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Bitcoin’s [BTC] ‘unaffordability’ argument is weak after report suggests mining gold is more expensive

Biraajmaan Tamuly

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"Bitcoin is not affordable" statement holds weak as Mining gold is more expensive
Source: Pixabay

Gold is considered one of the most valuable elements on planet Earth. However, an argument about Bitcoin being the most valuable digital asset presently available can also be made. The digital asset has often been compared to the value of Gold, with the debate scaling new heights after Bitcoin outperformed Gold and several traditional assets during the course of 2019.

Peter Schiff, CEO of Euro Pacific Capital, recently held a discussion with Barry Silbert, where he suggested that the act of transferring Bitcoin was similar to an act of “transferring nothing.” He added that if Bitcoin was used on a massive scale worldwide, it would be impossible to maintain the network as it was “unaffordable.”

Schiff’s statement was picked up by the Bitcoin community, with many pointing out that his assumption might have been far from accurate.

Twitter user, @ArcaChemist, shared a tweet with a Long Hash report, suggesting a different scenario altogether. Citing the example of one of the world’s leading gold mining companies, the report highlighted that in 2017, Barrick Gold Corp mined an approx 5.3 million oz. of gold, requiring 92 million barrels of crude oil valued at over $87 billion. In comparison, the annual cost of mining Bitcoin was only $4.3 billion that year.

Another report shared by him mentioned that mining of Bitcoin promotes the usage of renewable energy at a rate of 76%, and that “mining tends to drive innovation to create cheaper energy.”

It added,

“The notion that Bitcoin is wasting unnecessary energy is false-Bitcoin is more often than not using surplus energy that is expanded whether or not it is put to use. Energy generators operate under peak capacity, meaning that there is often too much energy produced in case of a surge in energy demand.”

In response to Peter Schiff’s comment, Alex Kruger, Fundamental and Technical Analyst at Global Markets, stated,

“Bitcoin requires a continuous expenditure of electricity to validate every single transaction. Gold requires a continuous expenditure of fiat to pay for the bankers’ salaries to validate every single transaction.”





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Biraajmaan is an engineering graduate who is exploring the ever-changing crypto verse while traversing his passion for cryptocurrency news writing. He is a Chelsea fan and a part-time poet and does not hold any value in cryptocurrencies yet.

Bitcoin

ErisX goes all hands on deck to launch a Bitcoin Futures market

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ErisX goes all-hands on deck to launch a Bitcoin Futures market
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ErisX’s CSO, Matt Trudeau, detailed the company’s four important plans for the future, which includes launching a spot market, to secure a Bit License, DCO, and to launch a futures market.

ErisX currently has a DCM contract, which is a Derivative Contract Market that allows ErisX to run a CFTC-regulated futures exchange. However, ErisX aims to get a DCO [Derivatives Organization], which will effectively allow it to run a CFTC-regulated clearinghouse. A clearinghouse would mean that ErisX can take control of the custody of the assets and clear and settled trades.

The CSO explained the benefit of this, stating,

“There is some efficiency for firms like producers [like mining companies]; if they need to hedge their inventory or need liquidity on a spot market, they could do that conveniently on a single platform. “

Trudeau added that from the “post-trade standpoint” and “the collateral management standpoint,” ErisX would have cash, crypto, and the futures, all stored in their clearinghouse. This would boost efficiency since it would be available for all customers under a single platform. The CSO added,

“… so there is some efficiency in terms of managing collateral, if you don’t have assets on  multiple platforms, it can all be in our clearinghouse.”

Apart from the aforementioned plans, Trudeau added that the crypto-industry needs to mature more and that ErisX plans to make a significant contribution to that. He added,

“The market is professionalizing and we think that in terms of what institutions are expecting from a trading/custody experience, we will bring some of the solutions to the market and that’s really the foundational pieces that they are looking in order to build their businesses on top of us.”

Apart from ErisX, LedgerX has also received a go-sign from the CFTC to settle Bitcoin Futures in Bitcoins. Other exchanges include Intercontinental Exchange’s Bakkt and Seed CX.





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