It’s been a while since people contacted me in droves with questions about cryptocurrencies. Or rather: about what to do with their money, strange coins or bitcoins. Real panic in the tent: anyone who knows me knows that I like to talk about the technical side, but when it comes to trading, you have to be with others.
Of course, it had everything to do with Bitvavo, the largest Dutch exchange. Since mid-December, the Amsterdam toko has been upset: should I remove my assets or not?
My answer remains: I don’t know, decide for yourself. See what information is out there and do what feels right. Some say: oh, it’s not a big deal, I’ll leave it at that. Others have now chosen eggs for the money. One converted it to bitcoin and sent it to a hardware wallet, the other converted to euros and refilled his bank account.
Still, it’s tricky. Suppose Bitvavo really gets into trouble due to a modest bank run, then a major platform based in the Netherlands is gone. Nice for the competition, you might say. I don’t quite agree with that. For many people, it is difficult to keep yourself safe keys and coins to care. We saw that recently with Luke Dashjr’s bitcoins, which he lost using a (presumably) strange construction with a hot wallet. By the way, any normal person would just keep a seed safe and not put a hot wallet on their computer with over 200 bitcoins in it, but that aside.
Okay, back to the tricky stuff: it’s not that crazy to diversify where you keep your bitcoins. The hardware wallet is almost inaccessible in a safe, a small choice on an online platform for when the need arises, that kind of thing. Just like in the wake of the Icesave debacle: Don’t lump everything into one repository. Tip for banks in the Netherlands: Offer bitcoin wallets to your customers. For example, even centrally managed organizations provide some degree of decentralization.
Then there’s another thing: How do you make bitcoin so important that it becomes truly indispensable? That most people no longer say: energy-sucking nonsense! But: necessity! It’s something that comes back to me often.
I think it is necessary during the energy reversal. But what if you need to build a dam specifically to mine bitcoins? No, I think. Fortunately, I know of many initiatives that want to use energy smartly, such as heating greenhouses or simply using excess energy from the sun and wind.
The first initiatives are still small and the second seems to be the subject of much discussion. Or it will happen in the oil state of Texas, which will also raise many eyebrows. Or you have a foundation based in Switzerland which actually carries out its activities on another continent.
While our eastern neighbors are in a lignite dispute, they are also suffering from (locally) too much energy generated by solar and wind. Now I happened to come across via an interview (translated version up Twitter) on Die Abendschau against a mining operation in Augsburg. Besides the strange fact that German often seems more serious to me than, say, English, it’s a small but interesting story. The solar energy from the company in the video is used to mine bitcoin if there is too much energy or if there is simply no production at the factory.
Later in the video, an energy expert from the University of Ausburg speaks, who says that 6 Terawatt hours are reimbursed annually to companies that cannot supply the grid because there is too much supply. According to the expert, it amounted to 800 million euros in 2020.
With all the ambitions for zero-emission energy, there is a moat of energy surplus that we as a society would rather not have to pay for in order to compensate companies that offer it…
As with storing bitcoins, it’s never an either-or world. Yes, central platforms are less secure, but private storage is sometimes less secure too. Yes, bitcoin uses a lot of energy, but energy comes in many forms. And yes, as long as we have an online environment, even live a life there, I think it is useful to have a decentralized network that is not controlled by anyone to be able to transact securely. And sometimes iDeal really is easier.