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- Does crypto still belong in the future?
- Bitcoin & Co.: Why don't you do it like Elon Musk
- Cryptocurrencies: "Coffin nail for climate change."
- Bitcoin cybercrime
- Price drop in recent weeks
Reading time: ~4 minutes
The crypto market is primarily based on people’s speculation. But some criticizers of blockchain technology now announce that Bitcoin is gone. In the podcast “Technology on the Ear,” the investor Jascha Samadi from Greenfield One sees things differently and believes in the future of cryptocurrency.
Does crypto still belong in the future?
For months it seemed as if the price of bitcoin, ether, and other cryptocurrencies was constantly going up – but then prices collapsed again. In mid-April, the value was still over 50,000 euros. The value has leveled off at 30,000 euros in the last few weeks. The recent recovery phase of the Bitcoin course did not last long. First, the mark rose again to 40,000 dollars – but now it’s going downhill. Bitcoin price has settled at $30,000. The cryptocurrency fell to its lowest level since June 9. Ether also lost significant value. How did the price crash come about? To start investing in bitcoin trading visit https://bitcoin-profit.cloud/
For example, Tesla, Tesla CEO Elon Musk has decided not to bet on Bitcoin. After the announcement on Twitter on May 12, the Bitcoin price fell by 12 per cent. In addition, payments with this cryptocurrency would not exist at Tesla due to concerns about the cryptocurrency’s carbon footprint. After heavy criticism, Musk backtracked and said he would accept a clean mined bitcoin for Tesla.
Bitcoin & Co.: Why don’t you do it like Elon Musk
The cryptocurrency devours very high electricity costs. China has also announced that it will tighten controls over digital currencies. The Chinese government is taking strict action against Bitcoin and Co. because Beijing wants to develop and enforce its state-controlled digital currency, the digital yuan. What is more serious is that the cryptocurrency is now considered the “highest risk class” by European banking regulators – the reputation of the digital currency is suffering from the sharp increase in cybercrime. Criminals mainly use Bitcoins. For example, if hackers penetrate a corporation network, they often demand virtual currency like bitcoin.
These factors may have caused the price drop. Above all, the low environmental friendliness of Bitcoin is often accused. However, investor and crypto expert Jascha Samadi from Greenfield One does not believe in the demise of the well-known digital currency.
Background: With the mining of the first Bitcoin, the first data set, also called “block,” was created. For example, this block contained encrypted information about who had mined the bitcoin. The subsequent transaction was lined up in different blocks in a “chain.” Blockchain was born. The new type of database still works like a transaction book.
A look at history shows that the price has not collapsed for the first time. At the end of 2017, the Bitcoin price rose to an all-time high of more than 16,000 euros and then collapsed again. However, in the three years that followed, the cryptocurrency recovered.
Cryptocurrencies: “Coffin nail for climate change.”
Cryptocurrencies use as much electricity as the whole nation of The Netherlands, Chile, or Pakistan. Digital production is energy-intensive, so Forbes Magazine called the coin “coffin nail for climate change” back in 2018.
“Cambridge University examines the energy consumption of Bitcoin and Co. The analysis currently shows 115 terawatt-hours of energy use annually. An extrapolation of the “Digiconomist’s Bitcoin Energy Consumption Index” gives about 126 TWh per year (both as of June 2021). This corresponds to the electricity consumption of Pakistan. Germany has a power consumption of 517 TWh per year. To “mine” cryptocurrency, computers have to solve multifaceted mathematics problems. That eats up a lot of electricity.
Experts see the future in environmentally friendly alternatives. Whether Bitcoin has to become more environmentally friendly is also covered in the podcast “Technology on the Ear.”
Chia is a development by the programmer Bram Cohen. The cryptocurrency is said to be more energy-efficient than conventional currencies. Many high-performance computers are operated day and night to mine these digital currencies. We present chia here in more detail.
Cyber attacks are increasing and also affect German companies. When cybercriminals hack company networks, they usually demand a ransom. Most of these ransoms are in the form of cryptos. Bank supervisors see a risk in Bitcoin in particular, which is pulling the price down sharply. Ransomware attacks are now a multi-billion dollar business globally. On average, companies attacked pay the equivalent of $300,000 to recover their data.
A big scam happened in Turkey in April. A founder of a crypto platform has left and cheated investors out of millions. Faruk Fatih Özer is behind the Thodex platform. Now he is on the run with two billion dollars (1.7 billion euros).
Jascha Samadi from Greenfield One explains that there are black sheep in every industry, “even if what happened in Turkey is of course bad.” “However, the Thodex case is not representative. It would be as if we were inferring the entire Dax from the Wirecard case,” he says in the podcast.
Price drop in recent weeks
There are, of course, all kinds of rumors that explain the cause of the price drop. For example, China is once again mentioned as the cause. But markets react to all kinds of circumstances and are complicated to analyze.
It remains reasonable to realize that this internet currency operates worldwide 24/7 market. Traditional markets close daily and are completely closed on weekends. Traditional markets also have an emergency stop in extreme price drops; bitcoin does not know this. Bitcoin currently has a market value of around 10 billion euros. Liquidity is, therefore, relatively low. More users and liquidity ensures a more stable price development of bitcoin.
In that regard, bitcoin is developing very positively. The use of bitcoin continues to increase, and technical developments (e.g., Segregated Witness, Lightning Network, Fiber, MAST ) are growing strongly. At the beginning of December, a record number of transactions took place on the Bitcoin network. Also, the number of commits on Github and Core developers contributing to Bitcoin’s technical development has never been more significant. In short, every reason to be positive!
Thank you for reading!