Category Archives: Cryptocurrency

Over a decade since Bitcoin was first launched, there are now myriad cryptocurrencies on the market, such as NEO, Litecoin and Ethereum, but Bitcoin still remains the most well-known. Cryptocurrency is a form of digital currency, which requires no central banking system. It sits on a platform called blockchain, and Bitcoins are mined in exchange for Bitcoin rewards. Anyone can mine Bitcoin, and because the transactions have to be verified by several individuals, there is no need for a central bank to control it, it is decentralised. But you dont have to mine Bitcoin in order to own it, many people are now simply investing in cryptocurrencies through trading platforms.

But is cryptocurrency a good investment? And if so, will 2020 be a good year to invest? Its certainly been an interesting year so far, and a rocky ride in terms of many investments, with prices fluctuating, largely due to the Covid-19 pandemic. The value of Bitcoin has risen as high as $9,000 and seen a low of $4,000, before gaining ground to $6,600, marking the greatest fluctuations since 2017.

The most recent rise in Bitcoins value, as well as other cryptocurrencies, may have been triggered by US Federal Reserve quantitative easing, an attempt to reduce the damage Coronavirus could cause to the economy. This has led some to move investments into Bitcoin, and other cryptocurrencies, to hedge against the potential devaluing of currency caused by quantitative easing. As there is a finite number of Bitcoin on the market, some believe it should not be susceptible to such devaluing, as the amount of new Bitcoin being mined is always reducing. The increase in demand, and the reduction in supply, should drive up the value, in keeping with the principles of supply and demand, according to experts such as Simon Peters, a crypto analyst at eToro.

Cryptocurrencies first became popular after the economic crisis of 2008, when the value of other traditional shares and investments took a major hit. Similarly, since news of the Coronavirus outbreak first hit, transaction volumes on trading platforms seemed to have increased.

Cryptocurrency trading platforms Binance and MyEtherWallet have also seen increased investment and significant growth. It certainly appears that quantitative easing has been the catalyst for investors to seek alternative options.

But theres another reason to consider cryptocurrency investment in 2020 the Bitcoin halving this May, meaning the number of Bitcoin available will halve. This means less supply, and with the pandemic pushing up demand, some are anticipating a bull run.

If past performance is any indication, a halving is likely to push Bitcoin values up. The first halving in 2012 saw a whopping 8,000% increase in the value of Bitcoin over the following year, and the second one in 2016 saw Bitcoins value rise by 2,000% in the subsequent 18 months.

With no clear end in sight for the current lockdown situation, many businesses are losing value, if they survive at all, so traditional stocks and shares are taking a battering. Could cryptocurrencies be considered a safe haven in 2020? It is a fluctuating market, but steely investors may be prepared to take a punt.

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Is 2020 the year to invest in cryptocurrency? - About Manchester

The latest implementation of bitcoin (BTC) on the Ethereum blockchain quietly went live this week.

There are 1.24 renBTC live on the Ethereum mainnet now, according to Etherscan. Three sources with knowledge of the project have confirmed this is the Ren smart contract, live ahead of its launch announcement.

Kain Warwick of Synthetix tweeted Wednesday that he was the first person to hold a full bitcoin in renBTC.

However, theres no way yet for members of the public to mint additional renBTC, the CEO of the company behind the project told CoinDesk in an email.

While the smart contracts have been deployed on Ethereum, RenVM itself is not actually on mainnet. This is because RenVM is a distinct network separate to Ethereum. The final mainnet subzero version of RenVM wont be deployed until later, Taiyang Zhang wrote. The minted renBTC so far has been from our own internal testing [and] Kain from Synthetix testing the system. The public hasnt been able to mint renBTC thus far.

RenBTC becomes the latest in a rash of products built to expose bitcoin-backed assets to the benefits of Ethereums various decentralized finance (DeFi) platforms.

Heres a succinct description of the system from a Medium post by the companys CTO, Loong Wang:

"Any asset minted on Ethereum by RenVM is a 1:1 backed ERC-20. This means that if you have 1 renBTC (an ERC-20), you can always redeem it for 1 BTC. It's a direct supply peg. renBTC isn't a synthetic, it doesn't rely on a liquidation mechanism, and it's not the price of Bitcoin on Ethereum. It is a one to one representation of Bitcoin on Ethereum that can be redeemed for BTC at any time, in any amount."

Ren is a project that grew out of the $30 million initial coin offering (ICO) for the Republic Protocol, originally envisioned as a way to run dark pools privacy-preserving trading venues where the order book is kept secret. According to Crunchbase, its backers included Polychain Capital and FBG Capital.

But, in a recent issue of The Defiant newsletter, Wang explained his firms pivot away from dark pools.

The big trades were on chains that werent Ethereum, he said. ETH had a lot of liquidity, but it was predominantly Bitcoin and USDT. So we would had to leverage things like atomic swaps, and theyre just too painful, Wang told The Defiants Cami Russo. And so we kind of turned around to say, well, we need to solve this interoperability problem before large liquidity is actually truly accessible in this space.

The RenVM is a way to hold a cryptocurrency in a multi-signature wallet controlled by nodes in the RenVM and mint a representation of that asset as an ERC-20 token for use on Ethereum. Unlike other projects, RenVM is bringing more than bitcoin to Ethereum (see bitcoin cash (BCH) and zcach (ZEC) above), with other assets to follow.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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RenBTC Quietly Goes Live in Latest Bid to Bring Bitcoin Into Ethereum - CoinDesk - CoinDesk

As world governments push through legislation to levy taxes on capital gains from bitcoin (BTC) transactions, seeking to earn more from an asset class that frowns on regulatory oversight, there are still a few countries that remain pro-crypto, allowing investors to buy, sell or hold digital assets at zero taxes.

Circumstances vary, but the real motivation leans more toward facilitating increased investment within the respective jurisdictions cryptocurrency industries, perhaps as a base for future taxation. For now, that has not happened yet. Heres a list of eight countries in no order of importance which may be considered as bitcoin tax havens, states that dont want your BTC investment gains.

In Portugal, tax authorities waived all tax on cryptocurrency trading and transacting meaning that individuals do not have to pay capital gains tax or value added tax (VAT), when buying or selling BTC and other digital assets. The Portugal Tax Authority (PTA) said an exchange of cryptocurrency for real currency constitutes an on-demand, VAT-free exercise of services.

While citizens are under no obligation to pay income tax when exchanging crypto for fiat, the PTA, however, indicated that businesses which accept digital currencies as payment for goods and services are liable to paying taxes such as VAT and income tax. The income tax relief makes Portugals laws some of the most favourable throughout the world, given how income tax is a huge expense on the accounts of most crypto traders.

If you hold bitcoin for one year or more in Germany, you wont have to pay any taxes. Regardless of how much money you make selling your BTC, you do not pay capital gains as long as you have held your coins for a period exceeding 12 months.

Europes biggest economy regards BTC as private money, contrary to the widespread view in most developed countries, which look at crypto as currency, commodity or equity. In Germany, private sales that do not exceed 600 euros ($654) are tax-free. Businesses, however, are still obliged to pay taxes on gains emanating from bitcoin through corporate income taxes.

Both individuals and corporates who hold BTC or other digital assets as a long-term investment are not taxed in Singapore simply because capital gains tax does not exist in the city-state itself.

However, enterprises based in Singapore are liable to income tax, should they be involved in cryptocurrency trading as a core business. Those that opt for bitcoin as payment for services rendered, or revenue, are subject to normal income tax rules. Companies are taxed on the profit generated within Singapore.

As with neighboring Singapore, there are no capital gains tax in Malaysia. Cryptocurrency trades involving cash or another digital asset are not taxed in the Southeast Asian country. However, this will likely change if BTC is recognized as legal tender in Malaysia, as has been rumoured in the local press in recent months.

In the Eastern European country of Belarus, a new law that came into effect in March 2018 legalized cryptocurrency, exempting individuals and businesses from any form of taxation for dealing in or with digital financial assets in whatever way, at least until 2023.

Individual activities such as mining or buying and selling of crypto, are considered personal investments, and therefore, are not subject to tax. Similarly, registered businesses operating in the special economic zone of High Technologies Park near the capital Minsk, involved in mining, trading, initial coin offerings or other crypto-related operations are not taxed.

For Slovenia, the tax system for individuals and companies involved with BTC is rather different. While no capital gains is levied on citizens for the sale of bitcoin and other cryptocurrencies, they are still expected to pay income tax regardless of the currency being exchanged. However, companies that receive payment in BTC or from crypto mining are required to pay tax at the corporate tax rate.

The taxation of corporations depend on the circumstances of a particular case and the information provided in the declaration: income recipient status; type of income. If profits are recognized as capital gains, then the tax is 19%, say experts.

The famed blockchain island of Malta does not tax long-held digital currencies, either for capital gains or VAT. However, crypto trades executed within the day are considered similar to day trading in stocks or foreign exchange, attracting tax as business income at the rate of 35%.

Malta is perhaps one of the most crypto-friendly countries in the world, initiating legislation that has legalized a variety of crypto operations in the country. The government recognizes bitcoin as a unit of account, medium of exchange, or a store of value.

In Switzerland, one of Europes crypto havens, qualified individuals that buy, sell or hold cryptocurrencies for personal benefit are not required to pay tax on their capital gains. However, income from mining, considered self-employment income, is taxed through income tax. Profitable crypto trading by qualified professionals is subject to corporate tax while wages paid in bitcoin must be declared for income tax purposes.

What do you think about bitcoin taxation around the world? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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Eight Countries That Don't Tax Your Bitcoin Gains | Finance Bitcoin News - Bitcoin News

Bitcoin may be the most valuable cryptocurrency but it is no longer the easiest or the most profitable cryptocurrency to mine. We look at the top 5 cryptocurrencies to mine and the countries where electricity is the cheapest, which makes them a great option for setting up cryptocurrency mining rigs.

GRIN is a privacy coin launched in 2019. It is built around the Mimblewimble protocol, the coin is said to be a lightweight application of the protocol. It aims to be more scalable and less storage intensive compared to other privacy coins. Grin promises to enforce privacy by getting rid of residual transaction information on the network. Grin has unlimited coins which makes it attractive to miners.

Algorithm: Proof-of-Work

Hashing Function: MimbleWimble

Mining Reward: 60 GRIN per block

Tài X?u Online – T?ng H?p Top 11 Nhà Cái Uy Tín Nh?t 2024

ZCash is a privacy focussed cryptocurrency, it offers more privacy focussed features when compared to other coins. It was released in 2016 and was launched massively on major exchanges. It can be mined by anyone as its algorithm allows for mining using mining graphics cards.Algorithm: Proof-of-Work

Hashing Function: Equihash

Block Mining Reward: 10 ZEC

https://z.cash/

Ravencoin is a top 50 cryptocurrency named after the small blackbirds in George R. R. Martins fictional world of Westeros. It was launched in 2018 on the 3rd of January to coincide with Bitcoins launch. It was developed to enable easy and faster transfer of fungible and non-fungible assets among users. It was forked from Bitcoin and hence contains many of the same features including the POW consensus protocol. It has a maximum supply of 21 billion and currently has a market cap of just under $150 Million.

Algorithm: Proof-of-Work

Hashing Function: X16R

Block Mining Reward: 5,000 RVN

https://ravencoin.org/

Monero is one of the leading privacy coins, ranked number #14 in the cryptocurrency market. This giant of cryptocurrencies was launched in 2014 as a private, secure and untraceable cryptocurrency. It gives its users complete control of their funds and privacy preventing others from seeing your balances and transactions.

Algorithm: Proof-of-Work

Hashing Function: CryptoNightR

Block Mining Reward: 2.47 XMR

https://getmonero.org

Ethereum Classic is a continuation of the original Ethereum blockchain which was forked in 2016 after a hacker exploited a loophole which resulted in millions of Ether being stolen. From this fork Ethereum (ETH) and Ethereum Classic (ETC) were formed. ETC is ranked #17 amongst cryptocurrencies on coinmarketcap and has a Market Cap of just under a billion dollars.

Algorithm: Proof-of-Work

Hashing Function: Ethash

Block Mining Reward: 4 ETC

https://ethereumclassic.org

Elite Fixtures conducted some research in 2018 on the cost of mining bitcoin in various locations around the world. The infographic below is the result.

Please note that bitcoin is still the most valuable cryptocurrency and has a market dominance above 60%. The bitcoin halving has now happened, many expected this event to have a major effect on bitcoin prices in 2020.To find other coins worth mining use a tool such as what to mine: https://whattomine.com/coins

There are now cryptocurrency cloud mining companies which allow you to rent out cryptocurrency mining hardware for a certain period of time and they run the cryptocurrency mining operation in locations where it is cheap to mine, they decide what cryptocurrencies to mine etc. You dont need technical know-how to get involved with these mining operations. You just get regular payments that are in proportion to your investment amount or mining package that you buy.

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The Top 5 Cryptocurrencies to Mine [2020] | Coin Insider - Coin Insider

Earlier this week, ZIMBOCASH a local decentralised cryptocurrency- listed their token ZASH on Bithumb Global (a cryptocurrency exchange headquartered in South Korea).

In marketing material, ZIMBOCASH is marketing the ZASH token as a replacement alternative to Zimbabwes flailing Zimbabwe Dollar. A total of 4.5 billion ZASH tokens have been created with 950 million currently in circulation.

The Zimbabwe dollar was already collapsing with 500% inflation, before this crisis dealt a debilitating blow. We believe that ZIMBOCASH is perfectly positioned to solve this problem by fixing the amount of money in the country using blockchain technology. Our aim is to provide sound-money.

I believe Philips comments about ZIMBOCASH being perfectly positioned to solve the Zimbabwes economic turmoil are a bit premature. We reached out to ZIMBOCASH to understand where Zimbos in possession of the ZASH token will be able to use it and Philip explained to me that they are developing that network and expect organic use of the ZASH network to grow as the currency environment deteriorates in the country.

For ZIMBOCASH, listing with Bithumb offers the digital currency an opportunity to start making the ZASH token more valuable;

Our first step in establishing value is in getting it listed on an international exchange (Bithumb Global), where there is a market of buyers and sellers. On the basis that there is value derived from a market price it can become something that is used in trade

It is important to note however that Bithumb the exchange in question has been hacked a number of times;

A concern I had after going through ZIMBOCASHs marketing material was how they were going to communicate the concept of digital currencies to the ordinary Zimbabwean something theyll have to do if ZASH is to become a compelling alternative to the Zim dollar.

Philip explained that they have been doing some work on that front but believes ultimately the pain that people experience in a collapsing monetary system will cause people to naturally find alternatives that work.

Right now the clearest incentive to get the token is the fact upon signing up for the token youll get 3125 tokens. The issue with that is the value of those tokens will depend largely on the network in which you can use them. If theres nowhere to use them 3 or 4 months down the line are they valuable?

The elephant in the crypto-shaped room has been regulation or lack thereof. Interested parties would want to know what guarantees there are that the tokens would be safe. If they get the token, will ZIMBOCASH turn out to be another Golix? The expectation is that it wont be a problem since they are currently not regulated locally and not making use of local banks at the moment:

We are not operating through the banking system in Zimbabwe. There is no cash-out or cashin. Zimbabweans are allocated the token directly by signing up at our websitewww.zimbo.cash. There is no charge for signing up. It is similar to signing up for Facebook.

For those who have fears regarding volatility, Philip explained that volatility is to be expected with any currency however they belive that as their network grows stability will increase alongside;

There may be volatility in the price however, all currencies have some level of volatility. Ultimately, as a network of scale grows, the price is likely to become more stable. This is why a reference price on a market is used in trade.

However, with Zimbabwean history, people are used to changing their prices to the market rate. With the current system, people need to mark their prices to a market rate regularly. Our concern isnt what the price will be our concern is that thereisa price. If we get a price, we would have added value to a whole lot of Zimbabweans who have been allocatedZIMBOCASH, who can use it in daily trade.

That has been one of the biggest knocks when it comes to cryptocurrencies. The lack of centralisation seems to come at the price of security and accountability when things go wrong.

At the time of writing ZASH is being distributed solely via internet channels (Bithumb and the ZIMBOCASH website). If ZIMBOCASH is to realize their dream of dethroning the ZW$ as the local currency thats another aspect theyll have to improve to ensure that the Zimbabweans who arent on the internet are also included among those who can transact.

Once you have the currency where will you be able to use it? Right now beyond trading, your options are limited at the time being. In future, ZIMBOCASH will be more useful;

Ultimately, we would like to see people being able to pay for imports denominated inZIMBOCASH. This last step would require a very liquid international exchange where there isnt price slippage when there is acash-out. This is something that needs to develop over time.

Update: An earlier version of this article claimed that ZIMBOCASH was looking to replace the ZW$. This was inaccurate and the intention of ZIMBOCASH is to offer an alternative, NOT a replacement. We apologise to ZIMBOCASH and our readers for the misinterpretation.

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ZIMBOCASH Lists Cryptocurrency Token, Wants To Be Alternative To ZW$ - Technology Zimbabwe

A visual representation of the digital cryptocurrency bitcoin.

Yu Chun Christopher Wong| S3studio | Getty Images

Bitcoin faces a key technical event Monday known as the "halving." Due to take place later in the day, industry insiders are debating what effect it might have on the cryptocurrency market.

So what is the halving? You can think of it as an update to the underlying network that logs all bitcoin transactions. There are so-called "miners" on this network with specialized computing rigs competing to solve complex math problems to validate bitcoin transactions. Whoever wins that race gets rewarded in bitcoin.

On Monday, the amount of bitcoins rewarded to those miners is set to get cut in half. This is something that takes place roughly every four years to keep a lid on inflation. The current reward stands at 12.5 bitcoins, or BTC, so that will now be reduced to 6.25 BTC.

Unlike fiat currencies like the dollar, there is no central bank that manages the supply of bitcoin or its inflation rate. Instead, this is maintained thanks to a rule written into bitcoin's code by pseudonymous inventor Satoshi Nakamoto.

The total number of bitcoins that will ever be mined is capped at 21 million. Rewards to bitcoin miners keep halving until they reach zero. Bitcoin bulls say that this scarcity is part of what underpins the cryptocurrency's value and make it a potential "hedge" against currencies that are vulnerable to devaluation in times of economic crisis.

"With its finite and scheduled supply and decentralized architecture, BTC, in particular, offers the certainty needed in times like these, and will likely become a new safe-haven asset class," cryptocurrency lending start-up Nexo wrote in a note last week.

Investors are likely to closely watch the reaction of bitcoin and other cryptocurrency prices to the halving event later in the day. Some believe the event has been mostly priced into markets already, but there are others who think it could boost prices.

The past two halvings led to opposite short-term price movements, according to British bitcoin exchange CoinCorner. Bitcoin climbed 7% one month on from the first halving event in 2012, but slipped 10% a month after the second one in 2016. However, the price rose 944% six months on from the 2012 halving and 38% in the same period in 2016.

"While many anticipate bullish movements post-halving, we believe the supply shock that comes immediately after the halving event should have limited impact on price in the short term," Lennard Neo, head of research at Singapore-based bitcoin index fund provider Stack, said in a note Thursday. "As the block reward for miners decreases, there will be a time lag as miners (supply side) reposition towards market equilibrium."

"We anticipate that it could take 6-9 months before this equilibrium is found and Bitcoin realises halving-induced price appreciation. That said, further turmoil in the broader economies could accelerate its upward trajectory."

But there are also fears that the 2020 halving will also have an impact on miners' earnings, as they'll need more competitive mining gear to win bitcoin rewards.

"Miners currently need to produce more work to get the same reward," said Ed Hindi, CIO at Cayman Islands-based cryptocurrency hedge fund Tyr Capital. "Post halving their expected returns will be cut in half."

Bitcoin has risen more than 20% since the start of the year. The virtual currency, known for its volatility, suffered at sharp drop over the weekend. It briefly touched $10,000 on Friday but has since declined to around $8,800 as of Monday morning.

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Bitcoin investors are bracing for a key technical event here's what you need to know - CNBC

A cryptocurrency investor accused a teen hacker and his crew of juvenile hackers for stealing $24 million in cryptocurrency via a SIM swap attack. According to a lawsuit filed in federal court in New York, Michael Terpin, the founder and CEO of blockchain advisory firm Transform Group, claimed that a teenage hacker Ellis Pinksy (aged 15), along with his group of teen hackers, compromised his phone and stolen his cryptocurrency in 2018. Terpin is suing Pinsky (now aged 18) for $71 million under a federal racketeering law that allows for triple damages, Bloomberg reported.

Pinsky and his other cohorts are in fact evil computer geniuses with sociopathic traits who heartlessly ruin their innocent victims lives and gleefully boast of their multi-million-dollar heists, Terpin said in his complaint.

Terpin stated that Pinskys group identified people with cryptocurrency holdings and illicitly took control of their phones by launching SIM swapping attack to divert authentication messages, gain information, and breach victims cryptocurrency accounts.

What Is a SIM Swapping Attack?

A SIM swapping attack is one of the simplest ways for cybercriminals to bypass users 2FA protection. In a SIM swap attack, the attacker calls service providers and tricks them into changing a victims phone number to an attacker-controlled SIM card. This allows the attacker to reset passwords and gain access to victims sensitive data.

In a similar cyber heist, Jack Monroe, a popular food blogger and activist, revealed that she lost about 5,000 (around US$ 6,395) from her bank account after being hit by a SIM-Swapping attack. The British-based writer stated that her phone number was seized and re-activated on another SIM card, despite using two-factor authentication (2FA). Monroe stated the attackers were able to receive her 2FA messages and accessed her bank and payment accounts.

It seems my card details and PayPal info were lifted from an online transaction. The phone number was ported to a new SIM, meaning criminals access/bypass authentication and authorize payments. Im an autistic, methodical, ruthless investigator, and I have a LOT of info to go on, Jack Monroe said.

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Teen Hackers Accused of Cryptocurrency Theft, Sued For $71 Mn - CISO MAG

Coinbase CEO Brian Armstrong says a new bill being considered by lawmakers in California would have a major impact on digital assets and the future of finance.

The legislation seeks to change the meaning of securities under state law to exempt certain cryptocurrencies. Lawmakers and regulators in the US have struggled to clarify which digital currencies are securities within the context of the Howey Test, a federal metric used to determine if a particular asset qualifies as an investment contract.

According to the proposal, assets whose profits do not fully depend on the management efforts of third parties will not be considered as securities.

This bill would create an exception from the above definition by providing that a digital asset meeting specified criteria is presumptively not an investment contract within the meaning of a security. The bill would allow that presumption to be rebutted upon good cause shown by clear and convincing evidence by the Commissioner of Business Oversight, as specified.

If approved, California would be one of the first states in the nation to set a clear definition of digital assets, and Armstrong believes it would position the West Coast as the main hub for a new financial ecosystem.

This would be huge for California if it happens ensuring the future of finance is built on the west coast.

So many startups are struggling with this right now the current securities laws are well intentioned, but stifling a lot of innovation right now.

Featured Image: Shutterstock/oneinchpunch

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Coinbase CEO Says New Cryptocurrency Bill Would Have Major Impact on Future of Finance - The Daily Hodl

Longtime hedge fund manager Paul Tudor Jonestold CNBC on Monday that Wall Street could be witnessing the historic "birthing of a store of value" through popular cryptocurrency bitcoin.

"It's a great speculation," Jones said on "Squawk Box."

He said he has "just over 1% of my assets in bitcoin. Maybe it's almost 2. That seems like the right number right now."

"Every day that goes by that bitcoin survives, the trust in it will go up," he added.

Jones, founder and chief executive at Tudor Investment and largely considered one of the best macroeconomic traders ever, told investors in a recent letter that he's betting on bitcoin as part of a far-larger strategy of maximizing profits.

For investors who have followed Jones' success in predicting the path of economic events, including his prescient bets against the U.S. stock market in 1987, his foray into cryptocurrency may seem unusual. But Jones defended his new investment, especially versus other stores of value like U.S. dollars.

Modern government-backed currencies, he argued, will almost always diminish in value over time. Many investors shy away from cash over the long term as legislatures continue to spend more than they generate in revenues and lean on central banks to pump cash into the economy, decreasing the purchasing power of each individual dollar.

"If you take cash, on the other hand, and you think about it from a purchasing power standpoint, if you own cash in the world today, you know your central bank has an avowed goal of depreciating its value 2% per year," Jones said. "So you have, in essence, a wasting asset in your hands."

Bitcoin, on the other hand, isn't subject to the whims of government spending, but is itself risky because it's only 11 years old, Jones said.He also confirmed that he has a portion of his portfolio invested in gold, a popular inflation hedge, and said he thought the metal could go "substantially higher" if inflation spikes.

"When I think of bitcoin, look at it as one tiny part of a portfolio. It may end up being the best performer of all of them, I kind of think it might be," he said. "But I'm very conservative. I'm going to keep a tiny percent of my assets in it and that's it. It has not stood the test of time, for instance, the way gold has."

Jones also said Monday that the economy would be in a "Second Depression" if the coronavirus pandemic doesn't get contained in a year.

The investor told CNBC in late March that the stock market could shoot higher by June if Covid-19 cases began to peak. The S&P 500 is up more than 15% since those comments on March 26 and the Nasdaq Composite has since turned positive for 2020.

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Paul Tudor Jones calls bitcoin a 'great speculation,' says he has almost 2% of his assets in it - CNBC

It hasnt been long since bitcoin broke the ground in 2009, turning the monetary landscape upside down. With its decentralized nature and exceptional privacy, cryptocurrency quickly became popular among young people trying to make quick money.

As interesting as it is for tech and financial experts alike, theres no way around the harsh truth thats often swiped under the rug while discussing crypto: it damages the environment and the communities where its mined.

There has been extensive research done on the disruptive effects of cryptocurrency on the financial market, however, fewer people have highlighted the environmental damage that it causes along the way.

What is crypto mining?

In order to maximize their profits, crypto miners always try to seek out places with low-cost electricity and weak environmental policies, ultimately creating hazards for the environments and impact local populations without benefitting the communities.

The way the crypto miners produce currency is through an energy-intensive process requiring vast computing resources. According to recent estimates, over the course of a year, cryptocurrency consumes around 64 TWh (terawatt hours) of energy. Ranking it on top of the country of Switzerland by energy consumption, which 58 TWh per year.

As financial technologies become more and more accessible, ultimately making our lives much easier, there are certain aspects of fintech that create lasting damage to human health and the environment around us. Some activities that were once only a prerogative of the privileged few, like foreign exchange trading, are now accessible for everyone with a smartphone. This mobile trading FX brokers list shows just how much more accessible it is for virtually anyone to get involved in the foreign exchange market. With the increased accessibility to both FX, crypto, and other interesting new financial technologies, there should also be an increased awareness of the potential damaging side-effects that they might entail.

Due to its decentralized control, most cryptocurrencies have emerged from the grassroots communities, rather being corporate or government managed. To put it simplistically, cryptocurrencies are generated by using computers to solve puzzles that are stored in a blockchain, which are accessible on a decentralized database.

The difficulty of the puzzles increases proportionally to the number of miners competing to unlock bitcoins. In order to continuously solve the algorithms, mining servers require a tremendous source of energy. Ultimately, if the energy expense of mining exceeds the income from the currency produced, there is no more motivation to continue mining, which also significantly undermines the infrastructure that validates its monetary value.

In practice, this means that the possibility of profiting from mining cryptocurrency rises with the more powerful computer, faster internet connection, and the cheaper infrastructural services, such as electricity.

The damaging environmental impact of crypto mining

Despite its digital nature, the impact that cryptocurrency has on the physical environment and the welfare of communities where its mined cant be ignored.

With each cryptocurrency, the rising electricity requirements to produce a single coin can lead to an almost inevitable cliff of negative net social benefit, states a recent study about the monetary price of health and air quality impacts of cryptocurrencies.

Researchers claim that although mining activities produce financial value, electricity use creates crypto damage a term coined to illustrate the effects of digital exchange on human health and the environment.

There are ongoing debates on the exact extent of the impact that mining has on the environment. Even though it is agreed upon that crypto mining damages the environment, the impacts are markedly higher in places where the mining is dependent on dirty energy sources, such as the coal-fueled crypto mines in Mongolia. Coal energy sources offer prices that are 30% cheaper than the average energy consumption rates for industrial firms. With that being said, any cryptocurrency mined in China will produce four times as much CO2 pollution as the volume produced by renewable energy sources in Canada.

Sustainable way forward

With the growing popularity of cryptocurrency, as demonstrated by it entering more mainstream markets and being embraced by traditional financial institutions, we can surely foresee that crypto isnt going to go anywhere anytime soon. With the damage that it currently does to the environment, its also evident that its not sustainable, for now.

There are several promising figures that show a sustainable way of going forward with the crypto mining industry.

Recent figures show that crypto-mining facilities are looking into subsidizing the development of renewable energy resources in order to seek the cheapest resource to optimize the consumption value. The relationship between renewable energy and crypto-mining is well demonstrated in the bitcoin mining operations in China. The provinces hosting the most crypto-mining facilities correlate with the ones producing energy with renewable resources.

80% of Chinas bitcoin mining operations were based in Sichuan in 2017 a province that generated approximately 90% of its energy production from renewable resources, thereby accounting for 43% of global Bitcoin mining operations at the time.

The profitability of cryptocurrency mining is heavily dependent on its market value coupled with the price of electricity. If the value of a cryptocurrency decreases and goes below its cost of production, mining becomes unprofitable due to the large costs of the energy it needs. The most well-off crypto-miners work at the lowest cost by accessing the cheapest electricity capable of achieving intense use. As a result, miners are finding inexpensive energy markets while taking advantage of policy conditions that do not control how energy can be consumed.

Going forward, the crypto industry can become more sustainable if it commits to using renewable, clean energy in order to sustain itself. As the statistics show, in the long run, renewable energy is the future of electricity consumption. Utilizing the low-cost nature, crypto miners have an incentive to continue mining while minimizing their damage to the environment. However due to the decentralized nature of crypto that makes it so attractive to many will come as a detriment to the initiative, as at the end of the day theres no one to make the decision to go green but the individual miners.

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No way around it: the irreparable damage cryptocurrency does to the environment - Green Prophet