The Future of Money (Issue 76 - 16 Jan 2022): How Many Times Has Bitcoin Been Declared Dead? Kazakhstan's Impact on Bitcoin Mining? What is Avalanche?

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1. How Many Times Has Bitcoin Been Declared Dead?

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Many people have declared Bitcoin dead.

Source: The Guardian

There have actually been so many “deaths” announced that there is a website that keeps track of them.?

Bitcoin's "death" can be tracked at Bitcoin Obituary, a parody website that collates news articles and blogs.

The digital asset has already been declared dead publicly over 400 times since its launch and at least once since the start of 2022, not to mention a whopping 47 times in 2021, which was considered a breakout year for Bitcoin and other digital assets.

Source: 99bitcoins.com

But the highest number of "deaths" it recorded (124) was in 2017 when its market cap hit $100 billion for the first time.?

Whilst the most recent examples are often the most well-known, the early examples are probably the most interesting.?

For example, the first time Bitcoin was declared dead was when it was worth $0.23.?

Source: 99bitcoins.com

Another interesting time was in 2011 when Forbes called the death of Bitcoin when its price was $15 or when Wired wrote about the rise and fall of Bitcoin in 2013 when its price was hovering around $2.

There are also numerous recent examples.?

Last January, 82-year-old investor Jeremy Grantham said on Bloomberg that the asset had nil value (when Bitcoin’s price was around $33,000).

And in February, Nouriel Roubini argued that Bitcoin’s fundamental value was zero. (You can watch my FinTech Capsule interview with him where he makes that same argument here).

This drastic divergence of opinions is something that we should continue to expect over the coming years.

But that’s what makes following this space even more exciting!

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2. Will the Recent Events in Kazakhstan Impact Bitcoin Mining?

Kazakhstan has been in the news since the start of the month following the protests that erupted over increases to fuel prices on January 2.

?Why does this matter for the crypto community?

Following the crypto mining ban in China, many of the Chinese miners moved their operations to Kazakhstan.?

For example, whilst Kazakhstan had roughly 5% of the global mining hashrate a year ago, that figure ballooned to 18% following China’s ban on Bitcoin mining last June.?

These shifting figures mirror changing conditions on the other side of the planet, where the latest data shows that from August 2020 to August 2021, the United States' share of global Bitcoin mining grew from 4% to 30%.?

In that same span of time, China’s share of global Bitcoin mining plummeted from 67% to 0%.??

?Source: University of Cambridge

China’s ban on Bitcoin mining ultimately had a dramatic impact on the distribution of mining operations around the world.

?Source: University of Cambridge

It's important to understand that even if all of the Bitcoin mining operations in Kazakhstan went offline (which is unlikely), there would be minimal impact on the strength of the Bitcoin network, which has over 170m TH/s hashrate at the time of writing.?

?If the ban in China, where around 67% of Bitcoin mining took place until the ban, did not have an impact on the network, it was unlikely that any turbulence in Kazakhstan would have a noticeable impact at the network level.

However, these recent events will have an impact on the miners that have operations in Kazakhstan, forcing them to think more seriously about country and geopolitical risk moving forward.

?Who stands to benefit from this??

?Most likely North American and Scandinavian mining countries.

For example, the US and Canada already saw their respective share of global Bitcoin mining increase following the China ban, and we should not be surprised to see those percentages increase even more over the coming months following the unrest in Kazakhstan.

This move away from Kazakhstan could also be beneficial when addressing the Bitcoin mining ESG debate.

Let's not forget that Kazakhstan’s crypto mining farms are mostly powered by aging coal plants, which are terrible for the environment.?

?As electricity costs are broadly similar in the United States and Kazakhstan (around $0.04 per kilowatt), many of these miners may prefer to base their operations in the United States, which will help make Bitcoin mining greener.?

?Let's not forget that the majority of Bitcoin mining globally now uses renewable energy sources and that the percentage of renewable-powered Bitcoin mining is even higher in the United States.

?Source: University of Cambridge

Definitely a development to follow moving forward!

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3. What is Avalanche?

I often get messages from many of you asking whether I can explain in an easy-to-understand manner some of the other large coins in the crypto market.?

This is why I launched my “Crypto Deep Dive Series” on my podcast (The Future of Money), where I invite the CEO or the Chairperson of some of these various foundations to share more about their projects and communities with our audience.?

One recent episode was on Avalanche (and its AVAX coin), which has been getting increased attention from both the crypto and finance worlds of late.?

Launched after the foundation of Ava Labs in 2018 by several academics from Cornell University with extensive backgrounds in cryptography, Avalanche concluded its initial coin offering (ICO) in 2020 in less than 24 hours, hauling in $42 million along the way.?

?Designed to address some of the limitations of older blockchain platforms, including transaction speeds, centralization, and scalability, Avalanche’s unique consensus protocol promises low latency, low fees, high throughput capabilities, and resistance to 51% attacks, in addition to being eco-friendly, as the blockchain uses a proof-of-stake consensus mechanism.??

?The network’s speed is one of its biggest advantages.

For instance, unlike Bitcoin and its 7 transactions per second average (or Ethereum and its 14 transactions per second average), Avalanche can process up to 4,500 transactions per second.?

?Avalanche also provides almost instant finality (instead of waiting for a number of blocks of 10 minutes like in the Bitcoin blockchain, for example).?

Source: Ava Labs

The platform is built around Avalanche’s native utility token, AVAX, which is used for everything from paying network fees to staking in exchange for yield.

There is a hard cap of 720 million AVAX, of which about one-third are in circulation.?

?There are a number of developments to keep an eye on for those following the Avalanche ecosystem, especially the growth of projects around DeFi and NFTs.?

Source: Avalanche

Avalanche sees itself as an alternative to Ethereum, so it will be interesting to see how this develops over the coming months and whether the initial traction they have been getting will continue.

For anyone interested in learning more about Avalanche, I’d recommend listening to a recent podcast episode I had with Ava Labs President John Wu on everything from the history of the Avalanche network to the roadmap ahead.

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Henri Arslanian

*Please note that this newsletter reflects Henri’s personal views and not those of any organisation he is involved with.

Who is Henri?

Passionate and focused on the future of finance and money, Henri Arslanian is the PwC Crypto Leader and Partner, the former Chairman of the FinTech Association of Hong Kong, and an Adjunct Professor at the University of Hong Kong where he teaches the first FinTech university course.

Henri advises many of the world’s leading crypto exchanges, investors, financial institutions, and tech firms on their FinTech and crypto initiatives as well numerous governments, regulators, and central banks on Fintech and crypto regulatory and policy matters.

With over 500,000 LinkedIn followers and 45,000 newsletter subscribers, Henri is a TEDx and global keynote speaker, a best-selling published author, and is regularly featured in global media including Bloomberg, CNBC, BBC, CNN, The Wall Street Journal, The Economist and the Financial Times.

Henri was named by LinkedIn as one of the global Top Voices in Economy & Finance and is the host of the FinTechCapsules? and CryptoCapsules? social media series.

Henri was recently named by Onalytica as the #1 most influential individual on Finance globally on LinkedIn out of 50k+ individuals working at the top professional services and management consulting firms in the world.

Chambers Global named Henri the “highest-profile FinTech consultant in Hong Kong”, Blockchain Asset Review named him the “Most Influential Crypto and Blockchain Thought Leader in Asia”, and Asian Private Banker awarded him the “FinTech Changemaker of the Year” award.

Henri’s latest book “The Future of Finance: The Impact of FinTech, AI and Crypto on Financial Services” published by Palgrave Macmillan, was ranked as one of Amazon’s global top 10 best-sellers in financial services and was recognized as one of the “Best FinTech Books of All Time” by Bookauthority.

Before joining PwC, Henri was with a FinTech start-up and previously spent many years with UBS Investment Bank in Hong Kong. Henri started his career as a financial markets and funds lawyer in Canada and Hong Kong.

Henri speaks five languages including English, French, Armenian, Spanish, and Mandarin Chinese.

He holds a Masters in Chinese Law from Tsinghua University; a joint Global Executive MBA from Columbia Business School, London Business School, and Hong Kong University; a Bachelor of Law from the University of Montreal (Dean’s List of Excellence) and a Masters in Transnational Law from the University of Sherbrooke, where he was awarded the Governor General of Canada Gold Medal for Academic Excellence for having graduated with the highest grades of the university.

You can learn more about Henri on his website (www.henriarslanian.com) and you can reach him at [email protected]