Expert Bina Ramamurthy discusses the pros, cons and future of alternative currency in New York and beyond
Dr. Bina Ramamurthy is the director of the ThinkLab Blockchain at the University of Buffalo. She is also a cryptographic miner. This puts it at the forefront of the industry, which poses a challenge to the traditional currency and raises environmental issues due to its energy demand.
Blockchain and cryptocurrency are mysteries to many people, so to understand the interview, let’s define what we’re talking about.
Blockchain, introduced in 2011, includes computers and servers programmed to solve complicated mathematical problems in an ongoing virtual ledger. This work is handled by so-called “crypto miners”, who earn cryptocurrency – most commonly Bitcoin – when a problem is solved. Then they can exchange it for another currency or keep the property.
Cryptocurrency is an alternative and decentralized form of currency. Bitcoin is the most popular form of this digital currency; a coin is currently worth $ 31,666.70. Cryptocurrency can be used to pay for goods and services; It does not exist physically, as a coin or a dollar bill, but virtually as data.
External buyers can enter the action without a mining operation, buying part or part of a Bitcoin through cash transactions or exchanges in an exchange.
The appeal of cryptocurrency is its decentralized nature; it knows no national borders. It evades banking and government policies and practices. Critics argue that the intensive use of energy-grabbing computers is bad for the environment and that its unregulated nature opens the door for use by criminals.
The state legislature is considering a two-year moratorium on new mining operations seeking to settle in the state using energy from fossil fuels. It would also restrict the expansion of current operations by doing the same.
Investigative Post reporter Layne Dowdall interviewed Ramamurthy the week of May 1st.
Dowdall: Describe a cryptographic mining operation for me.
Ramamurthy: Racks and racks and racks of high power computers and servers. They are shaking 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 book takes a lot of energy and that’s why they call it mining. They’re not digging into the ground, but they’re making coins in the process. If you keep trying, at some point you solve the puzzle and you get rewarded.
So there’s a mining operation on Finger Lakes, there’s a mining operation in China, there’s a mining operation in Iceland, there’s an operation in Pittsburgh, there’s an operation in Tennessee, there’s an operation in Austin. Everyone competes to solve the puzzle. If they solve the puzzle, they can write the block in the blockchain, the reward for that is the cryptocurrency.
The more power you have, the more likely you are to solve the puzzle before others. So, for example, if you have to solve the riddle yourself, it will take you 10 days. If you’re employing 10,000 people, you might be able to fix it in an hour.
Right now, that cryptocurrency reward is worth about $ 30,000, which I would say is a good incentive for mine. Who are the people behind mining, and are there many here in western New York?
There are many miners with large mining platforms (server racks) and there are people who carry out small mining operations. Sometimes individuals come together to form a group of servers to improve the chances of them blocking a block and being rewarded. In this case, the reward is distributed among the pool participants.
One of the largest cryptographic operations in the United States is located in Rochester, Foundry LLC. Not only do they do crypto mining, but they also focus on research and development around cryptocurrencies and blockchain. Full disclosure, Foundry donated to UB’s ThinkLab Blockchain research.
I’ve heard about cryptocurrencies used by those involved in criminal activities.
There are also crimes in the cryptographic world as well as in the frontier land. But he is not the only one. There are people who take advantage of it, either deliberately or by mistake, accidentally. It’s like any other industry. It’s like the old west, it’s the early days. Everyone is trying to find a way. And people who are committing crimes are also looking for opportunities. As I see it, people are noticing [the crime] because it’s making a lot more noise than what’s going on.
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Why do you think there is such opposition to mining operations as we are seeing from community members in North Tonawanda and Niagara Falls?
That process of consensus and solving that puzzle to write something in the book has a lot of energy. To run stacks and stacks and stacks of machines, you need power. You also need to cool the heated racks that run 24 hours a day, 7 days a day to solve the puzzle.
If you’re going to spend more money on power than on reward, that’s a debatable question, right? You have to balance what you invest with the reward you are receiving. That’s why operations migrate to places where there is cheap or free energy, which can mean using non-renewable energy sources. We have hydroelectric power in New York. In Pennsylvania, they are using all the coal coal, which is very, very bad. And in Texas, they’re using all the leftover sites from all these oil wells to run the platforms.
It’s like having a factory next to your residence. Would you like noise and pollution and all that? Residents don’t want their place to be disturbed with all that stuff. I think everything could be taken care of by zoning and other regulations.
There is new legislation being considered in New York that would restrict new mining operations from being installed in old power plants that use fossil fuels as their main source of energy. It would also paralyze any expansion of existing mining facilities. What is your opinion?
You don’t want to hinder innovation, we want to be at the forefront of technology. At the same time, we also want to be wary of climate change and other related effects. These are some things that can be written through policies and regulations. If lawmakers do that, the industry will follow suit and create responsible innovation.
This has happened with other industries. Look at the soft drink industry, there’s a five-cent surcharge for cans. Planes and cars move towards zero net emissions. And then look at the plastic bags transformed into paper bags. These are things we have done responsibly. It doesn’t mean we’re going to ban the car because it’s a gasoline consumer. Make it better, make it efficient. So that’s where we are in blockchain and cryptocurrency. Everyone in their own interest is trying to improve it.