Q&A: explanation about cryptocurrency and blockchain

Expert Bina Ramamurthy discusses the pros, cons and future of alternative currencies in New York and beyond

dr. Bina Ramamurthy is director of the Blockchain ThinkLab at the University at Buffalo. She is also a crypto miner herself. This puts it at the forefront of the industry, which is challenging traditional currencies and has led to environmental concerns due to energy demand.

Blockchain and cryptocurrency are mysteries to many people, so to understand the interview, let’s define what we are talking about.

blockchain introduced in 2011, includes computers and servers programmed to solve complex math problems on a continuous virtual register. This work is handled by so-called “crypto miners”, who earn cryptocurrency – usually Bitcoin – when a problem is solved. They can then exchange it for another currency or keep ownership.

Cryptocurrency is an alternative and decentralized form of currency. Bitcoin is the most popular form of this digital currency; one coin is currently worth $31,666.70. Cryptocurrency can be used to pay for goods and services; It does not exist in physical form, such as a coin or dollar bill, but virtually in data form.

Third-party buyers can participate in the promotion without a mining operation, buying all or part of a bitcoin through cash or exchange transactions.

The appeal of cryptocurrency is its decentralized nature; it knows no borders. It circumvents banking and government policies and practices. Critics argue that the extensive use of power-hungry computers is bad for the environment and that their unregulated nature opens the door to criminal use.

The state legislature is considering a two-year moratorium on new mining operations that want to move into the state using fossil fuels. It would also limit the expansion of current operations by doing the same.

Investigative Post reporter Layne Dowdall interviewed Ramamurthy the week of May Day.

Dowdall: Describe me a crypto mining operation.

RamamurthyRacks and racks and racks of powerful computers and servers. They calculate the numbers to solve the puzzle. It is very difficult to solve, but very easy to prove. And solving that puzzle to write something in the ledger takes a lot of energy and that’s why they call it mining. They don’t dig in the ground, but make coins in the process. If you keep trying, at some point you’ll solve the puzzle and be rewarded.

So there’s mining in Finger Lakes, there’s mining in China, there’s mining in Iceland, there’s mining in Pittsburgh, there’s mining in Tennessee, there’s mining in Austin. They all compete to solve the puzzle. If they solve the puzzle they can write the block to the blockchain, the reward for this is cryptocoin.

The more power you have, the more likely you are to solve the puzzle before the others. So, for example, if you have to solve the puzzle yourself, it will take 10 days. If you employ 10,000 people, you can solve it in an hour.

Right now, this crypto coin reward is worth around $30,000, which I think is a pretty good incentive from me. Who are the people behind mining, and are there many of them here in Western New York?

There are many miners with large mining rigs – server racks – and there are individuals who run small mining operations. Sometimes individuals come together to form a pool of servers to increase their chances of mining a block and getting rewards. In this case, the reward will be distributed among the pool participants.

One of the largest crypto businesses in the United States is located in Rochester, Foundry LLC. Not only do they engage in crypto mining, but they also focus on research and development around cryptocurrencies and blockchain. Full Disclosure, Foundry Donated to UB Blockchain ThinkLab Research.

I have heard that cryptocurrencies are used by those involved in criminal activities.

There are crimes in the crypto world, just like in, you know, the borderlands. But that’s not all. There are people who abuse it knowingly or accidentally. It’s like any other industry. It’s like the old west, it’s the beginning of time. Everyone is trying to find a way. And people who commit crimes also look for opportunities. The way I look at it, people notice [the crime] because it is much louder than the real thing.

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Why do you think there is opposition to mining activities, as we see from community members in North Tonawanda and Niagara Falls?

This consensus process and solving this puzzle of writing something in the ledger takes a lot of energy. You need energy to make batteries and batteries and batteries of machines work. You also need to cool the heated racks that rotate 24/7 to solve the puzzle.

If you spend more money on energy than on rewards, that’s arguable, right? You need to balance the amount you invest with the reward you get. This is why operations migrate to places where there is cheap or free energy, which can mean using non-renewable energy resources. We have hydro in New York. In Pennsylvania they all use mud cabbage, which is very bad. And in Texas, they use all the remaining locations of all these oil wells to run the oil rigs.

It’s like having a factory next to your home. Do you like noise and pollution and stuff? Residents do not want their property to be disturbed by this. I think this can all be regulated by zoning and other regulations.

New York City is considering considering new legislation to prevent new mining operations from moving to old power plants that use fossil fuels as their main source of energy. It would also halt any expansion of current mining facilities. What is your position?

You don’t want to stand in the way of innovation, we want to be at the forefront of technology. At the same time, we also want to be careful about climate change and other related effects. These are matters that can be written down through policy and regulations. If the legislator does this, the industry will follow suit and ensure responsible innovation.

It has happened to other industries. Look at the soft drink industry, there is a surcharge of five cents. Planes and cars are heading for net zero emissions. And then look at the plastic bags that have turned into paper bags. These are things we’ve done responsibly. This does not mean that we are going to ban the car because it uses a lot of gas. You make it better, you make it efficient. So this is where we are in blockchain and cryptocurrency. Everyone tries to improve it in their own interest.

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