07/18/2023 0 Comments

1. Mining 2.0: Crypto Miners Embrace Artificial Intelligence (AI) as the New Frontier

Artificial Intelligence (AI) has become ubiquitous, making its presence felt across various sectors. Gradually infiltrating every aspect of human activity, this buzzword, although not entirely new, has captivated the minds of both seasoned tech gurus and novices alike.

The integration of the digital asset space and AI was inevitable. Industry players are actively exploring innovative approaches to integrate these two technologies. Hence, the pivot of crypto miners to this newfound tech darling is not surprising.

Miners have realized that AI-powered solutions hold the promise of addressing some of our most critical challenges. As we enter the next decade, it is abundantly clear that the digital future and AI are inextricably linked.

The ongoing AI boom is revitalizing the prospects of cryptocurrency miners, which have been reeling from the humbling market crash last year. This strategic shift has garnered its unique moniker: Mining 2.0

Crypto Miners Riding the AI Wave

Prominent players in the crypto mining industry are actively seeking greener pastures in the AI sector. One such is Hut8 which is expanding its horizon by venturing into non-mining services while simultaneously investing in high-performance data centers to cater to the growing demands of AI and computing requirements.

In a conversation with CryptoPotato, Hut8’s Erin Dermer said the company is “uniquely qualified to deliver on AI clients’ intensive workloads.”

Hut8 purchased five traditional high-performance computing data centers last year. Shortly thereafter, it moved some of its GPUs and supporting servers, previously mining Ethereum, into those data centers to perform VFX rendering and machine learning for its customers, primarily in the gaming and entertainment industries. Hut8 also revealed with clients, including XYZ AI, to deliver the computing power to support their text-to-graphic generative AI requirements.

Dermer said, “We are very excited by the promise of AI and have been providing the computing infrastructure to deliver these high-demand computing services for some time. While we are still in the early days of AI adoption, we believe that whether we are mining Bitcoin or providing high-performance computing services, the common thread is in the computing infrastructure, and Hut 8 is actively pursuing both lines of business.”

The Challenge

As lucrative as it seems, it’s important to note that AI and crypto mining have distinct sets of requirements.

While crypto mining primarily relies on powerful computational resources and specialized hardware to solve complex mathematical problems, that’s not the case with AI, which typically emphasizes data processing, machine learning algorithms, and high-performance computing.

Therefore, although both fields can be profitable, it’s crucial to recognize and address the unique demands and challenges associated with each, including the need for tailored infrastructure, expertise, and investment strategies.

According to Bitcoin miner Xive’s CEO and co-founder, Didar Bekbauov, “only altcoin miners can switch to AI computations now” because they use GPUs – which not only help in crypto mining but can also be used for the computational workloads needed to train generative AI systems.

While speaking with CryptoPotato, Bekbauov shed some light on the subject and said, “Almost 99% of all crypto mining is Bitcoin mining, where we use application-specific integrated circuit (ASIC) miners. They can’t be used for any other purpose, only mining Bitcoin. However, the technology behind data center construction and management both for crypto mining and AI are the same. So any large-scale miner potentially can build a data center for AI operations.”

The real challenge, however, is to determine the demand for computing power, Bekbauov explained. “With Bitcoin mining, it’s easy, because all mined coins can be sold on exchanges whenever miners have needs. But with AI computing you need to find buyers of computing power to generate revenue, which can be hard.”

The Xive executive further added that Bitcoin miners can diversify their strategy by building out large facilities for AI data centers since miners already have experience in “connecting all the dots” in terms of “finding electricity capacities, building electrical and cooling infrastructure, supplying GPUs, maintaining data centers, etc.”

The Opportunity

Bekbauov highlighted the opportunity for miners to participate in the global need for computational power, which, according to the exec, has emerged as the world’s most important resource in the information age. The Xive co-founder, however, said the industry requires more transparency in terms of needs from AI companies, who can be perfect customers for data centers.

While the software side of AI is progressing faster on the front, the same can’t be said for the hardware side of things, which cannot catch up with the pace of AI developments. “Users need to wait from 5 minutes to a couple of days to get their responses for prompts, especially with pictures and videos. Number of users is growing exponentially. But we can’t say the same for hardware which is used for supplying computing power to work on all of the demand.”

2. BlackRock CEO Larry Fink: Crypto Will ‘Transcend Any One Currency’

BlackRock boss Larry Fink has upped his bullish stance on cryptocurrency as an investment, today saying that “it’s going to transcend any one currency.”

The CEO of the world’s largest asset manager said in a Friday interview with CNBC that although he couldn’t talk about Bitcoin specifically as BlackRock had filed an application with the U.S. Securities and Exchange Commission for a spot market Bitcoin ETF, crypto “has a differentiating value versus other asset classes.”

BlackRock—which manages $9.5 trillion in assets—last month applied to the SEC for a spot Bitcoin exchange-traded fund, leading institutional investors to pour money into the space and in turn causing the asset to jump to a 12-month high.

“We believe we have a responsibility to democratize investing,” he said regarding ETFs. “Over the last five years, more and more global investors are asking us about the role of crypto—and like I said, I do think a lot of crypto is an international asset.”

“More importantly, because it’s so international, it’s going to transcend any one currency in currency valuation,” he continued, adding that an “international crypto product” can “transcend” the problem of dollar devaluation.

A spot market Bitcoin ETF would give institutional investors access to Bitcoin without having to deal with complex storage issues, which could mean more money flowing into the market should an ETF ever be approved.

ETFs are popular investment vehicles that allow people to buy shares that track the value of an underlying asset like gold, foreign currencies, or cryptocurrency.

A spot Bitcoin ETF does not yet exist in the U.S., but a number of high-profile investment firms have applied to the SEC for one. The SEC has been reluctant to approve such a product, though, citing market manipulation as one of the concerns.

BlackRock CEO Says ‘Next Generation for Markets’ Is Tokenization

Just last week, billionaire Fink said the role of crypto is “digitizing gold” and that Bitcoin was “an international asset.”

But back in 2017, he said that “Bitcoin just shows you how much demand for money laundering there is in the world.” He changed his stance over the years, later claiming that it was a “great asset.”

3. Bitcoin’s Potential in Combating Climate Change Emergency

Bitcoin has the potential to help mitigate the ongoing climate change emergency by addressing the extreme heatwaves witnessed across the northern hemisphere, According to Nigel Green, the CEO and financial analyst of deVere Group financial advisory.

As record-breaking temperatures sweep the globe, with both the US and China experiencing mercury levels above 50°C and southern Europe anticipating the shattering of all-time temperature records, Green believes that Bitcoin could serve as an unexpected solution.

In the face of the global climate change emergency, Bitcoin emerges as a contender capable of driving positive change and contributing to the fight against climate change. Green emphasizes that Bitcoin’s distinctive characteristics and transformative potential position it to play a crucial role in transitioning toward a more sustainable and eco-friendly future.

An often-overlooked point is Bitcoin mining, the process of verifying and adding transactions to the Bitcoin blockchain while also creating new Bitcoins. Green argues that Bitcoin mining could expedite the transition from fossil fuels to renewable energy sources. While clean energy is undoubtedly the way forward, it sometimes faces irregular availability, and storage capacity for excess energy generated by these sources remains insufficient. However, Bitcoin miners, who require substantial energy, could act as significant buyers of last resort, generating substantial profits for investment and expansion. This would stimulate the supply of renewables, resulting in decreased prices for consumers and further boosting demand.

Bitcoin’s increasing popularity has led to the accumulation of wealth for early adopters and cryptocurrency enthusiasts. Many individuals in the Bitcoin community are leveraging their newfound wealth to support sustainable projects and initiatives. Green highlights that this philanthropic approach can result in significant investments in renewable energy, clean technology, and other climate change mitigation efforts.

Moreover, Green underscores the potential for Bitcoin to promote financial inclusion. By providing individuals with access to digital currencies and blockchain-based financial services, Bitcoin can empower the unbanked and foster economic growth in marginalized communities. Increased access to financial resources enables individuals to invest in sustainable practices and contribute to climate change mitigation.

Green acknowledges that no monetary system or investment is perfect, and improvements can still be made within the crypto ecosystem. However, he refutes the argument that digital currencies cannot be part of a climate change mitigation strategy. As the climate change emergency intensifies, he believes it is essential to utilize every available means to combat it, with Bitcoin being one of those means.

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