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The nations second-largest mortgage lender aims to give borrowers the option to pay their mortgages in Bitcoin by the end of the year. United Wholesale Mortgage said itll be the first mortgage company in the U.S. to accept cryptocurrency in exchange for monthly payments.

UWM is planning to accept Bitcoin because we have nearly 1 million consumers who pay us a monthly mortgage payment, and were always trying to find a way to make things easier for our clients, said Mat Ishbia, the companys chairman and CEO.

The move raises familiar questions about cryptocurrency, and whether this virtual money can function as a means of exchange in addition to its well-known role as a vehicle for speculation. Financial experts dont expect a rush of people paying their mortgage this way.

It is nice to know that individuals can pay off their mortgage with cryptocurrency, but because of operational issues for the individual investor, I think very few will, said Clark Kendall, a financial advisor who runs Kendall Capital Management in Rockville, Maryland.

United Wholesale Mortgage is the nations No. 2 mortgage lender. It originated more than 560,000 loans in 2020, a tally that trailed only Rocket Mortgage, according to a Bankrate analysis of federal Home Mortgage Disclosure Act data.

Ishbia said United Wholesale Mortgage will open by accepting Bitcoin, the most prominent cryptocurrency. Its total market value is approaching $1 trillion.

Ishbia said his company is looking into accepting other virtual coins as well. He didnt name names, but Ethereum, Cardano, XRP and Litecoin are among the most widely held cryptocurrencies.

United Wholesale Mortgage has released no details about how the payments might work. Will consumers pay from accounts with Coinbase or other cryptocurrency brokerages? Its unclear. The company is still ironing out those issues with federal authorities. The great part of working in such a carefully regulated industry is that we are able to work directly with regulators to ensure were doing right by everyone before a change like accepting cryptocurrency comes to pass, Ishbia said.

Bitcoin has been a subject of intense interest in the past year, and its price has moved accordingly. In September 2020, a single bitcoin traded for a bit more than $10,000. By April , the price was flirting with $65,000.

Within months of reaching that high point, Bitcoin plunged below $30,000. Its on the rise again, nearing $50,000. That roller-coaster ride is the opposite of the stability that is the hallmark of such major currencies as the dollar and the euro.

Bitcoins volatility raises a number of challenges. For one, theres a mismatch between a debt payment denominated in a stable currency and a means of exchange whose price fluctuates wildly.

If your monthly mortgage payment is $1,000, do you send in $800 or $1,200 worth of Bitcoin for this months payment? Kendall said.

Greg McBride, Bankrates chief financial analyst, is similarly wary. I wouldnt recommend basing the certainty of next months mortgage payment on the price of a stock youre holding now, and I certainly wouldnt recommend doing so based on a speculative asset, he said.

Bitcoins value can move so sharply that borrowers might even fret about a jump in value in the moments between the time the payment is made and the account is credited.

For true believers in Bitcoin, the concept of using cryptocurrency to pay the bills is counterintuitive. If you think the value of Bitcoin will rocket past $100,000, why would you use it to pay the mortgage when boring old dollars will accomplish the same task?

Taxes are another stumbling block. While tax policies around cryptocurrency are a work in progress, the IRS considers using cryptocurrency to buy something or to pay an expense a potentially taxable event.

So the seemingly simple act of trading bitcoins for a mortgage payment could trigger the capital gains tax, the American Institute of Certified Public Accountants said.

I could only see recommending using cryptocurrencies to pay off debt if the investor was looking to unload their cryptocurrency and pay off their mortgage in full, Kendall said.

Using cryptocurrencies to make monthly mortgage payments does not make operational sense in my book.

Read more from the original source:
Youll soon be able to pay the mortgage in Bitcoin but should you? - The Spokesman-Review

Bitcoin has a well known problem, even if many bitcoin fans would like to ignore it or pretend it isnt real. The problem is that bitcoin mining uses an enormous amount of electricity. Its not a large amount, and actually maybe its not even an enormous amount its an absurd amount.

Naturally, people who like the concept are eager to brush it off by saying that bitcoin miners can just use renewable energy solar and wind are cheapest now anyway for new power production, right? However, that misses a few points. Theres only so much solar PV and wind turbine production capacity, and increasing production capacity takes years, and needs clear signals. Production needs to increase rapidly and it has been increasing rapidly, but that increased production is needed to avoid or turn off fossil fuel power plants. Every single serious plan for reducing emissions an adequate amount by 2030 involves cutting energy use cutting it a lot. We need to retire coal and fossil methane* power plants yesterday (*aka natural gas, but were starting to drop the use of this term here on CleanTechnica since its a greenwashing term). We need new solar and wind power plants to come online to do that. Even if bitcoin miners started gobbling up solar panels and wind turbines to power their mining, that would mean those cleantech power plants would be less available for other markets and those other markets would be powered by fossil fuels longer.

Sure, in 2050, go for it if you want! Go crypto crazy. But we need to shut down hundreds of fossil power plants in the 2020s, and we cant be delaying that just because some people dont want to trust the federal governments and organizations that manage monetary policy today.

But lets get back to the story. Its a fascinating one.

With their massive, massive energy needs**, bitcoin miners have been known to use enormous amounts of coal power, particularly in China (**and no, this is nothing like the energy needs of ATMs which I dont think Ive used in ~10 years or online banking; it is far more energy use on a per-transaction basis). As the bitcoin market grows, it needs to find more and more power around the world, and that means more and more dirty power. That brings us to the news. Recently, 200 bitcoin miners and oil & gas execs reportedly met in a private setting in Houston, Texas. CleanTechnica wasnt invited, so we cant say for sure if this was about getting more power supply for mining, if it was about investment opportunities of some sort, if it was about money-hiding tactics to avoid paying taxes, or if it was just a benevolent meeting to chat sports, weather, and pumpkin spice lattes. However, reporting from CNBC indicates it was primarily about the first thing getting dirty electricity to power more bitcoin mining.

On a residential back street of Houston, in a 150,000 square-foot warehouse safeguarding high-end vintage cars, 200 oil and gas execs and bitcoin miners mingled, drank beer, and talked shop on a recent Wednesday night in August, CNBC reported last week. One big topic of discussion: Using stranded natural gas to power bitcoin mining rigs, which both reduces greenhouse gas emissions and makes money for the gas providers, as well as the miners.

Lets pick apart that last sentence, because its the critical one and the second half of it makes no sense. Stranded assets in this context are not power plants that are no longer competitive (though, some of them have been revived or kept alive to power bitcoin mining). Bitcoin mining is bringing economic viability back to a dying fossil-power-plant market in another way. What is being tapped, according to the article, is otherwise unused fossil methane at oil sites. Notably, using that stranded methane is making oil drilling more economical, and making it easier to keep selling deceptively cheap oil. There is nothing good about this. And thats not the end of the environmental disaster. The way this stranded methane is being burned is also extremely inefficient and harmful for our climate.

Bitcoin isnt a joke. Its a massive, insane climate disaster.

Here are a few more choice quotes from the CNBC story:

Just take Hayden Griffin Haby III, an oilman turned bitcoiner. The Texas native and father of three has spent 14 years in oil and gas, and he epitomizes what this monthly meetup is all about.

Haby started as a surface landman where he brokered land contracts, and later, ran his own oil company. But for the last nine months, hes exclusively been in the business of mining bitcoin. [H]e co-founded Limpia Creek Technologies, which powers bitcoin mining rigs with flared, vented, and stranded natural gas assets.

Bitcoin miners care most about finding cheap sources of electricity, so Texas with its crypto-friendly politicians, deregulated power grid, and crucially, abundance of inexpensive power sources is a virtually perfect fit. The union becomes even more harmonious when miners connect their rigs to otherwise stranded energy, like natural gas going to waste on oil fields across Texas.

I just knew Houston would be prime to explode because of the energy connection to mining ifwe organized a good meetup, [Parker] Lewis told CNBC. Its also key to Texas being the bitcoin capital of the world.

Capturing excess and otherwise wasted natural gas from drilling sites and then using that energy to mine bitcoin is still firmly in the category of avant-garde tech.

The article noted that this meeting and the bitcoin miner rush to Texas were triggered in large part by China kicking bitcoin miners out. As noted previously, bitcoin miners have been using an enormous amount of coal power, mostly in China. The plan for many of them now seems clear: forget about Chinese coal, just switch to cheap fossil fuel power in Texas.

Anyone who thinks bitcoin isnt an environmental and climate catastrophe isnt paying attention or is putting on some seriously handicapping blinders. Switching to such an enormously energy intensive investment tool (because, come on, no one is spending bitcoin like its cash money) is not just a mistake. Its essentially a crime against humanity. Human society is digging the graves of millions or billions of people because of catchphrases and fanciful idealistic thinking. No cryptocurrency is going to wipe out wealth inequality or solve the worlds problems. All Im seeing so far is that its creating bigger problems. (Side note: the cult-like obsession with crypto is also a bit annoying on social media and various forums around the interwebs, and there is no doubt a ridiculous amount of bot activity and propaganda pumping.)

Oh, and I havent even gotten to what seems to be the worst part yet. The way that much of this fossil methane is being burned is about as inefficient as it gets. The miners are using generators. Heres more:

Chemistry is amazing, explained Adam Ortolf, who heads up business development in the U.S. for Upstream Data, a company that manufactures and supplies portable mining solutions for oil and gas facilities.

When CH4, or methane, combusts, the only exhaust is CO2 and H2O vapor. Thats literally the same thing that comes out of my mouth when I exhale, continued Ortolf.

But Ortolf points out, flares are only 75 to 90% efficient. Even with a flare, some of the methane is being vented without being combusted, he said.

This is when on-site bitcoin mining can prove to be especially impactful.

When the methane is run into an engine or generator, 100% of the methane is combusted and none of it leaks or vents into the air, according to Ortolf.

But nobody will run it through a generator unless they can make money, because generators cost money to acquire and maintain, he said. So unless its economically sustainable, producers wont internally combust the gas.

This is the best gift the oil and gas industry couldve gotten, said Ortolf. They were leaving a lot of hydrocarbons on the table, but now, theyre no longer limited by geography to sell energy.

Somehow, the CNBC article tries to spin this as a good thing environmentally. I guess the reporter doesnt know anything about the matter and just bought the bitcoin miners/oil & gas guys illogical talking points. Perhaps they even now think that the wonderful CO2 emissions we are flooding our atmosphere with will just lead to more trees and bushes.

Featured photo courtesy ofPixabay/Pexels (CC0)

Originally posted here:
Why Did 200 Bitcoin Miners and Oil & Gas Execs Just Have a Secret Meeting in Houston? - CleanTechnica

A Wall Street Journal report has claimed how bitcoin adoption in Afghanistan has catapulted since Kabul fell for the Taliban as citizens seek ways to put their hands on hard money in the midst of a political crisis and monetary sanctions from the U.S. and the International Monetary Fund (IMF). The report also commented on how such a move could pose security concerns if the Taliban itself were able to circumvent U.S. restrictions with bitcoin, an unfounded FUD aimed at Bitcoin itself and the risk it presents for the control of global power.

The Taliban, however, has access to only a small percentage of Afghan reserves, and bitcoin can do more to the Afghan people than to those in control of the interim government. What WSJ misses is the broad empowerment Bitcoin can bring to anyone facing arbitrary totalitarianism, restrictions, and sanctions, as well as the lack of standardized treatment U.S. foreign policy employs on countries and economies that do not respect human rights.

Since the Taliban took control of Kabul, the capital of Afghanistan, sanctions from governments worldwide have prevented regular people from getting a hold of their savings. Hundreds of Afghans hit a brick wall when rushing to banks to withdraw money as Taliban fighters took over their capital. Intense restrictions and escarce liquidity from abroad have made life harder for Kabul residents, many of whom were unable to flee the city with any of their savings.

The U.S. government has pressured the IMF to stop releasing $460 million of special drawing rights to Afghanistan, which can be exchanged for cash, and confiscated more than 99% of the countrys foreign reserves that sit in New York. Additionally, Germany has suspended $300 million in aid and the World Bank has frozen its aid mechanism. The international sanctions are posing a real risk for the Afghan economy, along with businesses like Western Union and MoneyGram cutting off services in the country. As Western companies and governments have cut off Afghans from the traditional financial system, Bitcoin has been the most sought-after solution.

"A nation-wide cash shortage, closed borders, a local currency touching record lows, and rapidly rising prices of basic goods; that's why some Afghans I spoke to are turning to cryptocurrencies like bitcoin," reported MacKenzie Sigalos.

The Wall Street Journal acknowledges all that, but fails to understand how important it is for Afghans to be able to resort to neutral, incorruptible currency. Millions of residents of the Central Asian country have the potential to benefit greatly from bitcoin adoption, compared to a handful of Taliban fighters with limited resources.

Perhaps the remarks that Bitcoin could pose a security threat to Western power mostly represent the need to run a mainstream agenda that BTC adoption worldwide, similar to what is happening in El Salvador, would be bad for the rest of the world by discrediting Bitcoin and its power. Worldwide adoption represents a loss of control from the worlds biggest elites and economies.

The Central American country, for instance, is being able to take steps in the direction of regaining monetary sovereignty and independence from the IMF and the U.S. by running with a Bitcoin standard. Although an experiment, it is certainly a promising and well-founded one. However, it is inconvenient to those in control of the financial system and money services, like Western Union and MoneyGram, that might lose millions of dollars a year in remittance fees from bitcoin adoption in El Salvador alone.

Human rights and judicial fairness is hardly ever in the best interest of big economies like the U.S., as evidenced by the lenient treatment that the government has employed towards U.S. bonds-financing yet totalitarian countries like Saudi Arabia. Since a relationship with the Saudi kingdom favors U.S. monetary policy, the American government does not embark upon an active role to bash moves that offend human rights there. The same holds true to China, a country that plays a vital role in the American supply chain but employs religion-intolerant concentration camps in its territory.

Bitcoins potential scares those that control the worlds monetary policies and international coordination schemes, because it has the power to bring sovereignty to the individual, whether they agree or disagree with mainstream lines of thought. El Salvador is already showing the world how people and economies can be empowered, and the worlds elites fear that could reach their doorstep. But Bitcoin doesnt care, and is already helping millions regain their freedom.

Read the original:
Bitcoin Prevents Monetary Control, Whether Those In Control Like It Or Not - Bitcoin Magazine