Expert Bina Ramamurthy discusses pros, cons and futures of all-currency in New York and beyond
Dr. Bina Ramamurthy is the director of Blockchain ThinkLab at the University of Buffalo. She is also a cryptominer herself. This puts it at the forefront of the industry, which poses a challenge to traditional currency and has raised environmental issues due to its energy demand.
Blockchain and cryptocurrency are mysteries to many people, so to understand the interview, let’s define what we’re talking about.
blockchain, introduced in 2011, involves computers and servers programmed to solve complex mathematical problems on a continuous virtual register. This work is handled by so-called “crypto-miners”, who earn cryptocurrency – most often Bitcoin – when a problem is solved. They can then exchange it for another currency or retain ownership.
Cryptocurrency is an alternative and decentralized form of currency. Bitcoin is the most popular form of this digital currency; one coin is currently worth $ 31,666.70. Cryptocurrency can be used to pay for goods and services; It does not exist in physical form, as a coin or dollar bill, but rather practically in computer form.
External buyers can participate in the action without a mining operation, buying all or part of a bitcoin through cash transactions or barter transactions.
The attraction of cryptocurrency is its decentralized nature; it knows no national borders. It circumvents banking and government policies and practices. Critics argue that the widespread use of power-hungry computers is bad for the environment and that its unregulated nature opens the door for use by criminals.
The state legislature is considering a two-year moratorium on new mining that seeks to move into the state using fossil fuels. It would also limit the expansion of the current operation by doing the same.
Investigative Post Reporter Layne Dowdall interviewed Ramamurthy in the week of May Day.
Dowdall: Describe a crypto-mining for me.
Ramamurthy: Racks and racks and racks for high-performance computers and servers. They calculate the numbers to solve the riddle. It is very difficult to solve but very easy to prove. And it takes a lot of energy to solve that puzzle to write something in the general ledger, which is why they call it mining. They do not dig into the ground, but they make coins in the process. If you keep trying, at some point you will solve the riddle and you will be rewarded.
So there’s mining in Finger Lakes, there’s mining in China, there’s mining in Iceland, there’s mining in Pittsburgh, there’s mining in Tennessee, there’s mining in Austin. They all compete to solve the riddle. If they solve the riddle, they can write the block to the blockchain, the reward for this is cryptocurrencies.
The more power you have, the greater the likelihood that you will solve the riddle before the others. So, for example, if you have to solve the riddle yourself, it will take 10 days. If you employ 10,000 people, you might solve it in an hour.
Right now, this cryptocurrency reward is worth around $ 30,000, which I would say is a pretty good incentive for me. Who are the people behind the mining, and are there many of them here in western New York?
There are many miners with large mining rigs – server racks – and there are individuals who run small mines. Sometimes individuals gather to form a pool of servers to improve their chances of winning a block and being rewarded. In this case, the reward is shared among the pool participants.
One of the largest crypto operations in the United States is located in Rochester, Foundry LLC. Not only do they do cryptocurrency mining, but they also focus on research and development around cryptocurrencies and blockchain. Full disclosure, Foundry donated to UB Blockchain ThinkLab research.
I have heard of cryptocurrencies being used by those involved in criminal activity.
There are crimes in the crypto world, just like in, you know, the border countries. But that is not the only thing. There are people who exploit it, intentionally or by mistake, by accident. It’s like any other industry. It’s like the old west, it’s the beginning of time. Everyone is trying to find a way. And people who commit crime are also looking for opportunities. The way I look at it, people notice [the crime] because it is much higher than the real thing that is happening.
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Why do you think there is this resistance to mining like what we see from community members in North Tonawanda and Niagara Falls?
This consensus process and the solution of this puzzle to writing something in the general ledger uses a lot of energy. To power batteries and batteries and batteries for machines you need energy. You also need to cool the heated racks that run 24/7 to solve the puzzle.
If you spend more money on energy than on rewards, that can be debated, right? You need to balance the amount you invest with the reward you get. This is why operations migrate to places where there is cheap or free energy, which can mean the use of non-renewable energy sources. We have hydropower in New York. In Pennsylvania, they use all the coal, which is very, very bad. And in Texas, they use all the remaining sites of all these oil wells to operate the rigs.
It’s like having a factory next to your home. Do you want noise and pollution and all that? Residents do not want their premises to be disturbed by all this. I think all this could be done by zoning and other regulations.
New legislation is being considered in New York that will prevent new mining from moving into old power plants that use fossil fuels as their main source of energy. It would also halt any expansion of existing mining facilities. What is your point of view?
You do not want to get in the way of innovation, we want to be at the forefront of technology. At the same time, we also want to be careful about climate change and other related effects. These are things that can be written down through policies and rules. If legislators do, the industry will follow this and create responsible innovation.
It has happened to other industries. Look at the soda industry, there is a fee of five cents per can. Planes and cars are heading for net zero emissions. And then look at the plastic bags turned into paper bags. These are things we did responsibly. That does not mean we will ban the car because it uses a lot of gas. You do it better, you do it efficiently. So this is where we’re in blockchain and cryptocurrency. Everyone is trying in their own interest to improve it.