Researchers from Lawrence Livermore National Laboratory have devised a physics-based cryptocurrency that links electrical energy and blockchain technologies in a new way.

This new blockchain concept, dubbed ‘E-Stablecoin’, could allow electricity to be transmitted between users who are spread around the world, without the need for interconnecting wires or a grid-based transmission system. 

The work solves critical digital asset stability problems and is the first cryptocurrency token design that is both collateralised by a physical asset and fully decentralised because it is secured by the laws of statistical mechanics.

The research appears in the journal Cryptoeconomic Systems.

Digital assets and cryptocurrencies – such as Bitcoin – have seen explosive growth since their inception in 2009, prompting President Biden to sign an executive order on ensuring responsible development of digital assets. The executive order notes that digital assets have profound implications in areas including “data privacy and security; financial stability and systemic risk; crime; national security; the ability to exercise human rights; financial inclusion and equity; and energy demand and climate change”. 

Accordingly, the executive order calls for coordinated interagency efforts on the responsible development of digital assets, including technological advancements and payment innovations.

Researchers say the new LLNL cryptocurrency concept is a step toward implementing responsible digital assets that move beyond just the digital world and are instead tied to the physical world in more tangible ways. E-Stablecoin takes advantage of modern advancements in thermodynamics to transmit energy as a form of information.

Maxwell Murialdo and Jon Belof have detailed how a connection between energy and information allows for the creation of a cryptocurrency token that is directly backed by and convertible into one kilowatt-hour of electricity. While it requires the input of one kilowatt-hour of electricity to mint an E-Stablecoin token, that digital token can later be destroyed to extract back out one kilowatt-hour of usable electricity. 

Thus, the price of one E-Stablecoin token is pegged to the price of one kilowatt-hour of electricity in a manner that is robust, stable and trustless – a system that does not depend on an institution or third party for a network or payment system to function. 

As Murialdo explained: “Any anonymous party can mint an E-Stablecoin token with the input of roughly one kilowatt-hour of electricity. They can then transact with the digital token like any other cryptocurrency, or even turn it back into usable electricity — all without the need for electrical power companies, electrical transmission lines, permissions or authorities. It is a trustless system from top to bottom.”

A key problem that plagues many cryptocurrencies is the tendency for wild fluctuations to arise in the cryptocurrency’s exchange price. These extreme price fluctuations magnify risks and discourage consumer transactions, long-term smart contracts and other applications built on the blockchain.

One solution is to create ‘stablecoins’, which are cryptocurrency tokens that are specifically designed to hold stable value relative to external assets. Stablecoins can peg their token value to the value of an external asset like one US dollar or one gram of gold by making the token directly exchangeable for the asset. 

However, to date, pegging the value of a cryptocurrency token to the value of a physical asset has required trust in a centralised authority, which can maintain and disburse the physical asset. 

Requiring trust in a centralised authority introduces a potential failure point that is antithetical to the decentralised ethos of cryptocurrencies. 

E-Stablecoin says it is the first stablecoin concept to eliminate this failure point, a feat made possible by using the interplay of thermodynamics and information theory. In the future, E-Stablecoin may help to distribute electricity to remote locations that are not connected by an electrical grid system, or combat climate change by enabling intermittent, renewable energy to be transmitted to the places where it is needed most for efficiency.

“Through thermodynamic reversibility — to the extent that it is allowed by a modern understanding of statistical mechanics — we envision a future blockchain that is not only rooted in real-life assets like energy usage, but also is a more responsible steward of our natural resources in support of the economy,” said co-author Belof.

The E-Stablecoin concept was developed via the LLNL Laboratory Directed Research and Development programme.

Crypto market plunges below $1tr amid Celsius concern

The cryptocurrency market has plunged below $1 trillion for the first time since January 2021.

The prolonged fall comes as crypto lending service Celsius’s pause on withdrawals and transfers from its platform, citing ‘extreme market conditions’, continues.

The UK-based firm, which allows people to earn interest when depositing their cryptocurrencies with it and also lends out cryptocurrencies, said it plans to ‘honour withdrawal obligations’ in spite of speculation about its solvency.

Bank of England Governor Andrew Bailey, testifying in the UK Parliament yesterday, cited the situation in opining: “Crypto assets have no intrinsic value. This morning we have seen another blow-up in a crypto exchange.”

Cryptocurrency shorts

The general counsel of Ripple, the company behind the XRP cryptocurrency, says the United States Securities and Exchange Commission is attempting to “bully, bulldoze, and bankrupt” crypto innovation. Stu Alderoty said the ongoing lawsuit between Ripple and the regulator is part of the “SEC’s assault on all crypto in the US”, adding: “Like a hammer wanting everything to be a nail, the SEC is keeping everything murky so it can argue every crypto is a security.”

Virgin Group founder Richard Branson is the latest high-profile figure to target fraudsters using his name in crypto scams. He says he has spoken with Meta COO Sheryl Sandberg about false promotions on Facebook and has directed his lawyers to contact other social media platforms which have hosted malicious ads.

Mayfair’s first physical NFT Gallery has opened on Dover Street with a ‘Surface Tension’ exhibition featuring work by female artists. The launch event attracted attendees including Maxim of The Prodigy, Coinbase’s head of Europe and Google’s head of arts, as well as luminaries from the arts scene. The NFT Gallery was founded by Lynn Rosenberger and Lilien Hornung-Mary as a new physical space for art collectors and creators alike to purchase, produce and learn about NFTs and digital art.

Specialist food and drink marketing consultancy SALT has launched an office and event space inside a virtual British pub in ‘global food metaverse’ OneRare. The SALT Arms will host one-to-one consultations with clients either in the main pub or in individual booths for more private conversations, with options for gamified components using NFTs that combine virtual and real-world elements. The second floor will be SALT’s event space which can be customised for clients who plan to host virtual events without having to commit to a full campaign or permanent footprint on the metaverse.

Crypto prices

The overall market cap of the more than 19,800 coins is at $964.87 billion at the time of writing (7am UK), a 6% decrease in the last 24 hours.

Market leader Bitcoin – the original cryptocurrency created by the mysterious Satoshi Nakamoto – fell 10% in the last 24 hours to $22,775. BTC is 23% down in a week.

Ethereum, the second most valuable crypto coin – created as a decentralised network for smart contracts on the blockchain – dropped 8% to $1,225. ETH is 30% down over the course of a week.

Binance Coin is a cryptocurrency created by popular crypto exchange Binance to assist its aim in becoming the infrastructure services provider for the entire blockchain ecosystem. Its BNB token lost 4% to $228, leaving it 19% down over seven days.

Cardano is an open source network facilitating dApps which considers itself to be an updated version of Ethereum. Its ADA token, designed to allow owners to participate in the operation of the network, gained 7% to 49 cents yet is 16% down over the course of a week.

The XRP token of Ripple, a payment settlement asset exchange and remittance system, acts as a bridge for transfers between other currencies. XRP shed 1% towards 32c and its price is 18% down on seven days ago.

Solana is a blockchain built to make decentralised finance accessible on a larger scale – and capable of processing 50,000 transactions per second. Its SOL token grew 9% to $30.52 but is 22% down compared with a week ago.

Meme coin DOGE was created as a satire on the hype surrounding cryptocurrencies but is now a major player in the space. DOGE dropped more than 1% to below 5.8c, leaving it 27% down in a week.

Polkadot was founded by the Swiss-based Web3 Foundation as an open-source project to develop a decentralised web. Its DOT token, which aims to securely connect blockchains, added 7% to $7.37 yet is 19% lower than its price a week ago.

Avalanche is a lightning-quick verifiable platform for institutions, enterprises and governments. Its AVAX token gained 5% to $16.85 but is 29% down in a week.

To see how the valuations of the main coins have changed in recent times – and for round-ups of recent cryptocurrency news developments – click here.

For valuations of the top 100 coins by market cap in US dollars, plus 24-hour price change, see below.