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Alarm Bells For Crypto

This year has been extremely unpredictable for bitcoin and other cryptocurrencies as a result of a U.S. crackdown on cryptocurrencies and a subsequent Federal Reserve policy nightmare for bitcoin prices.

Despite the fact that Microsoft and Elon Musk may soon blow up the cryptocurrency market, the price of bitcoin is stuck below $30,000 per coin, in part because of concerns that the United States is launching a covert war against cryptocurrencies.

Now, a leak suggests that American president Joe Biden may soon sign an executive order on artificial intelligence that might have a significant impact on bitcoin and other cryptocurrencies, raising “alarm bells.”

Alexander Grieve, head of government affairs at bitcoin and cryptocurrency investment firm Paradigm, posted a link to a Semafor article that cites unnamed sources on X (Twitter), warning that the impending White House executive order on AI raises some red flags for the cryptocurrency market.

According to the article, businesses like Microsoft, Google, and Amazon would have to disclose when a consumer buys computing resources beyond a specific threshold.

According to the article, businesses like Microsoft, Google, and Amazon would be required to provide information when a customer purchases computing resources beyond a certain threshold.

Grieve alludes to a passage in the report where it is stated that computing power is a “national resource” and that running ChatGPT, creating video games, and mining bitcoin all require large amounts of compute.

According to estimates, the bitcoin network, which relies on “miners” to confirm transactions in exchange for newly produced bitcoin using powerful computers, consumes more electricity yearly than certain small nations. The United States now has more bitcoin miners than any other nation as a result of China’s 2021 ban on the practice.

According to Grieve, the White House currently views tech jobs, development talent, and energy as scarce national resources that are zero sum, particularly [with respect to] cryptocurrencies. Grieve speculated that working in cryptocurrencies would divert development talent “away from ‘real’ applications” and that bitcoin mining might be seen as robbing families of power.

If we start looking at compute capacity in the same way, and reporting on who is using how much of it, expect similar political and media pressure to be directed at cloud service providers that serve large crypto industry players, Grieve said, referring to it as Operation Choke Point for computing power.

The withdrawal of traditional financial services from the cryptocurrency market this year has been dubbed “Operation Choke Point 2.0” by those in the sector who suspect that the U.S. government and regulators are behind it.

A U.S. Department of Justice project called Operation Choke Point was first implemented in 2013 with the goal of discouraging banks from doing business with businesses like payday lenders, gun dealers, and others that were thought to pose a high risk of fraud and money laundering.

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