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Wikimedia Foundation Debates Acceptance of Cryptocurrency Donations Over Environmental Concerns

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Wikimedia Foundation Debates Acceptance of Cryptocurrency Donations Over Environmental Concerns

Wikimedia Foundation Debates the Acceptance of Cryptocurrency Donations Over Environmental Concerns

Following Mozilla’s decision to pause crypto donations due to environmental concerns, a number of Wikimedia Foundation community members have submitted a proposal that asks the foundation to stop accepting digital currency donations. The proposal explains that crypto donations “signals [an] endorsement of the cryptocurrency space,” and also says that “Cryptocurrencies may not align with the Wikimedia Foundation’s commitment to environmental sustainability.”

Proposal Claims Cryptocurrencies May Not Align With the Wikimedia Foundation

Members of the Wikimedia Foundation are voting on a proposal that could stop the foundation from accepting digital currencies like bitcoin and ethereum. The U.S. non-profit started accepting crypto assets in 2019 via Bitpay. “We accept donations globally, and we strive to provide a large variety of donation options. It’s very important that we can get international donations processed in ways that are efficient and cost-effective,” Pats Pena, director of payments and operations at Wikimedia Foundation said at the time.

Wikimedia Foundation Debates Acceptance of Cryptocurrency Donations Over Environmental Concerns
The Wikimedia Foundation proposal submitted by Gorillawarfare.

However, a proposal submitted by the user dubbed “Gorillawarfare” claims that accepting crypto donations goes against specific Wikimedia Foundation principles. “Cryptocurrencies may not align with the Wikimedia Foundation’s commitment to environmental sustainability. Bitcoin and ethereum are the two most highly-used cryptocurrencies, and are both proof-of-work, using an enormous amount of energy,” the proposal says.

While the proposal mentions the Cambridge Bitcoin Electricity Consumption Index it leverages a lot of the research done by the Digiconomist’s Bitcoin Energy Consumption Index. The proposal seems to have a lot of support as voting members left comments signaling affirmation. “Long overdue. Accepting cryptocurrency makes a joke out of the WMF’s commitment to environmental sustainability,” Wikimedia user Gamaliel said. However, not everyone agreed and in fact, there are a great number of people who voiced the opposite opinion. In reply to Gamaliel’s statement, for instance, one person wrote:

Are you aware that the traditional banking system also uses energy?

Individual Insists ‘Each Point Is Untrue and/or Misleading’

There is some discussion from a few people’s submitted comments that insists Wikimedia Foundation members should realize the U.S. dollar is backed by significant amounts of carbon energy and worst of all, state-enforced violence. One person explained that each point that Gorillawarfare brought up in the proposal “is untrue and/or misleading.” For example, the point about being aligned with the crypto industry’s so-called values. The individual retorted that “this is not true, any more than accepting USD signals endorsement of the U.S. Dollar or the U.S. Government.”

In reply to the environmental concerns Gorillawarfare introduced in the proposal, the individual explained that the proposal’s point is conflated. “The proposal conflates the existence of Bitcoin to merely using it,” the Wikimedia Foundation member Awwright opined. “The proposal does not demonstrate that dropping acceptance of Bitcoin (or other cryptocurrency) will actually have an effect. As a technical matter, there is no direct relationship between making a Bitcoin transaction and energy usage (that’s significantly more than the domestic banking system).”

Commenters Highlight Bias Stemming from the Digiconomist

Furthermore, there are many complaints about Gorillawarfare citing the Digiconomist, as the researcher’s work has been widely dismissed over inaccuracies and extreme bias. “Digiconomist is a blog run by Alex de Vries, who is an employee of De Nederlandsche Bank NV (DNB), the central bank of the Netherlands, which is a direct competitor to Bitcoin,” one of the comments against Gorillawarfare’s proposal notes. Another individual explained that the Digiconomist’s work is inaccurate, as many others have discovered, and the Digiconomist’s work is loaded with discrepancies. One individual wrote:

Digiconomist isn’t just biased and conflicted. De Vries is self published, has no editorial review process and he has a poor reputation for fact-checking and accuracy.

At the time of writing, there’s a myriad of individuals who are against the proposal submitted by Gorillawarfare, but the lion’s share of the votes and comments support the idea. It seems the crypto community and proponents of proof-of-work (PoW) must work harder to dispel the myths that are circulating from mainstream media pundits, the old financial guard, and ​​paid opposition researchers.

What do you think about the Wikimedia Foundation proposal that suggests the foundation stop accepting crypto assets over environmental concerns? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons, Wiki,

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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El Salvador’s Bitcoin wallet onboards 4M users with Netki partnership

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El Salvador’s Bitcoin wallet onboards 4M users with Netki partnership

Chivo, El Salvador’s official Bitcoin wallet, has managed to onboard 70% of the unbanked population in El Salvador, partner says.

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El Salvador’s Bitcoin wallet onboards 4M users with Netki partnership

El Salvador, the first country to make Bitcoin (BTC) a legal tender, has onboarded 4 million users for its government-backed BTC wallet Chivo in partnership with digital identity provider Netki, according to an announcement.

Netki has announced that Chivo wallet onboarded over 4 million new users in 45 days using the company’s flagship Know Your Customer (KYC)/Anti-Money Laundering (AML) product, OnboardID. The platform also claimed that it had facilitated the compliant onboarding of 70% of the country’s previously unbanked population. 

El Salvador passed the Bitcoin bill in June of last year and officially made Bitcoin a legal tender in September. Nayib Bukele, the president of the small Central American nation, made it clear that the goal was to offer digital banking facilities to more than 70% unbanked population in the country. To promote BTC use and ease of transactions, the government launched a national crypto wallet named Chivo and a $30 airdrop in BTC.

Major financial institutions, including the World Bank and the IMF, shared drastic forecasts while warning El Salvador of unwarranted economic consequences. However, President Bukele continued to promote Bitcoin use in the country and rebuked all the fear-mongering. After the IMF rejected $1 billion financial aid, the El Salvador government launched Bitcoin volcanic bond as Bitcoin proponent Max Keiser advised.

Earlier today, President Bukele also responded to Moody’s recent downgrading of El Salvador’s sovereign debt and said, “BREAKING: EL SALVADOR DGAF”

BREAKING: EL SALVADOR DGAF https://t.co/VuJ25PcvQL

— Nayib Bukele (@nayibbukele) January 17, 2022

Related: El Salvador’s dollar debt dives on Bitcoin bond plans

Chivo has been instrumental in making El Salvador the first country to make using Bitcoin as easy as fiat. Apart from transferring money worldwide, Chivo wallets are being used for daily transactions at restaurants, cafeterias, malls and every other retail market.

The government has also deployed hundreds of Bitcoin ATMs across the country that facilitates millions in cross-border remittance. Chivo has managed to do what banks haven’t been able to do in decades. 

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Bitcoin miners’ resilience to geopolitics — A healthy sign for the network

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Bitcoin miners’ resilience to geopolitics — A healthy sign for the network

Considering that Bitcoin (BTC) is a blockchain network that uses a proof-of-work (PoW) consensus mechanism, miners are a highly significant part of the market dynamics of the network and the community itself. On Jan. 5, it was revealed that Kazakhstan shut down its internet services due to unprecedented political unrest sparked by rising fuel prices in the country.

The protests in Kazakhstan began on Jan. 2 in the town of Zhanaozen to fight against the government doubling the price of liquefied petroleum gas (LPG), which is widely used as car fuel in the country. This change in pricing came as a result of the gradual transition to the use of electronic trading of LPG in order to abolish the existing state subsidies for fuel and allow the market to discover the price of the asset.

However, protests in the region soon snowballed, gaining more momentum and continued despite the country’s government announcing that the prices of LPG would be brought down to a level lower than before the increase. Soon, this led to the country’s presiding cabinet resigning and the state-owned telecom company, Kazakhtelecom, shutting off the country’s internet services. Network data provider Netblocks reported that the normalized network connectivity fell down to 2%, with the government attempting to limit coverage on the escalating anti-government protests.

As a result, the Bitcoin network’s mining hash rate declined over 13% in the hours after the shutdown in the country from 205,000 petahash per second (PH/s) to 177,330 PH/s. Over the past year, the country grew to account for 18% of Bitcoin’s mining activity. A report from the Data Center Industry & Blockchain Association of Kazakhstan estimated that cryptocurrency mining would bring in $1.5 billion in revenue for the country in the next five years.

This is not the first time that Bitcoin mining in the region has received the spotlight. Despite being an energy-rich country, the Kazakh government announced last year that it planned to crack down on unregistered miners that were straining the country’s energy supply after the mining migration from China.

Kazakhstan’s mining market share

The Central Asian country became a hub for Bitcoin mining after the Chinese government banned mining operations and cryptocurrency services in 2021. This led to the migration of mining companies like BIT Mining to relocate their operations from China to Kazakhstan. BIT Mining is one of the largest BTC mining companies in the world. 

The mining company has indicated that it is unlikely to flee Kazakhstan to relocate to North America amid the political upheaval. The firm is closely monitoring and evaluating the situation in order to decide its next move with respect to mining. 

However, countries like Spain have had their eyes on Kazakhstan’s mining market share. The Deputy for the Spanish Ciudadanos political party, María Muñoz, proposed to make the country a mining hotspot amid the current situation, stating in a tweet, “The protests in Kazakhstan have repercussions all around the world but also for Bitcoin. We propose that Spain positions itself as a safe destination for investments in cryptocurrencies to develop a flexible, efficient, and safe sector.”

Rob Chang, the CEO and director of Gryphon Digital Mining, a digital assets mining company, told Cointelegraph:

“Bitcoin mining will continue to grow and the need for viable locations will always be necessary. Countries with the foresight to make themselves Bitcoin-friendly will stand to do quite well as Bitcoin continues to establish itself as a legitimate alternative to fiat.”

As a result of China’s mining ban, the mining dynamics have shifted globally, with the United States leading the charge with over a third of the mining rate. Chang said that one benefit of this migration includes rehomed miners’ shift to a larger mix of carbon-free energy sources.

Additionally, some of the hash rates has gone to more transparent entities operating the mining machines, leading to increased security for the network and a higher level of public trust in Bitcoin miners.

Illia Polosukhin, the co-founder of the NEAR Protocol, a decentralized development platform, told Cointelegraph that in addition to China’s ban leading to a loss of investment, the loss of talent is another major factor:

“Chinese citizens living on the mainland and abroad are banned from working in the crypto sector, and that’s a big loss for the blockchain industry as a whole. It will stifle innovation and, eventually, leave Chinese citizens behind as more users begin to adopt Open Web technologies. It’s possible that more mining operations shifting to the United States could push the issue of blockchain and sustainability more fully into the public eye.”

Thriving amid geopolitical risks is rare for financial assets

The mining hash rate for the Bitcoin network recovered quickly from the drop to 168 million TH/s, according to data from YCharts. In fact, the network has taken a step forward with the hash rate hitting a new all-time high of 215 million TH/s on Jan. 13.

We’re officially building an open bitcoin mining system ✨ https://t.co/PaNc7gXS48

— jack⚡️ (@jack) January 13, 2022

This new all-time high was driven by the statement from ex-Twitter CEO Jack Dorsey, announcing the creation of an open Bitcoin mining system. Thomas Templeton, the general manager of hardware at Square, said, “We want to make mining more distributed and efficient in every way, from buying, to set up, to maintenance, to mining. We’re interested because mining goes far beyond creating new bitcoin. We see it as a long-term need for a future that is fully decentralized and permissionless.”

This new all-time high is evidence of how resilient the Bitcoin network and its community are to ensure that the network thrives at all costs. 

However, it’s important to remember that such risks are not exclusive to Bitcoin. Chang said, “Geopolitical risk is a common issue for many industries, and Bitcoin mining is not immune. While there will be some that will take the risk and operate in these countries for the sake of lower costs, they do run the risk, such as those experienced in Kazakhstan or others such as the government deciding one day to take all of your machines. Operators will need to understand the risk/reward tradeoff.”

Related: A new intro to Bitcoin: The 9-minute read that could change your life

Polosukhin explained that no matter how distributed or decentralized a blockchain network is — Bitcoin or any other — it’s still intertwined with many legacy systems: energy grids, energy prices, regulation and the laws of nations. Bitcoin mining has either been banned or is facing uncertainty in many countries including Iran, Lebanon, Iceland and Sweden.

Being an energy-intensive PoW network, the Bitcoin network is expected to continue to thrive as long as miners are incentivized economically to continue to remain miners. A report from Fidelity Digital Assets, the crypto wing of Fidelity Investments, indicated that the Bitcoin cycle is far from over, and with the high financial incentives for miners, they are in it for the long haul

While Bitcoin is in a price slump, currently trading around the $42,000 range with a market capitalization of $791 billion, the fact that miners — the core aspect of the network — have shown resilience to adverse situations over the 13-year history of the network reinforces the belief and trust the community puts on the flagship blockchain network.

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Solana-based DeFi protocol Hubble raises $10M, prepares for mainnet launch

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Solana-based DeFi protocol Hubble raises $10M, prepares for mainnet launch

Crypto heavyweights including Three Arrows, DCG, Delphi Digital and Crypto.com Capital joined Hubble Protocol’s funding.

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Solana-based DeFi protocol Hubble raises M, prepares for mainnet launch

The Solana (SOL) network is ready to see the mainnet launch for another decentralized finance (DeFi) protocol, aimed at Web3 development and backed by bigshots from the crypto industry.

Hubble Protocol, a project aiming to develop a censorship-resistant crypto-backed stablecoin among other DeFi services, has raised $10 million from Three Arrows / DeFiance Capital, Delphi Digital, Digital Currency Group (DCG), Crypto.com Capital, ParaFi, Jump Capital, Decentral Park Capital, CMS, Spartan, DeFi Alliance and Mechanism Capital.

Hubble plans to expand its team and DeFi products with fresh funds, starting with its scheduled mainnet launch on Jan. 28, according to the announcement. The first item on Hubble’s roadmap is the launch of its zero-interest borrowing platform that mints USDH, a censorship-resistant crypto-backed stablecoin that’s “positioned to become a building block for other protocols” on the Solana ecosystem.

From a decentralized stablecoin to an innovative borrowing marketplace to undercollateralized lending, the Hubble team is building “core DeFi primitives for the Solana ecosystem,” according to DCG director of investments Matthew Beck. He added:

“These are critical components of the Web3 financial stack on one of the most prominent networks in the crypto market.”

Seeing stablecoins as a multi-trillion dollar market opportunity, ParaFi Capital vice president Anjan Vinod stressed that crypto users will want access to both centralized and decentralized stablecoins, where Hubble comes into play. “We see Hubble’s low transaction costs and USDH network effects as compelling features to drive liquidity to the protocol,” he added.

Related: Solana could become the ‘Visa of crypto’: Bank of America

Following its mainnet launch, Hubble users can stake the platform’s native token, HBB, to earn the majority of the protocol’s fees from minting USDH. According to the announcement, Hubble aims to develop undercollateralized lending services in the future and “explore further DeFi innovations laying the foundations for a global and open financial system.”

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