When Bitcoin started getting mainstream attention, many hailed it as the future of money. A new store of value and means of exchange, this experimental currency required no third parties to approve and settle transactions. People, not banks, would be in charge – this was the democratisation of money and value transfer. The decentralisation brought by blockchain technology would change the world, taking power from the big banks and financial institutions and restoring it to ordinary people. It would allow transfer of wealth to those living under repressive and corrupt regimes, and parts of the world afflicted by poverty.
Indeed cryptocurrency, with Bitcoin still the largest by market cap, is still here. Prices are down since the enormous bull run which took place over the end of 2017 and the beginning of 2018, when the price of 1 BTC hit over 19,000 USD, bringing the value of nearly all other cryptos up with it. However usage is still spreading, with cryptocurrency finding new applications and use cases every day.
A significant problem with Bitcoin has come to the fore in recent months – its vast energy consumption. Bitcoin is mined (generated) and processed by computers running mathematical algorithms, and the processing power required for these computations uses a large amount of electricity. At the time of writing it’s estimated that the electricity used to sustain Bitcoin is equivalent to the energy demand of a country roughly the size of Austria or Ireland. Needless to say, such vast energy consumption isn’t a particularly good thing for our good green earth.
I’m a big believer in crypto and I don’t think it’s going away. New technology always has teething problems, and it’s naive to think that something like Bitcoin would be perfect straight out of the box. Like anything else it’s going through various iterations and adjustments.
Despite my belief that technological advance brings new hazards to our health, there’s doubt that it also benefits humanity enormously when used with the right intentions. My prediction is that the bitcoin energy consumption issue will eventually be resolved. Also, Bitcoin is far from the only player in the crypto market. XRP, the cryptocurrency token created by Ripple, shows genuine promise as a solution for cross-border payments – international transfers from one currency to another. At the time of writing, XRP has the second largest market cap after Bitcoin. Like Bitcoin it allows speedy transactions – in fact, quite a bit speedier – but it doesn’t use the energy-sapping proof-of-work system that Bitcoin does. Instead it uses a system called consensus, using growing networks of trusted validator nodes to approve and validate transactions.