The Role and Implications of the Bitcoin Mining CouncilMay 29, 2021
Whenever something as big and attention-grabbing as the formation of the Bitcoin Mining Council takes place, it is guaranteed that the crypto community will react and react strongly. Add to the same constellation the fact that one of the members of the same Council is Elon Musk and a true media bombshell is primed and ready. The precise thing occurred right after the news that this organization had been set up in the United States. Predictably, social media, esports forums, and practically any other online location where people converge were set alight with discussion.
This process did not end there and many experts and industry pundits also dropped in to share their view on this initiative. While there is no broader consensus on whether or not such an organization is beneficial or even necessary for the crypto ecosystem, it does seem like something that is here to stay. Because of that and its potential future influence on this field, it is useful to try and get some level of understanding of what Bitcoin Mining Council represents and what could it influence become on the crypto scene in the coming weeks and months, even potentially years as well.
Michael Saylor and Friends
One of the key founding members of the Bitcoin Mining Council is none other than Michael Saylor, the CEO of Microstrategy. His name brings a lot of attention to cryptocurrency, arguably even more than the much more famous Elon Musk. The reasons for this are pretty simple and it lies in the fact that his company under his direct leadership decided to invest over a billion USD into bitcoin. Now, It is one of the biggest institutional holders of this digital currency and because of that, it is one of the key players in the recent bull run of 2021.
So, his presence is already reason enough for many to take the same organization seriously, as Saylor is seen as the key long-term ally of the crypto cause in the mainstream business and IT industry. He said that the key reason for the organization’s existence is the management of concerns regarding cryptocurrency energy usage. More importantly, Saylor explained that the focus is going to be those he called uninformed parties. Of course, he is not alone in this initiative, as many of those uninformed parties in the form of mass media have already showcased in their news reports.
North American Organization
The global critics of the Bitcoin Mining Council are quick to point out that this organization has a really limited scope in terms of geography. Yes, it is focused on the biggest and most relevant crypto market in the world, the United States, but also lacks any global reach. Instead, it chose to deal with the North American region and its mining potential. Because of that, Michael Saylor, Elon Musk, and a handful of other industry leaders gathered from the US and Canada when they created this loose organization.
Presently, they hope to influence the narrative around cryptocurrency energy usage, but also the actual processes that provide the same energy to mining rigs. Firstly, that influence will simply be related to the process of creating reports on precise consumption of energy for the production of BTC and other cryptocurrency tokens. All of this is taking place so that the public perception that bitcoin is not worthy of its energy usage or that its energy is coming from polluting sources does not take root. However, just by looking at the social media chatter, this alone will be a tall order for the same organization.
Strength in Numbers
Analysts have been quick to point out that any initiative of this nature will simply have to have strength in numbers to have any sense. Currently, there are some eight bitcoin mining organizations associated with the Bitcoin Mining Council. While this might not seem that much, together they represent around 10 percent of the combined hash rate of the entire bitcoin cryptocurrency network. That is a solid number for an organization that is only taking shape and starting out. The majority of the rest of the 90 percent of the BTC token network’s hash power comes from a single country – China. Chances of any of them coming to the table and joining the Bitcoin Mining Council in any shape or form are very slim.
However, there are other mining pools and Miner collectives in the US and Canada, along with smaller outfits that also take part in the global mining support of the bitcoin cryptocurrency network. In 2020, The combined hash rate of both countries was less than 9 percent of the global output. But, with the recent bull run, those numbers began to grow almost a year ago. So, they are likely substantially bigger today. Still, even if they are doubled – which is likely an overestimate – they would still be only at around 18 percent of the combined hash rate. Even in that scenario, not all miners and mining pools would be interested in joining or even recognizing the Bitcoin Mining Council.
Influence and Guidance
Several members of the council took the opportunity to explain that they have no desire to change the mining ecosystem in any way. They simply want to help the crypto community present its case that mining is essential for the very important cryptocurrency ecosystem. But, some are questioning this notion, having in mind that one of the members, Elon Musk, is heavily invested in the power storage industry.
This could be an in-road for the same businessman to offer Tesla energy solutions as a cleaner alternative for bitcoin mining operations. Many pointed to this opportunity even weeks ago, when he decided to cut short Tesla Motors’ support for the use of bitcoin tokens for purchases. Having in mind how Elon Musk tends to approach business possibilities and opportunities, the same scenario is more than possible. Sadly, it would also render the Bitcoin Mining Council into nothing more than a complex marketing stunt.