In February 2021, the former Assistant Secretary of the Treasury for Terrorist Financing and Financial Crimes, Daniel Glaser, said that on transparency in the international financial system “ Cryptocurrencies offer, in some ways, enhanced opportunities for law enforcement agencies to be able to trace transactions. “.
Morell reports in his report that another expert told him: “If all criminals used blockchain, we could eradicate illicit financial activity. ” The expert explains his position with a metaphor that sums up the situation.
I pay you $ 2,000 in a dark alley, who are the witnesses of this transaction? Just you and [moi], no ? With cryptocurrencies… the whole world could be the witness.
He is surely talking about blockchain, the technology behind cryptocurrencies that allow access to all the transactions that are carried out on the network. Once a transaction is completed, it is recorded automatically and can never be withdrawn in the block. All users can access it easily.
Without going into technical details, the Blockchain is a transparent and non-modifiable shared database. Thanks to its characteristics, it solves trust problems and is ideal for storing historical information, with a traceability that cannot be changed.
In his article entitled: ” Three features of blockchain that help prevent fraud ”Published in 2017, IBM notes the three features of the blockchain that can help state agencies prevent fraud and illicit transactions. First, the blockchain is distributed. The company emphasizes the fact that this technology is not centralized and that its control is distributed to all the contributors and participants of the network. Then, IBM specifies that the blockchain is immutable. However, transactions cannot be erased or changed. Finally, the informant giant relates the fact that the data in the ledger is available to everyone.
4- Cryptocurrencies consume a lot of energy.
The energy consumption of cryptocurrencies depends on the type of consensus model used. A project that uses the Proof of Work (PoW) consensus model will necessarily use a lot of energy because to validate a transaction or mine tokens, miners would need one machine or several machines with a high enough computational speed to solve fairly complex equations.
Bitcoin, Ethereum, and a few other cryptocurrencies use the PoW governance model. The energy question poses a lot of problems because its energy consumption is considered too high and exceeds that of many countries. According to CBECI, the most used indicator to assess the “Carbon Footprint”Of bitcoin, energy expenditure is estimated at 118.79 Twh at the time of writing.
China has used the climate argument to drive miners out of its territory. History has finally shown us that this was only a pretext because during the month of September decided to totally ban all activity relating to cryptocurrencies on its territory. Soon after, the authorities launched the Digital Yuan. What a surprise!
According to the CBECI, nearly 39% of the energy in the crypto ecosystem comes from renewable sources. This would represent 37.05 TWh of green energy used by bitcoin. Therefore, a minimum of 1,099,587,799 gallons of green gas emitted on that date.
Galaxy Digital Research released a report this year. He revealed that the banking system consumes twice as much energy as Bitcoin. The proportion is similar for gold because the metal consumes 240.61 TWh this year.
There are many organizations working to provide a much greener bitcoin mining ecosystem. Talen Energy Corporation had announced the creation of a carbon-free bitcoin mining joint venture with TeraWulf Inc.