Considering investing in Bitcoin?
Maybe you should think again.
A professor and expert on international trade argues that the common cryptocurrency "may not last long", and further says that the future of Bitcoin is unclear.
The researcher, Aswar Persad, a senior lecturer in international commerce at the prestigious Cornell University in New York and author of a book on digital economics, explained to CNBC that the problem is actually the blockchain infrastructure on which bitcoin is based.
Blockchain, we will briefly explain, is a technology that enables secure business activity and transaction verification with the help of encrypted information distributed over a global computer network.
"Bitcoin's blockchain is not very efficient, as the currency is based on an attack mechanism that is destructive to the environment," Persad explained.
Indeed, a study published this year found that the carbon footprint of bitcoin mining is already equal to that of New Zealand as a whole, emitting about 36.95 megatons of carbon dioxide per year.
"May not last long."
Bitcoin, Photo: Reuters
In other words, the computers needed to mine Bitcoin each year consume a similar amount of electricity that the state of New Zealand consumes in the same amount of time, and that is even when the currency is still used as a kind of underground financial tool.
How much electricity will be wasted and greenhouse gases emitted when it becomes mainstream?
A great deal, which is one of the reasons Presad does not foresee a bright future for Bitcoin.
However, Persad certainly predicts that more efficient and greener blockchain infrastructures will form the basis for the future of the economy and trade, and estimates that other digital currencies will eventually take the place of bitcoin as the leading digital currency.
"Crypto has led many central banks to consider issuing digital versions of their currencies," the researcher concluded.
"As much as you do not like Bitcoin, it has ignited a revolution that will ultimately help us all, directly or indirectly."
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