Minister Donohoe publishes discussion paper on virtual currencies and blockchain technology

Thursday, 22 March 2018



Minister Donohoe publishes discussion paper on virtual currencies and blockchain technology

Working Group to monitor cryptocurrency developments established within Department of Finance



The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe T.D today (Thursday) published a discussion paper prepared by his Department on virtual currencies and blockchain technology, and announced the subsequent creation of an internal working group to monitor further developments in this area.

This follows the Department’s active research into virtual currencies and the blockchain ecosystem that exists in Ireland, Europe and globally. The discussion paper comprises an overview of virtual currencies and the blockchain technology supporting them; summarises actions taken by selected countries around the world; and sets out the key risks and opportunities these technologies present.

The discussion paper concludes with a recommendation to establish an internal working group to coordinate the Department’s engagement in this area, both locally and abroad.

Minister Donohoe commented: ‘Consumers and investors should be aware that buying and exchanging virtual currencies comes with considerable risks. Virtual currencies remain an unregulated activity, and the prices at which they are traded remain highly volatile’.

“However, while investing in virtual currencies may involve risks, the blockchain technology that underpins them has the potential to be a catalyst for innovation in the financial services sector and elsewhere. One of Ireland’s strengths is its ability to innovate and adapt to emerging trends across finance and technology and I have spoken before about the importance of developing clusters in key growth areas as a way of nurturing Ireland’s knowledge economy.

“The Government’s IFS2020 vision is to be recognised as a global location of choice for specialist international financial services by building on our strengths in talent, technology, innovation and excellent client services, while focussing on capturing new opportunities in a changing marketplace and embracing the highest standards of governance. By engaging with virtual currencies and blockchain technology, Ireland, through the work undertaken by the Department of Finance, can be instrumental in creating a predictable and open blockchain ecosystem in Ireland and furthering that ambition.”

Ends

That will probably lead to a big spike in the price of Bitcoin.

Do you think Pascal understood a word he was saying? Trying to count the buzz words... We have 'innovate', 'clusters', 'nurturing', 'embracing', 'catalyst', 'changing', 'engaging', 'ecosystem'

Sunny said:

Do you think Pascal understood a word he was saying? Trying to count the buzz words... We have 'innovate', 'clusters', 'nurturing', 'embracing', 'catalyst', 'changing', 'engaging', 'ecosystem'

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He probably used other words, some spin-master then used search & replace

Jobs, jobs, jobs. Oh and a new carbon tax

Stand by for large jobs announcement from Tether due the Ireland having a better ecosystem than British Virgin Islands.....

So it's official.....Ireland is to become the 'Crypto Capital of the World'. Any chance you can dish out a few Bitcoin in the budget there Pascal is there?

Seriously though it's good to see they are at least taking notice of it and exploring the possibilities. Remains to be seen what may come of it I guess!

Firefly said:

Jobs, jobs, jobs. Oh and a new carbon tax

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You are just not getting the whole clean renewable energy thing, are you?

TheBigShort said:

You are just not getting the whole clean renewable energy thing, are you?

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I'm sure some of the energy is/will come from renewable sources, but if Bitcoin currently uses more energy than that consumed by Ireland, can you show who provides this amount of renewable energy for these miners to use?

Firefly said:

I'm sure some of the energy is/will come from renewable sources, but if Bitcoin currently uses more energy than that consumed by Ireland, can you show who provides this amount of renewable energy for these miners to use?

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Probably not, but thats not the point. Why should bitcoin mining rigs be obligated to use carbon free renewables anymore than any other energy consuming activity?

Take the proposed Apple Data Centre for Athlone for instance. Depending on which report you read, it could increase Irelands energy use by anything between 6-20%.
Thats just one Apple data centre in Ireland.
Jobs, jobs, jobs for sure, but seeing as Ireland is not capable of producing 100% clean renewables, yet, then how concerned are you about the carbon footprint of Apples activities in Ireland? Which will dwarf the carbon footprint of bitcoin mining occuring in Ireland (if any).

TheBigShort said:

Probably not, but thats not the point. Why should bitcoin mining rigs be obligated to use carbon free renewables anymore than any other energy consuming activity?

Take the proposed Apple Data Centre for Athlone for instance. Depending on which report you read, it could increase Irelands energy use by anything between 6-20%.
Thats just one Apple data centre in Ireland.
Jobs, jobs, jobs for sure, but seeing as Ireland is not capable of producing 100% clean renewables, yet, then how concerned are you about the carbon footprint of Apples activities in Ireland? Which will dwarf the carbon footprint of bitcoin mining occuring in Ireland (if any).

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Here...a nice, lefty newspaper for you...

https://www.theguardian.com/technol...electricity-usage-huge-climate-cryptocurrency


And while marijuana farmers and data centre engineers managed to reduce their power demands, the fundamentally wasteful nature of bitcoin mining means there’s no easy technological solution coming.

Mining computers have become more power-efficient, with the latest generation of machines able to do roughly 20% more useless calculations per MWh of electricity. But in the zero-sum game of bitcoin mining, that just means a miner can afford to run more machines at the same time, leaving their power usage roughly stable.

In the end, there’s only one real reason why bitcoin’s energy consumption would fall, and that is if the price of the currency drops.


Be honest, if you were on the other side of this debate, you would be arguing the energy use of Bitcoin ad nauseam

There are two debates in that article. The bitcoin has value / is worthless debate and the energy usage debate. The 'worthless' view supports the energy wastage view.
The bitcoin has 'value' view supports the energy usage view.
Clearly the writer is in the 'worthless' camp, so can support his energy wastage view. And correct, if I thought bitcoin was 'worthless' I would agree that it is a waste of energy - unless it is renewable energy, which is never wasted.
Im in the 'value' camp for bitcoin so can support the energy use.
Perhaps you can let us know which side of the debate you are on with bitcoin? Then perhaps we can take the energy use case further?
Bearing in mind, clean, renewable energies are never wasted. The only problem is the cost involved in harnessing those energies.

TheBigShort said:

There are two debates in that article. The bitcoin has value / is worthless debate and the energy usage debate. The 'worthless' view supports the energy wastage view.
The bitcoin has 'value' view supports the energy usage view.
Clearly the writer is in the 'worthless' camp, so can support his energy wastage view. And correct, if I thought bitcoin was 'worthless' I would agree that it is a waste of energy - unless it is renewable energy, which is never wasted.
Im in the 'value' camp for bitcoin so can support the energy use.
Perhaps you can let us know which side of the debate you are on with bitcoin? Then perhaps we can take the energy use case further?
Bearing in mind, clean, renewable energies are never wasted. The only problem is the cost involved in harnessing those energies.

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You seem to be under the assumption that bitcoin miners are all environmentally conscious and using renewable energy. They are not. Check out mines in China. Even if they were, renewable energy doesn’t have a zero carbon footprint. And it gets worse if renewable energy sources are being developed simply to meet the demand of bitcoin miners which is an economically and socially useless activity. It is only done to make money on the back of speculative prices. It contributes absolutely nothing. You can defend the technology but the technology can be tested and and developed in a much more environmentally friendly way without this crazy gold rush mentality.

TheBigShort said:

The bitcoin has 'value' view supports the energy usage view.

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It really doesn't though, as Bitcoin works as well (or poorly depending on your view) today as it did years ago on a tiny fraction of the energy use. More energy consumption does not result on Bitcoin's price rising. Current energy usage bears no relation to that required for it to function.

That's like trying to make an argument that an old inefficient fridge is more valuable than a new one as it uses more energy to perform the same function.

For me this is a difficult one because I don't think Bitcoin should be singled out for it's energy use any more than any other business or operation. However it does seem criminal that it uses so much electricity when other cryptos can use a fraction of the energy to mine that Bitcoin.

I like the idea of the mining farms being operated from very green countries like Iceland where it's practically all clean energy but it's not realistic to think all mining will be done in this way.

I'm not against Bitcoin mining just for the sake of the amount of energy it uses but if it can be done in a much more efficient way then I'm all for that. I think it will get there eventually too or it will simply be overtaken by other better more efficient cryptos some of which are already in the making!

Sunny said:

You seem to be under the assumption that bitcoin miners are all environmentally conscious and using renewable energy.

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No, not at all. Im just making a nonsense of the 'bitcoin uses energy and is destroying the planet' view being proffered while simultaneously ignoring all other energy use.

Leo said:

It really doesn't though, as Bitcoin works as well (or poorly depending on your view) today as it did years ago on a tiny fraction of the energy use. More energy consumption does not result on Bitcoin's price rising. Current energy usage bears no relation to that required for it to function.

That's like trying to make an argument that an old inefficient fridge is more valuable than a new one as it uses more energy to perform the same function.

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Im not putting that arguement at all. Im simply rubbishing the 'bitcoin uses too much energy' arguement.

Negotiator said:

I don't think Bitcoin should be singled out for it's energy use any more than any other business or operation.

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That is my point exactly.

[QUOTE="TheBigShort, Probably not, but thats not the point. Why should bitcoin mining rigs be obligated to use carbon free renewables anymore than any other energy consuming activity?

Take the proposed Apple Data Centre for Athlone for instance.

Hope you know your bitcoin as well as your know Athlone or should I say Athenry,[/QUOTE]

Please don't mix up the Marmalade coin with bitcoin,

On the energy usage, I did have concerns but I see things developing in the right direction.
Firstly, as others have pointed out, the initial failing is the assumption that the energy is being used for nothing - it's not. I want ye all to leave your christmas tree lights in the attic permanently because that energy usage is pointless (all in the eye of the beholder).
Someone suggested that miners were based out of china using dirty coal based electricity - true. However, China is turfing them out - and they're finding homes in Canada and Iceland - using cheap renewables.
Should crypto miners be forced to use renewables only? I have no problem with that. That's down to municipal authorities to decide though (and some have). Renewables are coming on generally in any event. It may not be possible to run completely on renewables right now - but it will be possible to get quite close to that in the not too distant. Further refinement in terms of mining will also follow with regard to energy usage.