If Bitcoin had a positive weekend, risky events are expected in the coming weeks, risking everything upside down. Indeed, after several refusals following ETF proposals on Bitcoin, many people think that the Securities and Exchange Commission (SEC) will approve the next ETFs.
Is Bitcoin at risk of collapsing in the face of the launch of a BTC ETF?
The SEC decision on an ETF may well be the next bullish catalyst leading Bitcoin to new highs. It would then provide Americans with much easier access and allow a massive influx of money. The price of Bitcoin would then rise automatically. However, it is also likely that good news will cause Bitcoin to fall following one of the upstream profit taking. Be careful, in this case, not to be too greedy and risk debt. If you are afraid of this, go to the site of partners-finances.fr. You will find a lot of information on the question that will allow you to know whether or not you can invest in cryptocurrency.
Does cryptocurrency have a role in inflation?
By observing the fluctuation of cryptocurrency prices, it is quite possible to understand the principle of supply and demand. To live comfortably, people need access to a wide and diverse range of goods. Inflation is assessed in several ways and according to the types of services and products examined. It is the very opposite of deflation, which leads to a general fall in prices. When a currency loses value, price inflation will be observed.
Cryptocurrencies don’t necessarily know inflation. They are gaining in value and popularity because they cannot be manipulated and are otherwise more and more useful. The role of this totally dematerialized money in inflation is therefore not proven, even if there could be a possible correlation between the two.
Cryptocurrency as an alternative to traditional systems
Using cryptocurrency offers several advantages. First of all, it allows money to be transferred over the Internet without having problems with delays or refused payments. An alternative to government-controlled currency, it is governed by a decentralized network with a set of transparent rules. Its price remains based on demand and is therefore not really impacted by inflation. Cryptocurrencies have real value and therefore do not align with the traditional economy. However, the more cryptocurrencies increase in value, the more it is possible to question their ability to be in harmony with ecology and sustainable development.
Ecology and cryptocurrencies, are they compatible?
While Bitcoin has been operating since 2009, it was designed on the basis of an IT ecosystem, the blockchain. The question that arises today is whether mining has the possibility of becoming less energy intensive. Because the machines used for mining consume a lot of electrical energy. It therefore seems necessary for cryptocurrencies to reduce their carbon footprint if they are to be able to create an ever stronger membership.
However, developers of new cryptocurrencies are highlighting a new practice. They thus move from Proof of Work to Proof of Stake. Several changes are thus notable:
- The validation of the creation of blocks on the blockchain has changed.
- With the POS, you must have acquired tokens to have access to the creation and validation of new blocks. They have the same role as electrical energy in proof of work. The Proof of Stake therefore becomes a kind of virtual mining avoiding the energy expenditure of the POW.
- Mining machine needs become almost zero with the POS. Only validator nodes keep transactions running smoothly, reducing power consumption to next to nothing.
Cryptocurrencies that are based on this operation are developing, like Cardano or Solana. It should not be forgotten that they are already an energy saving in themselves. Indeed, they make it possible to considerably reduce intermediaries during each transaction. The latter is immutable once in the blockchain, which is not the case for a traditional settlement.
The impact of cryptocurrencies in the banking world
Cryptocurrencies are growing as the world turns to massive digitalization, which has definite consequences for banks. ATMs are thus tending to see their number decrease and some small banks are closing in order to be grouped together on larger poles.
With a high number of branches, energy consumption remains very high. The question therefore arises as to whether cryptocurrencies are not already, in a certain way, less energy intensive. The mining of some is done in part via renewable energies. Geothermal energy is used in Iceland, hydroelectricity in China. A complementarity between cryptocurrencies and ecology could therefore be put forward, to the detriment of the traditional system in the coming years.