taxation of crypto assets which the taxpayers would have transferred or sold or gifted upto the financial year 2021-22.

Several taxpayers have treated Bitcoins as an asset and treated the capital gain as short term or long term (with indexation benefit) depending on the period of holding and paid tax based on the concessional tax rate or normal slab rates, as the case may be.

While there is a lot of uncertainty and volatility over the prices of Bitcoin and its legality in India, it is certain that the blockchain technology promises a whole lot of innovation and way in which transactions are settled.

If you are looking to invest in Bitcoin, you need to bear in mind that only those investors who have a high-risk appetite should consider a part of the portfolio to be invested in Bitcoins. This is due to downside price risk, high tax on the gains from sale of Bitcoins in India, a possible goods and services (GST) tax exposure and the uncertainty arising out of the legal status of Bitcoins in India.

In case of investors who already hold Bitcoins, there is no need to panic as even in the case of any regulatory ban, it is likely that transitional provisions for sale would be made. Those who had invested in Bitcoins and sold the same but have not reported the profits in their tax returns must go ahead and declare their investments.

Excerpt from:
What Is Bitcoin and How Does It Work? - Forbes

There is no limit when it comes to the amount of pods that owners can combine to make their dream home.

Owning the landor any assets on Satoshi Island, for that matterare possible only through NFT ownership, which may seem like a bit of a security risk, but Satoshi Island has a system in place that makes the process of buying and selling NFTs easy: A beneficiary is similar to the concept of a last will and testament, but without a third party to authorize transfers. Otherwise, there are trustees who the holder nominates to act as a co-signer. The NFT system, especially when its used in this kind of way, is actually quite traditional.

All of this will be a reality within the next few months when land NFTs will start to be released in phases. There are seven collections of land, each of which represents a different parcel on the island, and theyll be released one by one. The first collection, which comprises 562 blocks of land, will be on Satoshi Islands south wing, for instance.

Satoshi Island will be home to an expansive collection of modular homes and office buildings made of sustainable materials.

For those wanting to take a more active role in the community, consider the fact that Vanuatu has no tax on profits, dividends, or income for neither corporations nor individuals. There is also no capital gains tax, withholding tax, or death tax either. That, along with the pristine tropical environment, explain why Satoshi chose this specific location to fulfill their ambitious new way of life. Theres even a specific amount of land that the island has reserved for crypto-specific projects. And companies of any sizewhether its just a few people or hundredscan set up their headquarters there.

Satoshi Island may be small in size, but its ambitions for the future are rather massive, and this is just the beginning. The crypto community is slowly taking over the world, one small region at a timeand maybe its not such a bad thing. If theres one hard truth, its that time will surely tell.

Read the original:
This Tropical Island Is Developing Into the Worlds First Bitcoin Economy | Architectural Digest - Architectural Digest

Carl Runefelt, better known within the crypto community and perhaps beyond it for his social media name The Moon is one of the most popular influencers in the field. He has over 500K subscribers on YouTube and has recently crossed the one million followers milestone on Twitter.

From wild Bitcoin predictions to million-dollars NFT buys, to his recent payment app Kasta, and what he thinks about the criticism he received from his community after showing his new Bugatti while the market was starting to crash in December 2021.

Runefelt started his Youtube channel in 2017. Before diving into crypto, he was working at a groceries store in Sweden where hes originally from.

I was working at a groceries store in Sweden. I wasnt very happy with my life I thought it was a bit boring. I felt that I wasnt doing what I was supposed to do.

It was the Law of Attraction and how visualizing his goals helped him achieve the lavish lifestyle that he lives today in Dubai.

Before getting into crypto, he was investing the money he had in physical gold and silver. As a 22-year old who was starting his career, it was the inefficient banking system that had him looking for an alternative.

I was looking for ways to make money on the stupidity and the corruption of the central bankers and I thought that was gold. But then I saw one YouTube video someone had made a video about YouTube and I saw it and I just immediately thought it was extremely interesting.

Thats when TheMoons channel was born. Now, hes an investor in crypto, but hes also doing anything imaginable in the industry, from providing liquidity and farming yields to investing in startups and co-founding his own project Kasta, which is a payment app. Kasta comes as an alternative to traditional payment solutions that are part of the system that Runefelt wanted to stand against.

In December 2019, CryptoPotatohad an interview with The Moon. He then predicted that BTCs price would go to $200,000 as a great hedge against inflation. Back then, the price was hovering around $7,000.

Since 2019, and especially around the COVID-19 March 20 crash, we saw Bitcoin trading heavily in correlation with the global markets, putting the narrative to question in many peoples view.

Nowadays, he maintains that Bitcoin is still a fantastic hedge against inflation.

Bitcoin is the scarcest asset in the whole universe. There is nothing out ther that can compete. However, in the short-term, if you have the stock markets completely collapsed, obviously everything will crash. Its just how markets work.

I think that long-term, Bitcoin is uncorrelated to the stock market and other markets out there.

Discussing the possibility of bitcoin going to zero, TheMoon strongly refuted it and even said that he thinks BTC is never going back down below $10,000.

I would suggest that its very likely that Bitcoin is going way above a million dollars. I think that even $10 million is where BTC is going.

Speaking on his 2019 prediction, Runefelt believes that $200K in the next three years is very possible.

Runefelt has been very vocal about spending $1 million for his CryptoPunk NFT.

The CryptoPunk I did buy, kind of at the top of the market, and that was a stupid mistake.

I kind of regret that I bought it because first of all, I paid a million dollars for it which is way too much for a JPEG, you can say. I have no clue of what its value is right now and I try to maximize its value by at least trying to do some promotion out of it.

At the end of 2021, while the crypto markets saw sharp declines, Runefelt shared on his Twitter profile that he bought a new Bugatti his dream car after selling some of his ETH. Many people criticized the move and hinted that it was done to brag.

In response to this, he explained that the decision came after seeing how much money he made out of Ethereum and that it was time to take some profits and buy his dream car.

I had a bunch of money that was stored in Ethereum and I thought why not take some profits, why not buy something that Ive been dreaming of for years now?

He argued that none of it is to brag but rather to inspire other people. Did he convince his followers? Time will tell.

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.

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Carl The Moon Runefelt: Bitcoin Will Never Go Below $10K Again (2022 Interview) - CryptoPotato

This article is a writeup of the fourth episode of CRYPTOLAND, Motherboards documentary series about how cryptocurrency is affecting culture, politics, the environment, and our shared future.Watch it on Motherboards YouTube.

Ebet Kuefler got into Bitcoin relatively early, in 2013, when it was still possible for individuals like him to mine the cryptocurrency at home. At some point, he said, his rig was mining one Bitcoin a day.

I didnt have to run the heater because this thing was kicking off massive heat all day, turning electricity into dollars, he told Motherboard.

In the end, he sold all but seven Bitcoin, and then forgot all about it until 2017, when the cryptocurrency hit $20,000. At that point he thought that was a good opportunity to cash outexcept he couldnt remember the 24 character complex password that protected his crypto wallet containing his Bitcoin. He said he had written it down in a notebook, but he had taken the password in a physical password wallet, which was stolen on a trip to Cuba.

Kueflers story isnt special. There are hundreds of people like him. Its hard to know exactly how much Bitcoin is locked forever in wallets whose owners forgot the password, or in hard drives thrown out. Theres plenty of anecdotes of desperate people trying to recover their lost Bitcoin. Chainalysis, a firm that tracks cryptocurrencies to help companies and law enforcement, estimated in 2018 that up to 23% of all Bitcoin is lost foreveraround 3.79 million bitcoins or the equivalent of around $170 billion at todays conversion rate.

Naturally, some of the people who own those lost Bitcoin are willing to do anything to get them back. And theres a market for companies or individuals who promise to recover the lost Bitcoin for a fee.

Theres the mysterious Wallet Recovery Service, run by an anonymous person who goes by DaveBitcoin, or Crypto Asset Recovery, a father and son startup based in New Hampshire.

In essence, what these organizations do is try as many password or passphrase combinations as fast as they canor as fast as their password cracking software and hardware will allowuntil they get the right one for a specific wallet theyre trying to break into. They brute force the password, but they need help from their customerssome guess, at least, of what their password may have been.

Charlie Brooks, the son in the duo that runs Crypto Asset Recovery, told Motherboard that their success rate is 32 percent, without counting those customers that they believe have almost no chance of getting their Bitcoin back (who they decline to take on as clients).

When you have a client with a password that is lets say 20 character computer generated password, that is essentially uncrackable Brooks said. Maybe given a hundred or two hundred years of compu powermaybe it will get it. But the chances are infinitesimal to none.

As for Kuefler, his Bitcoins were eventually saved by DaveBitcoin, who provided the right password to unlock his long lost crypto wealth.

Subscribe to our cybersecurity podcast, CYBER. Subscribe to our new Twitch channel.

Read the original:
This Father-Son Team Helps People Brute-Force Their Lost Bitcoin Wallet Passwords - VICE

What happened: A Bitcoin BTC/USD whale just sent $94,460,793 worth of Bitcoin off Coinbase.

The BTC address associated with this transaction has been identified as: bc1qcsrftacun0m3gjqmukvx32dr5w78yd5j8la28j.

Why it matters: Bitcoin "Whales" (investors who own $10 million or more in BTC) typically send cryptocurrency from exchanges when planning to hold their investments for an extended period of time. Storing large amounts of money on an exchange presents an additional risk of theft, as exchange wallets are the most sought-after target for cryptocurrency hackers.

The best way to secure Bitcoin is through holding it on a hardware wallet, which can't be done through holding digital assets on an exchange. Hardware wallets store one's private keys in an offline device, making it impossible for funds to be hacked via the internet.

According to Glassnode, only 13.06% of the total supply remains liquid across all centralized exchanges.

The removal of BTC from an exchange reduces potential sell side pressure, allowing the price of Bitcoin to increase more easily.

See Also: Best Crypto Apps 2021 and Best Crypto Portfolio Trackers

Price Action: Bitcoin is down -1% in the past 24 hours.

See Also: How To Buy Bitcoin

Public Blockchain data sourced from Whale Alerts Twitter.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

The rest is here:
Bitcoin Whale Moves 2,000 BTC Off Coinbase - Benzinga - Benzinga

Bitcoin investment companies Seetee and Ten31 announced a partnership meant to strengthen infrastructure and development of the protocol by investing in projects, companies and founders within the Bitcoin ecosystem.

Seetee will become Ten31s lead investment partner while each company maintains their own investments. Having invested in over 20 Bitcoin companies collectively, furthering the development of open-source projects through grants and direct investments, their collaborative efforts are set to drive innovation in the space.

"We are delighted to establish this partnership with Seetee, which is based on shared values and vision for the space, and an ultimate trust in working with high quality people of the highest integrity," said Grant Gilliam, co-founder and managing partner of Ten31.

The venture partner alumni of Ten31 includes quite a few notable names. Among them are Marty Bent, author of Martys Bent, a newsletter discussing the technical and cultural whirlwinds of Bitcoin and host of Tales From the Crypt, a similarly-focused podcast; and Matt ODell, a Bitcoin and open-source advocate host of the Citadel Dispatch show and co-host of Rabbit Hole Recap.

The importance of notating involved investors in this venture cannot be understated, as Seetee falls under the banner of the industrial investment company known as Aker, which has historically focused on oil and gas, renewable energy and green technologies, and other related environmental or industrial uses, meaning Bitcoin was for the most part not the focus.

Seetee was created under the Aker banner in 2021 so that they could specialize within the Bitcoin ecosystem. As they partner with reputable investors in the space, it allows would-be investors of their projects to know the cumulative shared values of its participants.

"There is strong long-term alignment between the two organizations, and we couldn't ask for a better strategic partner than Seetee," said Jonathan Kirkwood, co-founder and managing partner of Ten31.

Original post:
Ten31 Partners With Seetee For Powerhouse Bitcoin Infrastructure Investment Initiative - Bitcoin Magazine

Bitcoin down, trading above Rs 34.44 lakh

Cryptocurrencies were trading in the red early on April 1. The global crypto market cap was $2.05 trillion, a 4.88 percent decrease over the previous day. The total crypto market volume over the last 24 hours was $131.94 billion, a 16.84 percent increase. The total volume in DeFi is $19.97 billion, 15.14 percent of the crypto market's 24-hour volume. The volume of all stable coins is now $109.15 billion, which is 82.72 percent of the crypto market's 24-hour volume. Bitcoin's price is Rs 34.44 lakh with a dominance of 41.48 percent. This is a 0.11 percent decrease over the day, as per CoinMarketCap data. Except stablecoin tether (up 1.7 percent), all major cryptos on our list have slumped. Polkadot nosedived 6.06 percent, while dogecoin is down 5.89. These were followed by cardano, down 5.16 percent, Binance (4.89 percent), XRP (4.37 percent), bitcoin (4.09 percent) and ethereum was down 3.84 percent. Read full here

Excerpt from:
Top cryptocurrency news on April 1: The biggest moves in bitcoin, crypto hiring and more - Moneycontrol

A view of the Exxon Mobil refinery in Baytown, Texas.

Jessica Rinaldi | Reuters

ExxonMobil, the top oil and gas producer in the U.S., is piloting a project to mine bitcoin in North Dakota, according to people with knowledge of the matter.

For over a year, Exxon has been working with Crusoe Energy Systems, a company based in Denver, said the people who asked not to be named because details of the project are confidential. Crusoe's technology helps oil companies turn wasted energy, or flare gas, into a useful resource.

Similar to ConocoPhillips' mining scheme in North Dakota's Bakken region, Exxon is diverting natural gas that would otherwise be burned off into generators, which convert the gas into electricity used to power shipping containers full of thousands of bitcoin miners. Exxon launched the pilot in late January 2021 and expanded its buildout in July.

While Exxon hasn't talked publicly about its work in the space, Eric Obrock, a 10-year veteran at the company, said on his LinkedIn profile that from February 2019 to January 2022, he "proposed and led the first successful commercial and technical demonstration of using Bitcoin Proof-of-Work mining as a viable alternative to natural gas flaring in the oil patch."

Obrock's title on his profile is NGL industry outlook advisor, referring to the natural gas liquids market. Obrock told CNBC through a LinkedIn message that he's been advised that he can't speak to the media on this topic. Exxon didn't respond to a request for comment.

Exxon's bitcoin project isn't really about making money from the cryptocurrency. Rather, the company has pledged to reduce emissions as part of an industrywide effort to meet higher environmental demands. In early March, Exxon joined other oil companies in committing to the World Bank's "Zero Routine Flaring by 2030" initiative introduced in 2015.

The type of crypto mining arrangement it's pursuing with Crusoe reduces CO2-equivalent emissions by about 63% compared with continued flaring.

Exxon's bitcoin mining work in North Dakota was first reported by Bloomberg, which said the company is also considering similar pilots in Alaska, theQua Iboe Terminalin Nigeria, Argentina'sVaca Muertashale field, Guyana and Germany.

The problem Exxon and Conoco are addressing has existed for years: What happens when drillers accidentally hit a natural gas formation?

Unlike oil, which can be trucked out to a remote destination, gas delivery requires a pipeline.If a drilling site is close to a pipeline, producers can sell it right away. But if the pipe is full or if the gas is 20 miles away, drillers often burn it off. That's why you typically see flames rising from oil fields.

In addition to the environmental hazards, drillers are also burning cash.

Enter bitcoin mining, which only requires an internet connection and can be done from anywhere.And because miners' primary variable cost is energy, they're incentivized to find the cheapest sources of power.

"This is just a great way to bring that demand to the wasted energy and solve two problems at once," said Cully Cavness, president of Crusoe, whose backers include Valor Equity Partners, one of Tesla's largest investors. "Solve the energy appetite of bitcoin and solve the stranded energy, flare gas problem for the energy industry."

Cavness said Crusoe has 150 employees and works with Norway's Equinor ASA, Canadian oil producer Enerplus and Devon Energy, based in Oklahoma City.

Permits from North Dakota's Division of Air Quality show Crusoe can run 20 portable engines, with 11 currently in use at well sites across the state. Two of the engines are operational at wells run by XTO Energy, Exxon's oil and gas fracking subsidiary, at the Jorgenson Deep Creek Site. Cavness said most of Crusoe's 80-plus data centers are deployed in the Bakken.

"We're really moving the needle on flared volumes," Cavness said. "More than 10 million cubic feet of gas per day that would be flared is not flared because we've deployed our systems."

The World Bank, in its most recent Global Gas Flaring Reduction Partnership report, recognized Crusoe as offering an innovative solution to flaring.

The Bakken formation became an important source of new oil production in the U.S. in the last couple decades with the boom in hydraulic fracturing, or fracking.

Craig Thorstenson has been working at the permitting program at North Dakota's Division of Air Quality since 1989. He says North Dakota has always been an oil state to some extent, but growth in the Bakken lifted the state to second in the country, before it slipped to third last year.

Thorstenson, who was born and raised in Bismarck, the state capital, said the change "was quite a shock for us." Residential housing couldn't keep up with demand.

"We were having a population boom," Thorstenson said. "People coming in, wanting to get jobs. People living in the Walmart parking lots."

More drilling meant more wasted gas, which affected the entire Williston Basin that spreads across part of Montana, the Dakotas and into Canada. That's a big reason why Crusoe invested heavily in the area.

"At points in not-that-distant history, the basin was flaring almost up to a fifth of the gas that was being produced there," said Cavness.

Thorstenson said the amount of wasted natural gas is finally trending lower. In a March report, North Dakota's Department of Natural Resources estimated that currently 93% to 94% of natural gas is being captured. In 2014, the commission had a capture goal of 74%.

Drillers have historically chosen flaring as a way to dispose of excess gas because it's less damaging to the environment than venting, which releases methane directly into the air and produces greenhouse effects that have proven to be 84 to 86 times as powerful as CO2 over a 20-year period.

Even with flaring, some methane does escape due to wind and other factors.On-site bitcoin mining can be especially impactful, because 100% of the methane is combusted and none of it leaks or vents into the air, according to Adam Ortolf, who runs business development in the U.S. for Upstream Data, a company that manufactures and supplies portable mining solutions for oil and gas facilities.

"Nobody will run it through a generator unless they can make money, because generators cost money to acquire and maintain," Ortolf said. "So unless it's economically sustainable, producers won't internally combust the gas."

Crusoe's systems are built to make the process financially viable for drillers. The company brings its equipment onto the oil pad, allowing it to convert otherwise wasted natural gas into electricity, which then powers computing at the well site.

"When we put it through our generator, we get up to 99.9% combustion of that methane," Cavness said. "Not only are we using the otherwise wasted energy, we're also significantly reducing methane emissions."

Cavness said his main takeaway from the United Nations' latest global climate summit in Glasgow, Scotland, was that methane is the low-hanging fruit.

"That's the thing we want to solve as an energy industry," he said.

WATCH: Texas crypto miners power down to ease grid pressure

Original post:
Exxon is mining bitcoin in North Dakota as part of its plan to slash emissions - CNBC