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Bitcoin’s Top Rival Is Up 90% and Ready to Ditch Mining

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Ethereum
  • Bitcoin’s Top Rival Is Up 90% and Ready to Ditch Mining

Marco Streng’s computer servers are what make Ethereum tick.

Thousands strong, they whir day and night, solving the complex math riddles that are essential to verifying transactions on the hottest new platform in the world of cryptocurrencies and blockchains. Without these machines, or those deployed by Streng’s biggest rivals, there would be no Ethereum.

But mining, as the practice is called, is costly and inefficient and, frankly, a bit weird. And Ethereum’s developers have always envisioned a time in which the cumbersome process of brute-force computing would be replaced by a system that relies simply on collateral. That time, some four years after the network was first proposed, is now. The developers want to put this “proof-of-stake” model, called Casper, into place by year-end.

The stakes are high. If Ethereum is going to take advantage of the potential that companies like JPMorgan, Microsoft and IBM see in its underlying transaction technology, the blockchain, as the potential backbone that could reshape modern business and finance, it needs to gain wide adoption to become something of a de facto standard.

Without mining, Ethereum “will be more usable, more secure and more scalable too,” said Vlad Zamfir, who’s been working on Casper since 2014.

Secure Transactions

The main draw of the blockchain is that it’s a cryptographically secured list of transactions that can be shared, which backers say could dramatically improve how financial services, supply-chain and health-care industries are run. (Think immediate settlement of bank transfers and securities trades, as well as near-real-time tracking of food products or research samples.) Ethereum also allows for the use of “smart contracts,” or pieces of computer code that make the terms of such agreements operate automatically.

Miners have been critical to the growth of Ethereum. The market for ether, the digital currency used to pay miners who support the network, has soared 90 percent this year alone. It’s the second-most popular cryptocurrency behind bitcoin, which has gained 24 percent in the same span, setting records almost every day as investors look to hedge against potential global uncertainty and hope for a bitcoin-based exchange-traded fund to get regulatory approval.

Even before Ethereum was first released in 2015, developers had envisioned moving away from the mining-based model, known among tech geeks as “proof-of-work.”

Tougher Computations

As the network gets more popular, the computations the miners need to complete to validate transactions get harder and harder. Not only has this created the potential for bottlenecks (which already plague bitcoin), it’s also set off an environmentally taxing arms race among the biggest miners, which run server farms consuming vast amounts of electricity.

And to many techno-utopian enthusiasts, using all that computing power to continually solve what amounts to pointless problems is a big waste.

That’s where Casper comes in.

Rather than rewarding miners with the most computing power, the “proof-of-stake” model requires that users put up collateral if they want to collect fees for validating transactions. The more collateral you put up, the more money you can get paid for verifying transactions.

It would take power away from miners like Streng, who have to approve software changes, and make it easier to implement improvements on the fly. A handful of bitcoin miners in China have already hamstrung some attempts to increase that cryptocurrency’s capacity. (Miners can’t vote against the switch.)

The move will make Ethereum “more attractive in large-scale applications,” said William Mougayar, author of “The Business Blockchain.”

Hyperledger, a blockchain venture with more than than 100 members including IBM, JPMorgan and American Express, could adopt Ethereum’s “proof-of-stake” model if it’s successful, according to Brian Behlendorf, the consortium’s executive director. It could also help put the network in “a league of our own,” Andrew Keys, head of global business development at startup ConsenSys, the world’s largest Ethereum-centric blockchain software engineering company.

No Sure Thing

Making “proof-of-stake” work is hardly a foregone conclusion.

Casper’s rollout has been delayed before. And the use of deposits potentially increases the risk of hacking. (While Zamfir said he’s working to make sure hackers can’t steal deposits, he couldn’t rule out the possibility, however remote, that an attack could, in effect, delete the money.)

Streng, who stands to lose out if Casper is implemented, is wary.

“There’s a lot of incentive for people to game the system,” he said.

Trust in Ethereum was badly shaken last summer, when a hacker stole millions from a project called the DAO. Developers had to rush to implement a software change, which ended up splitting the Ethereum community in two. Now, each operates its own, separate blockchain.

Zamfir says the benefits outweigh the risks. One of the biggest is “transaction finality.” Unlike most blockchain technologies, which require multiple verifications, settlement on Casper can occur much faster. With some enhancements, the feature could ultimately enable Ethereum to process more payments faster — a key selling point for financial companies.

‘Early Stages’

Mona El Isa, a former Goldman Sachs trader who runs Melonport AG, which builds software for fund managers who invest in digital assets on Ethereum, is confident that developers can work out any kinks with Casper.

“In these early stages of this new technology, you can’t expect everything to go right,” El Isa said.

If Casper ultimately happens, Streng says it won’t be the end of the world. He can redeploy his servers to mine other cryptocurrencies or become a depositor on Ethereum instead. But he isn’t holding his breath just yet. Implementing such a sweeping change isn’t going to be easy and it’s still possible the plan could be scrapped altogether, he says.

“The developers have very bright minds,” he said. Nevertheless, “they wouldn’t risk the Ethereum network, in my opinion.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Energy

Equatorial Guinea to Launch Vision on Post-COVID Energy Transition Plans with Report and Film

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The Africa Energy Series (AES): Equatorial Guinea 2021 campaign – comprising a report and a documentary – will serve as a critical tool to navigate the energy investment landscape in one of Africa’s more mature petroleum producing markets; Equatorial Guinea has largely been able to sustain its pace of engagement with global investors in the face of COVID-19, forecasting $1.1 billion in FDI in oil and gas activities in 2021; The third edition of the AES: Equatorial Guinea 2021 report will be released at Africa Oil & Power’s U.S. Africa Energy Forum 2021 networking event in Washington, D.C. this July.

Africa Oil & Power is proud to announce the upcoming launch of its Africa Energy Series (AES): Equatorial Guinea 2021 investment report and documentary, as part of a multimedia campaign set to champion the domestic energy sector and shape the West and Central African energy narrative.

The dual-language publication will target key developments driving a post-COVID-19 recovery in Equatorial Guinea – namely, the growth of petroleum and power industries; regional gas monetization initiatives; a clean energy transition; the impact of environmental, social and governance criteria; and expansion of the national diversification agenda.

A 30-minute documentary will provide a visual complement to the publication, featuring first-hand interviews with government officials, private sector players, industry regulators and energy experts discussing Equatorial Guinea’s unparalleled ambition and future plans.

“From spearheading regional gas monetization initiatives to drilling new exploration wells as early as Q2 2021, Equatorial Guinea continues to cement its reputation as a progressive, dynamic force on the African energy stage,” said H.E. Gabriel Obiang Lima, Minister of Mines and Hydrocarbons. “The Africa Energy Series publication in conjunction with a detailed documentary format, gives us the voice to showcase the depth of our full-stream investment opportunities to a global audience.”

Since the onset of COVID-19, Equatorial Guinea has been proactive in safeguarding opportunities for foreign investors and continuing to drive capital into its hydrocarbon resources. In February, Chevron achieved first gas flow from the successful execution of its Alen Gas Monetization project, a $475-million investment representing the first phase of Equatorial Guinea’s Gas Mega Hub masterplan.

The Ministry of Mines and Hydrocarbons is currently promoting several capital-intensive projects – including the construction of modular oil refineries, a gold refinery, liquefied petroleum gas strategic tanks, a urea plant and the expansion of a compressed natural gas project – which are open for investment. Last December, the Ministry of Mines and Hydrocarbons announced a forecast of $1.1 billion in foreign direct investment in oil and gas activities in 2021.

Active in Equatorial Guinea since 2015, AOP released its first AES documentary on the country in 2016, followed by investment reports in 2018 and 2019.

The AES: Equatorial Guinea 2021 investment report will be launched at the U.S. Africa Energy Forum 2021 online seminar and in-person networking event in Washington, DC. (July 12). The documentary will be launched at the U.S. Africa Energy Forum conference in Houston (October 4-5) and broadcast globally on news networks.

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U.S. Africa Energy Forum 2021 Launches: Promotes U.S. Role as Primary Investor in African Energy

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The U.S. Africa Energy Forum 2021 – organized by Africa Oil & Power, in partnership with the African Energy Chamber’s U.S.-Africa Committee – will foster alignment between U.S. and African governments’ energy policies and highlight African oil, gas, power and renewable projects across the energy value chain for U.S. investors; the multi-day forum unites U.S. and African policymakers, energy executives and industry leaders to create new linkages and foster discussions that drive long-term policy formation and project execution; the in-person, two-day summit and gala dinner will be hosted in Houston, Texas (October 4-5, 2021) and an online seminar and in-person networking event will be held in Washington D.C. (July 12).

Africa Oil & Power (AOP) and the African Energy Chamber are excited to announce the launch of the first-ever U.S. Africa Energy Forum (USAEF). This event aims to create deeper cooperation between the U.S. and Africa on energy policy, to reach alignment on long term sustainability goals, to stimulate greater American investment in the African oil, gas and power sectors, and to engage and reposition the U.S. as the primary partner of choice for African energy developments.

Under the theme “New Horizons for U.S. Africa Energy Investment” the forum will explore diverse foreign investment and export opportunities across the continent, including natural gas as a vital fuel for the energy transition; energy storage and battery minerals; Africa’s place in global energy supply chains; the benefits of the African Continental Free Trade Area; evolving energy technologies and how they relate to the future role of petroleum resources; and on-and off-grid power developments.

An online seminar and in-person networking event will be held in Washington D.C. on July 12, 2021, building up to the in-person U.S. Africa Energy Forum summit and gala dinner, to be hosted in Houston, Texas, on October 4-5, 2021. Africa Oil & Power and the African Energy Chamber invite all U.S.-based companies with an interest in engaging with African industry leaders and project developers to participate in the USAEF Houston summit.

This initiative comes at an important juncture in U.S.-Africa relations. The Biden Administration’s announcements of its intentions to proactively build a stronger U.S.-Africa partnership coincides with the fact that African projects are seeing rising interest from U.S. companies and lending institutions alike. The USAEF event is thus dedicated to enabling dialogue between its participants that advances these developments.

“Our mission has always been to showcase the resource potential that Africa has to offer while at the same time showing its growing preference for sustainable energy policies and technologies. Toward that end, we hope it becomes evident that Africa does not just want investment capital: it wants smart capital and an accompanying partnership with the investors,” says James Chester, Senior Director of Africa Oil & Power. “The U.S. Africa Energy Forum represents the first-of-its-kind opportunity to catalyze U.S. participation in Africa’s energy transformation – via technology, policy support, capital injection and skills development – and turns a new page in the chapter on global energy investment.”

In partnership with the African Energy Chamber’s U.S.-Africa Committee, AOP will introduce American companies to African opportunities and advance an agenda of sustainable, long-term investment in African energy and other sectors by U.S. organizations.

“The rise in support from the U.S. to the continent is a credit to Africa itself, which is increasingly viewed as a favored destination for global investors, multilaterals and export credit agencies,” says Jude Kearney, President of Kearney Africa and former Deputy Assistant Secretary for Service Industries and Finance at the U.S. Department of Commerce during the Clinton Administration. “Africa continues to command a healthy share of global FDI in oil and gas industries. It has for decades shown that investment in those sectors is favorable compared to other jurisdictions and can be successful by many measures. Even as Africa and the rest of the world wrestles with a global pandemic, Africa’s energy sector shows vitality and resiliency – not only in hydrocarbons but in regard to new opportunities in mining, liquefied natural gas, and agriculture.”

Both African governments and private sector sponsors of African energy projects value highly the combination of investment and partnership that US investors famously convey. The USAEF seeks to enable successful partnerships between its participants such that the energy development goals of U.S. investors and strategic partners and their African counterparts can be achieved.

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Angola’s Petroleum Agency Outlines Timeline for Ongoing Bid-round

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Angola’s National Oil, Gas and Biofuel’s Agency (ANPG) has outlined its timetable for the evaluation of its ongoing 2020 bid round, as interest in the acreage on offer continues to grow.

In line with its statutory duties as national concessionaire in charge of the attribution of petroleum exploration blocks, the ANPG has sought to adjust its processes to remain competitive in the current market environment, which is dominated by concerns around COVID-19, long-term demand considerations and stiff competition from new and promising frontiers like Guyana and Suriname.

The ongoing bid-round is a manifestation of Angola’s strategy for the continuous attribution of petroleum concessions 2019-2025 which was approved and codified by Presidential Decree no. 52/19, of 18 February 2019. The aim of the strategy is to provide access to promising acreage to competent explorers in an effort to increase geological knowledge about Angola’s hydrocarbons potential and ultimately increase proven reserves.

A hybrid online and physical roadshow for the current bid-round is scheduled for April 6 in at the Talatona Convention Centre in Luanda. This event will provide the opportunity for investors to engage with the agency regarding the blocks on offer, the data packages and the accessibility studies, as well as touch upon environmental, logistical and local content issues.

This will kickstart a series of both digital and in-person roadshows and technical presentations to promote the blocks to be awarded in key international markets. The acreages on offer include:

  • Three blocks of the lower Congo onshore Basin CON1, CON5 and CON6
  • Six of the Kwanza onshore Basin (KON5, KON6, KON8, KON9, KON17 and KON20)

In line with the provisions of Presidential Decree No. 86/18, of 2 April 2019, which establishes the rules for the organization of bid rounds, the ongoing 2020 bid round will unfold as follows:

  • Tender Launch
  • Proposal submission
  • The opening of offers from potential suitors in a public setting
  • The evaluation and qualification of proposals
  • The submission of the evaluation report to the Ministry of Mineral Resources and Petroleum and Gas
  • Contract negotiation with the winners of the bid-round
  • Signature

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