It’s very difficult to explain to most people that the world’s population is growing “exponentially.” In a few countries, the population has stopped growing and is shrinking. Most of the times, when politicians frantically try to sell you the idea that population is shrinking, it isn’t – it’s just that the number of people able to pay taxes to the state (and fund politicians’ paychecks) is shrinking.
As an example – retired people generally cost the state money to keep alive. Sick people, ditto. Politicians with a clear economic agenda are by and large not overjoyed with the aged and otherwise unproductive not working. But even in places such as Russia there’s still 0.2% population growth, and any growth doubles the population over the long term. From the perspective of the Russian state and policy makers, 0.2% is insufficient, since the result of such comparatively low growth means Russia is eventually (and for several decades) left with comparatively too many old people.
The unchecked growth of human population on the planet has been nothing short of absurd in the last century. Even a casual glance at a population graph shows us that human numbers have spiked, and are still going up worldwide. We also know that the UN has been adjusting growth numbers consistently upwards in the last few years and is now projecting an eventual world population well in excess of 13 billions, and “population growth not leveling off beyond 2100.”
Under given energy and resource constraints, and with the current biosphere degradation, that’s just impossible. Some people (mostly conservative people) may think indefinite growth is possible, or that “nature will generate it’s own solutions,” but a moment of honest thinking should show anyone that population growth will eventually become an intensely painful issue.
Fertility Must Become Subject to Politics
Most people worldwide are used to considering the right to have children as a “sacred” natural right. But you can already see the tide of public opinion turning. When some arguably irresponsible guy fathers 30 children with various unwed mothers, taxpayers take notice and object. Taxpayers realize that the mothers will need some form of child support, and if the guy in question is not able or willing to provide child support, taxpayers are left holding the bag.
Right now procreative freedom comes with no consequences to “irresponsible” fathers or mothers as shown by the cases of Desmond Hatchett or the Duggar family. But those are two examples of people who make lifestyle choices that eventually will contribute to “intense pain.” It won’t be many decades before voters realize that ever increasing population numbers will cause ever worse living conditions for everyone. We are not there yet. Voters still weigh the right to procreate as sacrosanct. But someday in this century the unrelenting tide of doubling population rates will clash with the natural urges of entitled individuals. There will come a point where intense debates over population growth will start.
Right now in most countries the idea that we as a society might seek to impose constraints on individual rights to procreate is considered as unthinkable and too radical. I can easily show everyone reading this article applicable studies of overpopulation and resulting resource scarcity, and with the unrelenting doubling population rates “every several decades” we are pretty much almost there. Before 2050 individual countries will yield to the concerns of the voters and limit population growth.
In his famous “Known Space” series of novels, Larry Niven explored those conclusions. In his stories Niven described an Earth with 18 billion human beings. On such a world, the population pressure implies actual “intense pain” for the majority of human beings. Larry Niven’s conclusion was fairly simple and self-intuitive – at some point fertility must become subject to politics. Politicians will ration procreation rates, and once politicians are voted into office to limit birth rates, they will immediately try to impose radical policies. That means that the distinction between desirable births and not so desirable births will be made.
There will be a relatively brief flurry of protest over a few decades, but population reduction policies will be enacted, which will be supported by first local and then global consensus. Eventually, all the world will agree that a common authority must be put in place to use state force to limit human births. The criteria for selection of desirable births and elimination of non desirable ones may hinge on the ability of prospective parents to generate income or certain hereditary ailments (vis-a-vis measurable health). Other contributing factors to being granted a license to breed may be certain artistic, scientific or athletic accomplishments.
Solutions Must Be Democratic, Consensual, and Nonviolent
These choices should be inspired by sound science and democratic consensus. The voters will demand an end to overpopulation, and they’ll get their demand met. Politicians will then nestle in the demand niche and seek to come up with what they perceive as constructive policies for the future.
I am well aware that this conclusion may be offensive to many people. The idea that in one or two generations we’ll first see local US and EU laws constraining population growth, and then we’ll see those laws expanded to include the whole world, is still unthinkable and offensive. But public opinion is a very malleable thing, and exponential population growth can’t be allowed to continue for much longer on a planet with limited resources.
The most important question is – given the gravity of this conclusion, how can we as discerning and educated citizens of the most powerful world’s economies start a rational, just and sensible discourse about this problem. How can we guide our political system toward the best possible outcome? There is a lot that we can do at this very moment to start debating the issue democratically, and by doing so to steer policy away from unmitigated tyranny, disaster and the worst fascism the world has ever known.
The goal is to avoid killing people, which has been the default policy of states with regards to overpopulation for several thousand years. Large scale industrial wars are no longer a rational option – even a minor nuclear conflict between India and Pakistan would be globally catastrophic. We should, therefore, conclude that all solutions to the overpopulation challenge must be democratic, must be consensual, and must be nonviolent.
Images from Perati Komson and Shutterstock.
Will CME and CBOE Change the Course of Bitcoin Trading?
There has been a lot of media buzz in the investment world around the introduction of bitcoin futures trading. Two of Chicago’s major firms, namely Chicago Mercantile Exchange (CME Group Inc) and Chicago Board Options Exchange (Cboe), have announced plans for bitcoin futures trading on their respective platforms, with the latter already launching its contract on Sunday. While the main fear regarding future bitcoin trading at this point is price manipulation, investors are skeptical about how the whole situation will pan out.
Fear of Price Manipulation
As mentioned earlier, price manipulation is a big threat to the profitability of bitcoin futures trading. According to the Commodity Futures Trading Commission (CFTC), they will only play the role of a derivatives regulator and not actually manipulate the underlying cash contract. Exchanges will continue to play a major part in handling the underlying cash contract, keeping it safe from the dangers of manipulation. Since the underlying cash market of bitcoin is not regulated, the CFTC has also warned investors about this fact.
Figure 1: Hypothesised Daily Trend of Bitcoin Values
The Role of CBOE and CME in Bitcoins Trading
The CBOE and CME both have been competing to become the market of choice in the United States. CBOE has already rolled out its bitcoin futures contracts, which they call XBT futures, with a limited free trading offer for the rest of the month for its customers. The rival CME group, on the other hand, is scheduled to release their version of hitcoin futures Dec. 18.
These announcements played a pivotal role last week, influencing traders and institutional investors to perform bitcoin futures trading in a more recognized and secure market. The price of a single unit of bitcoin was also affected, jumping from a formidable $10,000 to a new record high of close to $20,000. The main reason for this can be attributed to investors who understand that the exchanges will bring liquidity and price stability on an otherwise unstable and volatile cryptocurrency.
Here are just some of the ways bitcoin futures trading will change the course of bitcoin trading significantly.
- Risk: There’s no denying that bitcoin’s past has been marred by volatile spikes and crashes. Some of these price changes have occurred over a very short period, enabling traders to recover their positions within a short period of time. However, with the introduction of CME and CBOE futures trading, the United States markets might prolong the decline through the “domino” effect of selling futures trading. Moreover, a snowballing effect through selling can affect the entire market. The Futures Industry Association has already stressed on the bitcoin volatility issue and has requested for some form of “guarantee fund” to clear settlements to the community.
- Unstable Exchanges: Besides the CME and CBOE, the majority of bitcoin exchanges in the world come from unregulated markets without proper overseeing or supervision. This is problematic for traders since such exchanges form a reference point in price for the asset. Frequent outages in exchanges are a real threat to bitcoin’s price, often resulting in wild price swings. For instance, Coinbase and IG group, two famous bitcoin exchanges stopped trading on a Friday. As a result, bitcoin’s price shot up and subsequently crashed within 20 minutes.
- Increased Volatility: Futures markets work very differently than commodity markets, which draw in a lot of traders as well as speculators. When it comes to bitcoin, the recent Whipsaw in price is unfavorable for the introduction of new traders in the market at this point.
The increase in speculation surrounding bitcoin price will result in even more price volatility if the number of traders is increased. Many people are of the opinion that the recent parabolic price curves will attract traders with added incentives to play with its price.
- Trading Profits: The aspect of trading profits becomes more complicated with the CME’s contract rules. CME’s contracts have price limits which are 20% above or below bitcoin’s reference price. This is done in order to curb unpredictability and regulate volatility. The sole purpose of these price limits is to minimize the adverse impact of the cryptocurrrency’s wild price swings on futures markets.
Economists, however, have stated that this might result in an opposite effect, where the trader’s profits are compromised significantly. This is due to the fact that the reference price of the whole bitcoin market is based on exchanges, which are largely operational in unregulated markets. Such unregulated markets see frequent price swings in excess of 20%. This directly results in futures traders who will no longer benefit from the spike of a greater than 20% increase in bitcoin prices, at the aforementioned exchanges.
Side Effects of Bitcoin Futures Trading on the Market
The bitcoin market is poised to receive institutional money as a result of futures trading. It will also open up various avenues of asset investment, as many funds that are currently prohibited from dealing in bitcoin-like alternative assets will also be able to participate in the trading exercise.
This, however, can be a major problem, as investors won’t actually be pouring their funds into the bitcoin market, but rather acquire synthetic derivates instead. No extra money goes into bitcoin itself, as these futures do not require ownership of actually bitcoins.
The introduction of bitcoin futures trading in two major firms is definitely a blessing as well as a curse. Both exchanges are seeking to exploit bitcoin’s popularity by attracting interest from Wall Street. Institutional investors have also been keen to trade the asset in a more recognized and regulated environment, which have also seen the increase in CME/CBOE shares by at least 9%. Normal traders are also required to pay higher than normal accounts to backstop their bitcoin trades and allow continued funding for their trade positions. However, it still boils down to the trader’s decision and his or her understanding of the movement of the bitcoin markets, which have in the past experienced significant and unpredictable volatility.
Featured image courtesy of Shutterstock.
Power Consumption for Bitcoin Mining Is Now Ranked 61st in the World
Bitcoin prices have been towering in the past couple of weeks. This is cause for celebration for users who have heavily invested in the cryptocurrency; but, it appears the value of bitcoin is not the only thing that has hit the roof in 2017. Bitcoin mining energy consumption has also reached new heights.
A research study conducted by PowerCompare—a U.K.-based company for energy comparison tariff—found that the average power used to mine bitcoins this year has already gone beyond the annual energy consumption for some 159 countries. In particular, the global average power spent on bitcoin mining has far outstripped the energy consumption in Ireland and a couple of African countries.
This new study was based on data from Digiconomist, whose current estimation of power used to mine bitcoin hovers around 30.14 TWh annually. This figure is way above Ireland power consumption that currently stands at 25 TWh yearly. In fact, recent research from Dutch Bank ING found out that one bitcoin transaction consumes sufficient electricity to power an average household for a whole month.
At this rate, if bitcoin miners were a single country, it would be positioned 61st in the world based on power consumption, comparable to Slovakia and Morocco. PowerCompare has already predicted that if the trend continues, bitcoin mining will expend the entire world’s electricity by February of 2020!
Why bitcoin mining is increasing power consumption levels
What makes bitcoin mining an energy black hole?
Apparently, it is the computational requirements that process the complex cryptographic problems that miners must solve to be rewarded with the cryptocurrency. Just like other notable cryptos such as Ethereum and Litecoin, Bitcoin depends on miners to validate transactions performed in their respective blockchains.
To verify transactions, miners are required to solve complex mathematical problems, which on becomes increasingly difficult as more and more miners join the mining bandwagon. The more byzantine the cryptographic problems, the more the processing power that is needed to solve them.
In the case of bitcoin—the most popular cryptocurrency—a multitude of miners now make it absolutely necessary to use ASICs (Application-Specific Integrated Circuits) which consume considerable amounts of electricity. At present, ASICs have been designed to provide far more efficient computations, both in terms of the hash rate and power consumption when compared to CPU or GPU mining.
But the ASICs haven’t really resolved the hurdles of power consumption.
Ideally, the use of ASICs meant that the total time required to validate new blocks drastically reduces too. This hasn’t happened because of the way the bitcoin protocol was conceived. Apparently, the mining difficulty in bitcoin ensures that the total time taken for generation of new blocks must be kept constant.
As a matter of fact, the Bitcoin network automatically alters the difficulty level for bitcoin mining to ensure the discovery of new blocks every 10 minutes by miners based on two factors. First, there is the global block difficulty that forces valid blocks to have a hash value that is below the target to ensure the difficulty level is maintained.
Second, the number of miners that are actively participating in the mining process has been soaring, meaning the difficulty level has remained constant for a while now. Also, the mining difficulty automatically adjusts after every 2016 blocks on the Bitcoin network. Depending on how many users were actively mining – together with their combined hashpower—and the time it takes to find the 2016 blocks, the difficulty can either go up or down.
As the mining difficulty increases, miners should acquire more powerful hardware to accommodate for the adjustment which again increases the computational electricity. It is also worth noting that there is no maximum mining difficulty that has been set for the Bitcoin network. There is a possibility that the mining difficulty will continue to rise until all the Bitcoins are mined have been mined by the year 2140.
This means that power consumption in Bitcoin is not likely to decrease in the near future.
Challenges of mining Bitcoins
Here are some challenges of Bitcoin mining:
#1: Environmental hazards
The massive growth of cryptos has set up an exponential demand for processing power. The inordinate amounts of power required to mine bitcoins make it an environmental hazard since much of the earth’s electricity is still generated from greenhouse-gas-generating fossil fuels. This implies that bitcoin mining could be contributing to the climate changes and global warming.
#2: Stumbling block for mass adoption
The bitcoin cryptocurrency was conceived as a decentralized, peer-to-peer and trustless currency free from regulations of government agencies and financial institutions such as banks. Unfortunately, the adoption rate is discouraging. This can partly be attributed to the high energy consumption costs.
A recent study conducted by researchers from the HINUI (Hamilton Institute at the National University of Ireland) found that the cost of Bitcoin mining on the commodity hardware at present far exceeds the price of the rewards. In fact, Bitcoin mining has now been left to the big players who have the money to buy expensive ASICs with some of them leasing their hardware to small players in the so-called cloud mining.
#3: Rise of illegal piracy
The rise of bitcoin values is a cause for celebration in the crypto universe. It means that the entire global community is beginning to appreciate the value of cryptocurrencies in the world economy. However, mining energy consumption is soaring at an alarming rate. The quicker we find mechanisms to make bitcoin and other cryptocurrency mining electricity use “greener,” the better it would be for the Blockchain technology that is often heralded as the next internet.
Featured image courtesy of Shutterstock.
Cryptokitties Made Us Realize These Biggest Industry Challenges
You may not be in the loop but Cryptokitties have just surpassed the major distributed cryptocurrency exchange such as EtherDelta to become the largest smart contract on the Ethereum network by gas consumption. As of writing this, the Cryptokitties are accounting for slightly more than 14% of the Ethereum’s transactions in over 1,500 blocks according to ETH Gas Station.
This is a staggering volume of traffic for an online game that, on the surface, appears quite bland. But the popularity of this cryptocollectible has underscored one of Ethereum biggest downsides which were never envisioned: lack of scalability. According to Etherscan, Ethereum transactions have increased six-fold since the game’s release on 28th November 2017.
Already some investors are raising concerns that this frivolous game is crowding out more genuine and serious business users in the network. But how exactly have Cryptokitties phenomenon congested the Ethereum network?
Well, in “Cryptokitties Made Us Realize These Biggest Industry Challenges” we dive deeper to explore how the Cryptokitties phenomenon has contributed to Ethereum’s scalability challenges. Let’s jump in.
Challenges of Cryptokitties
Here are some challenges the Cryptokitties phenomenon presents for the Ethereum ecosystem.
#1: Scaling challenges
While the sensations of Cryptokitties is great for Ethereum adoption, the pressure it has placed on the Ethereum blockchain means that developers have to work out a scaling solution. The traffic is making it extremely difficult for users to play the game, and many transactions such as buying and selling of cats are taking a lot of time to process with some demanding multiple attempts.
All of these intricacies are related to the Ethereum blockchain’s throughput limit that is set at roughly 15 transactions per second. Until the throughput limit is expanded, Cryptokitties have to contend with the current 15 seconds which is shared among other popular smart contracts as well. There’s no doubt that Cryptokitties has become popular within a short time and raising the bar for gas auctioning in Ethereum.
With Ethereum protocol soon hitting its capacity, research into new scaling options to help the distributed technology scale is needed soon. But this scaling issue isn’t the only problem Ethereum protocol has to contend with. Cryptokitties is just one viral game that hasn’t even spread across the tech universe. In fact, it was just launched a couple days ago (28th November)!
If Cryptokitties (one viral game) can slow down the entire Ethereum network, what will happen when the blockchain grows to accommodate real-world apps? Obviously, a long term solution is required. The Ethereum community can’t afford to have scaling challenges whenever a great smart contract hits the decentralized web.
#2: Divergent opinions about Ethereum growth
Just as is the case with the bitcoin scaling problem, we’re starting to see cracks in the Ethereum blockchain community as each side takes diametrically opposing sides about how to scale the network. For some time, bitcoin has been experiencing near or sometimes full blocks with transactions taking nearly 20 to 40 minutes to be validated on the blockchain.
Some Ethereum enthusiasts are already suggesting that miners should increase the so-called gas—a measure of computational effort in Ethereum—limit (just as is the case with bitcoin’s block size limit). Ideally, the gas limit determines the kind of operations such as the addition of numbers, calculation of hashes or even sending transactions that you can compute in Ethereum. Each operation has a fixed set of gas attached to it.
By setting the gas limit, we’ll be capping the maximum amount of gas which can be included in Ethereum block. With a maximum of gas in place, the block size and the speed of the network will be greatly be impaired. Ideally, this proposal is hinged on the philosophy that developers shouldn’t decide on the ideal gas limit but market actors such as the miners, the applications, and the investors.
As you are aware, the block size and speed of the network are at the core of Ethereum protocol. Altering any of them completely does away with Ethereum’s vision. Also, Ethereum miners are unlikely to agree to this proposal as it has its own undesirable effects. As of writing this, the Ethereum network uncle rate is already peaked at over 30% compared to the network DoS (Denial of Service) attacks.
This implies that at present, every third block gets orphaned. Now raising the gas limit is most likely going to make the current mining situation even worse. Without considerable enhancements on how large blocks will be processed using current implementations and decentralized in the network, increasing the gas limit isn’t feasible just yet.
While high-end systems will still be able to validate the heavy blocks within several 100 milliseconds, low-end systems are already gobbling up few seconds to validate their transactions and distribute the block.
#3: Other ICOs are at a risk
The Ethereum gas market is an unknown equation that allows users to increase gas and ensure that transactions such as the sale or breeding can take place in time. At present, Cryptokitties cautions users of keeping an eye on gas consumption, to avert high prices. An acutely high gas price would, in fact, expedite the transaction but make it flop completely.
The lackluster performance and gas speculations may make users abandon the Ethereum network completely. Bitcoin has been attracting speculative investments lately because of the unprecedented high prices that have been hovering north of $15,000. Now the presence of Cryptokitties and their network demands places hundreds of ICOs implementing their projects on Ethereum network at risk.
The specifics of the cryptographic computation may imply that smart contracts will never quite work to the levels anticipated by investors in the ICOs. This means that these ICOs are likely to fail because of the scaling challenges presented by Ethereum network.
It’s no secret that Ethereum—and its smart contracts—has literally revolutionized applications. However, the launch of Cryptokitties has raised more controversies regarding the future of Ethereum protocol. The Ethereum protocol was once viewed as a perfect replacement for Bitcoin. But at these rates of network jamming, users are becoming cynical.
While I am not a futurist, one thing is certain: there are tell-tale signs of Ethereum fracture. Amidst all the hype and uncertainties about the scaling problem, it’s only proper for you to continue speculating before investing in Cryptokitties.
Featured image courtesy of Shutterstock.
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