The Commonwealth Bank of Australia, or CBA, recently announced that it will be making an official foray into the world of cryptocurrency.
This was the first move of its kind by a major Australian financial institution.
The largest of Australia’s big four banks announced that it will begin offering cryptocurrency exchange services to customers as part of the CommBank app.
CommBank customers will have direct access through the platform to ten cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.
A statement from CBA’s CEO, Matt Comyn, confirmed that the new offering was a response to increasing demand for access to popular digital assets.
“We believe we can play an important role in crypto to address what’s clearly a growing customer need and provide capability, security and confidence in a crypto trading platform,” said Mr Comyn.
CBA’s announcement lends a degree of legitimacy to the notoriously volatile digital currencies, at least in the eyes of some more conservative investors.
Regulatory bodies, including the Australian Securities and Investments Commission, or ASIC, have also begun taking a harder look at crypto in recent times.
ASIC recently released official guidance for companies offering cryptocurrency exchange and custodial services, helping them meet compliance obligations.
Additionally, ASIC has created a new crypto-asset category in the application for responsible entities licensing.
Satoshi Nakamoto’s Bitcoin is the original cryptocurrency and has retained the largest share of the crypto market since its introduction in 2009, although the original token’s dominance has waned in recent months.
Bitcoin’s share in the total cryptocurrency market cap contracted from approximately 68% at the beginning of 2021 to around 40% as the year drew towards its end.
According to data from CoinMarketCap, the market share of several leading altcoins, including Ethereum, Cardano, and Tether, increased significantly.
Ethereum’s market share increased from around 10% to almost 19%.
Cardano’s increased from 0.70% to 3.67%, while Tether’s increased from 2.77% to 3.67% of an overall cryptocurrency market cap of $1.91 trillion.
Bitcoin miners earn fractional amounts of the currency by solving complex mathematical problems in order to show proof of work.
Mining the currency requires intense computing power, and most miners employ dedicated mining rigs, which are powerful computers set up to solve problems and passively earn Bitcoin around the clock.
Millions of machines around the world are competing full time, every second, to work out the next number required in complex sequences, thus creating new blocks for the Bitcoin blockchain.
A huge amount of energy is required to power the process.
The issue made headlines earlier in the year when tech billionaire Elon Musk publicly tweeted that his electric vehicle company, Tesla, would stop accepting Bitcoin as payment, citing environmental concerns around the energy-intensive mining process.
While the concept of proof of work being required to add to the Bitcoin blockchain and mine currency is a foundational aspect of the legacy cryptocurrency, it appears there is a new path.
According to Kathleen Breitman, co-founder of the Tezos blockchain network, “no cryptocurrency that has launched in the last four or five years has used proof of work, and that’s because it’s antiquated technology.”
“Using a technology that creates an unnecessary amount of tax on the environment, which, as someone who believes in man-made climate change, I’m very inclined to not endorse,” Breitman added.
Ethereum, the most popular cryptocurrency after Bitcoin, also uses a lot of energy to mine.
However, its developers have planned a transition to a new mining method that requires considerably less energy and is much cleaner for the environment.
Ethereum’s share of the cryptocurrency market almost doubled throughout 2021.
The network is moving to a consensus mechanism called proof of stake.
Ethereum’s developers claim that a move to proof of stake will result in improved energy efficiency, lower barriers to entry with reduced hardware requirements for mining, stronger immunity to centralisation, and an upgrade when it comes to scaling the Ethereum network.
As the environmental unfriendliness of standard, energy-intensive crypto mining has become a hot-button issue and hit the mainstream media, each new crypto or mining venture aims to have a green aspect.
Some are more legitimate than others.
One possibility that meshes well with crypto’s central tenet of decentralisation is the use of solar power as a source of energy to power crypto mining operations.
There are many thousands of rooftop solar systems around Australia, and millions more around the world, pumping out huge amounts of clean, renewable, carbon-free electricity.
It’s well known that energy networks don’t always pay huge sums of money for the power that’s fed back into the grid by private households and businesses using rooftop solar.
In the past, most solar users chose to simply fit a solar system that would produce enough energy to power the household’s needs and not bother fitting a much larger system.
Now that high-quality solar batteries are far less prohibitively expensive than in the past, many users are matching solar batteries to their systems in order to store energy for later use.
Another potential use for excess power generated by private solar power systems would be to power cryptocurrency mining operations.
This could be in the form of a few extra panels added to a home system in order to power a full-time mining rig computer, but could obviously be scaled up for commercial operations.
Most private and commercial solar power system owners use only a fraction of their available rooftop real estate for their current systems, leaving plenty of space to fit additional panels that could potentially be used to power cryptocurrency mining operations.
Entry-level mining rigs are sold for just a few thousand dollars on Amazon and eBay.
By far, the largest commitment for the private user would be the fitment of additional solar panels, batteries, and system components.
For savvy investors willing to do a bit of maths and some research, a marriage of cryptocurrency and solar power could be the future.
