Is cryptocurrency going to be the next currency?
If you’ve spent any time on social media lately, you’ll hear countless people passionately backing crypto. (Beware of the spam bots encouraging you to buy their crypto though!)
But what even is cryptocurrency? This week I want to dive deeper into cryptocurrency, the benefits and dangers of adopting it, and whether I’m a fan of crypto myself.
Mind you, this article is meant to give a birds eye view of everything but if you’re serious about learning more I encourage you to do your own research!
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What is crypto?
Cryptocurrency became famous when Bitcoin was created in 2009. Now, there are more than 10,000 cryptocurrencies in the world!
Crypto is decentralized which means that no bank or government controls it. Instead, anyone and everyone can have equal access to it. Crypto gets transferred directly person to person which makes it a really unique form of payment. Furthermore, crypto is a neutral currency for citizens of totalitarian governments and countries where inflation takes a huge toll on the value of their money.
What is “mining”?
Cryptocurrency is created via a network of computers which create secure blockchains. “A cryptocurrency blockchain is similar to a bank’s balance sheet or ledger. Each currency has its own blockchain, which is an ongoing, constantly re-verified record of every single transaction ever made using that currency.”
“Mining” cryptocurrency is honestly like a game where computers aim to solve complicated math problems as fast as possible. Every ten minutes, the person who solves the problems the fastest, wins some of the crypto and the rights to verify every transaction made in the last ten minutes. (Resource). This verifying process helps make the cryptocurrency secure.
Cryptocurrency and the environment
What’s not talked about enough is the energy consumption required to “mine” cryptocurrency.
Since there is essentially a competition amongst numerous people to mine each coin, the energy consumption is massive. Those who lose the competition are wasting energy by completing useless mathematical problems.
It’s now estimated that the current energy consumption surpasses that of New Zealand! This energy usage is also equivalent to 1 million transatlantic flights.
Despite the benefits of a decentralized and secure currency, the energy issues are enough to turn me away from crypto.
My personal opinion on cryptocurrency
14.1 million American adults are currently unbanked, so there is a huge benefit of having a decentralized currency that’s available to anyone in the world.
That being said, since we’re still in the early stages of cryptocurrency it remains quite volatile so I personally am not planning to invest all of my money into it. Many are looking at crypto as a get rich quick scheme and not a stable currency.
Call me a grandma but between the massive energy concerns and the current volatility of the value of cryptocurrency, I still find investing in it to be a gamble. Once a more environmentally safe method of mining crypto gets developed and people start treating it like a currency rather than an investment, I think things could look a little different. If I do end up purchasing any cryptocurrency, it would be with money that I am okay with losing.
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