There are plenty of good reasons to be skeptical of Bitcoin and other digital currencies.
In addition to critics who see nothing but a shared delusion over imaginary value, the cryptocurrency space is rife with fraud and scams, from complex operations to compromised online wallets to old-fashioned pump-and-dump schemes.
Yet digital currencies have increasingly drawn interest from even the most staid institutions. Just last week JPMorgan Chase introduced cryptocurrency trading on its platform. Late rumors that Amazon might accept Bitcoin payments (or even launch its own coin) have boosted crypto markets. And the nations of El Salvador and Venezuela, with troubled economies, are turning to cryptocurrencies as possible pathways to stability.
I say digital currencies are here to stay. But before investing or even just dabbling, the first step should be to understand them.
Two months ago I shared that the state of Hawaii, which is itself learning to navigate these waters, was launching a series of free online presentations for the public to help them understand digital currencies.
On Wednesday one of the most credible criticisms of Bitcoin and other altcoins will be addressed head-on: the impact crypto mining has on the environment.
At the heart of every cryptocurrency, and any cryptographic process, is math. While that provides irrefutable proof of the ownership of a coin, or token, generating them and processing the immense blockchain ledger that tracks them requires massive computer power.
At its inception a Bitcoin could be “mined” by a basic home computer. Today the computing resources required are so massive, the amount of electricity used to power the computers and their cooling systems can exceed that of entire nations.
Scientists are coming up with staggering measurements of how crypto mining is driving fossil fuel consumption, air pollution and adverse effects on human health.
Obviously, Hawaii is especially vulnerable to a degraded global environment, and left unchecked, this power-hungry process to generate wealth could destroy something far more priceless. In fact, given the price of energy, Hawaii is also among the most expensive states in which to mine Bitcoin.
It might not have to be that way.
In “Bitcoin, Energy, and Hawaii,” UH grad and cryptocurrency entrepreneur Nathaniel Harmon dares to propose the opposite: embracing Bitcoin to reduce fossil fuel consumption, reduce the cost of energy in the islands and push the state toward its goal of 100% renewable energy.
That’s not all: He sees cryptocurrencies as a way to reduce Hawaii’s reliance on tourism.
Harmon combined his academic expertise (a master’s degree in marine geology and geochemistry) with his passion for cryptocurrency to found Blockchain Solutions Hawaii. And lest you doubt his environmental bona fides, he and his wife, Kristen, also run the Hawaiian Islands Conservation Collective, aimed at harnessing locally educated scientists to restore native ecosystems.
His virtual presentation via Zoom will begin at 9 a.m. Wednesday. Register today at bit.ly/hicrypto.
Next month, three presentations will be led by Liam Grist of Cloud Nalu, based on Maui.
Grist is building Cloud Nalu into a Bitcoin brokerage and services platform for Hawaii. The startup was one of the few local companies accepted into the Digital Currency Innovation Lab, a “regulatory sandbox” created by the state Department of Financial Institutions in partnership with the Hawaii Technology Development Corp.
On Aug. 12, Grist will explore the wider universe of cryptocurrencies beyond Bitcoin, including Etherium, Dogecoin, Chainlink and Polkadot. If you’ve never heard of them, that’s OK. Grist says there are more than 9,000 out there.
On Aug. 19 the topic is “Using Bitcoin for Business,” including the tax and accounting implications for doing so. And on Aug. 26, Grist will cover the Bitcoin Lightning Network and joining a Bitcoin Lightning node.
To register for these webinars, visit sandboxhawaii.org/events.
Ryan Ozawa covers Hawaii’s tech and startup scene and hosts the Hawaii Slack tech community chat group. Have a question or a story to share? Email him at hawaii@hey.com.
