A Better Bitcoin Is On the Horizon
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This week, we're examining how the latest CPI report could impact markets and crypto's latest strides towards a more sustainable future. But first, what is Taproot, and what does it mean for the future of Bitcoin?
What Is Taproot and What Does It Mean For Bitcoin?
Bitcoin developers have begun tests for its first network upgrade in four years. The upgrade, known as Taproot, is scheduled to be activated this November. Taproot is a soft fork to the Bitcoin network that aims to improve privacy, scalability, and speed.
One of the most important aspects of the Taproot upgrade is the introduction of smart contracts to the Bitcoin blockchain. With the addition of smart contracts, developers will be able to build applications and businesses on the blockchain - a feature that is typically done using the Ethereum network.
Last week, Bitcoin developers confirmed that Taproot has successfully been activated on the testnet. The Bitcoin testnet allows developers to play around with the upgrade without any real-world implications for the Bitcoin network. These tests will reduce the likelihood of something going wrong when the upgrade goes live this fall.
A more efficient and scalable Bitcoin could be a good sign for future prices, with some even expecting new all-time highs beyond $100,000.
Bitcoin's Price
Bitcoin's price remains relatively unchanged over the last week, hovering above the $30,000 mark.
Some were expecting a jump in price after the U.S. Bureau of Labor Statistics released the June Consumer Price Index (CPI) report.
The CPI shows an increase in consumer prices of 0.09% over the last month and an increase of 5.4% since this time last year. This is the highest CPI increase seen since 2008 and indicates that inflation is on the rise. Many turn to BTC as a hedge against inflation, which means an increase in BTC demand may be looming, leading to potentially higher prices.
Many hedge funds have already been taking Bitcoin's price decline over the last couple of months as an opportunity to stock up on BTC. A recent article by CoinTelegraph details several hedge funds strategies with a pointed focus on digital assets.
Are you looking to buy the dip? CoinFlip has you covered.
Crypto's Latest Strides Towards Green Energy
Bitcoin's energy consumption has been a hot topic lately, with many crypto naysayers condemning digital currencies for their environmental impact. The consensus among the crypto community is that most bitcoin critics do not fully understand its utility or how it consumes energy compared to other similar sections, including traditional banking.
Nevertheless, cryptocurrencies and blockchain technology are continuing to make great strides towards a more sustainable future. The Bitcoin Mining Council, established in May of this year, recently reported that as of Q2 2021, more than half of bitcoin mining is done using renewable energy.
Ohio Gears up for Carbon-Free Mining
Bitcoin mining is gearing up to become even greener as plans for a new 100% carbon-free mining facility in Ohio are underway. Independent power producer Energy Harbor has announced that it is collaborating with Standard Power to turn an abandoned paper mill in Coshocton, Ohio into a bitcoin mining facility powered by clean nuclear energy.
Ethiopia Could Be a New Green Crypto Hub
As coal-dependent mining operations in China are forced to shut down at the behest of the Chinese government's widespread ban on all things crypto, other countries have a unique opportunity to leverage their renewable resources to pick up where Chinese miners left off. In Ethiopia, lobby group Project Mano is urging lawmakers to build out infrastructure to support energy-efficient bitcoin mining operations as a means to assist the country's struggling economy.
The East African country is abundant with renewable energy, with 90% of its electricity powered by domestic hydroelectric plants. The remainder comes from a mix of wind, solar, and geothermal sources. Many emerging economies like Ethiopia have abundant renewable energy in remote areas with nowhere to go. Creating the infrastructure to direct this energy to bitcoin mining can be an advantageous way to utilize otherwise wasted energy resources while also providing new sources of revenue for the local economy.
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Financial Advice Disclaimer: Nothing in this newsletter constitutes professional or financial advice, performance data, or any recommendation that any specific cryptocurrency, portfolio, index, investment product, transaction, or investment strategy is suitable for any specific person. You assume the sole responsibility of evaluating the merits and risks associated with all financial decisions and should seek the advice of a registered financial advisor when in doubt.
