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Bitcoin’s hash rate plummets as Twitter and Tidal make NFTs hot again
With most of Bitcoin's hash rate on the move, Michael Saylor and the Bitcoin Mining Council have claimed that the foremost cryptocurrency is primarily powered by sustainable energy.
It's been a testy week in the blockchain and cryptocurrency world. As the Bitcoin hash rate experiences its worst drop in history, the newly formed Bitcoin Mining Council has claimed that global Bitcoin mining is primarily powered by sustainable energy. Meanwhile, social media giant Twitter has dropped some nonfungible tokens to users while music-streaming service Tidal — which is majority-owned by Twitter CEO Jack Dorsey's Square — is taking an interest in NFTs.
Here's everything you need to know about these stories, and more, in this week's edition of OKEx Insights' News of the Week.
Bitcoin Mining Council publishes sustainable energy report
The newly formed Bitcoin Mining Council has published its first estimates for the Bitcoin network's energy mix.
The report concludes that "the members of the BMC and participants in the survey are currently utilizing electricity with a 67% sustainable power mix" — while also extrapolating that global Bitcoin mining uses 56% sustainable power.
- Like the Bitcoin Mining Council, itself, the new report has drawn criticism from many. Primary concerns include the survey being primarily focused on BMC members, the voluntary nature of the survey, the failure to define sustainable electricity, the neglect of the ongoing mass relocation of mining from China to other countries, and the general lack of oversight. The report itself even notes that the "Estimated global Bitcoin network annualized power [is] based on BMC analysis, assumptions, and extrapolation."
- Because of the arguably weak nature of the statistics backing the report, some critics believe that MicroStrategy CEO Michael Saylor and others are merely trying to paint an inaccurately pretty picture in the interest of their investments in the foremost cryptocurrency. Saylor is currently claiming that Bitcoin mining is "one of the cleanest industries in the world."
- Die-hard Bitcoiners have, nonetheless, largely cheered the new report.
Twitter gives away new NFTs to users
Social media giant and unofficial crypto hub Twitter began distributing 140 nonfungible tokens to users on June 1, in addition to putting them on NFT marketplace Rarible. The seven distinct NFTs, however, are not for sale — instead, being given directly to users interacting with the announcement tweet.
- Despite giving the NFTs to users, Twitter retains the right and title to the artwork — which has drawn some skepticism. Per the social media company's terms, newfound owners of Twitter's NFTs are only allowed to display them for personal and noncommercial purposes. Furthermore, the NFTs may not be used with any product or service that is not a part of Twitter. Violating said rules may result in a $100 fee.
- Twitter CEO Jack Dorsey is a well-known Bitcoin bull. When it comes to NFTs, however, Dorsey apparently prefers Ethereum — the foremost smart contract protocol. Twitter's NFTs were issued on the Ethereum blockchain, as opposed to an Ethereum competitor.
Bitcoin hash rate experiences worst drop in history
Bitcoin's hash rate has fallen approximately 70% from its all-time high in May, per various analytics providers. The sharp reduction in computing power — which is used to mine new blocks on the Bitcoin blockchain — is the largest linear decline for the foremost cryptocurrency's hash rate in history.
- The most obvious reason for the historic drop in Bitcoin's hash rate is the crackdown on Bitcoin mining in China. Miners are currently exiting the country en masse and relocating to various other parts of the world.
- Secondarily, the subsequent near-halving of BTC's price from its April all-time high has made Bitcoin mining less profitable — though difficulty adjustments will likely make this just a temporary setback.
Morgan Stanley's GBTC exposure revealed via filing
Morgan Stanley's Europe Opportunity Fund acquired 28,289 shares of Grayscale's Bitcoin Trust, as revealed by a Securities and Exchange Commission filing. At the time the document's filing, said GBTC shares were equal to roughly $1.3 million.
- The news of Morgan Stanley's GBTC shares comes after the financial giant permitted a selection of its funds the ability to indirectly gain exposure to the foremost cryptocurrency.
- GBTC has struggled since BTC and the wider cryptocurrency market peaked earlier this year, with its premium continually hitting new lows amid the market-wide pullback.
Tidal takes interest in NFTs to benefit artists
Tidal is interested in entering the nonfungible token market, specifically as a means of compensating artists. The news comes straight from Jack Dorsey, the CEO of both Twitter and Square — the latter of which acquired a majority stake in the fidelity-focused music streaming service — in a livestream with rapper and Square board member Jay-Z.
- Jay-Z, who purchased Tidal in 2015, has an interest in NFTs that stems from being "pro-artist." The enigmatic rapper believes that the transparency provided by blockchain technology allows artists to benefit in myriad ways, such as the ability to remove lawyers and record labels from the equation.
- Square, of course, has a history with Bitcoin, having added BTC to its balance sheet twice — most recently, in February. With its CEO being a major Bitcoin bull, it stands to reason that Tidal's interest in NFTs is sincere and may become reality sooner rather than later.
OKEx Insights presents market analyses, in-depth features and curated news from crypto professionals.