- Best Graphics Card for Cryptocurrency-Mining
- The debate on cryptocurrency is still raging, as countries decide whether to embrace, regulate or ban cryptocurrencies.
- On top of this, the energy-intensive sector has recently come under fire from climate experts.
- Crypto experts share their predictions for 2022.
- Best Graphics Card for Cryptocurrency-Mining
From El Salvador adopting bitcoin as legal tender – a world first – to China banning all cryptocurrency transactions, 2021 was an eventful year in the world of digital currencies.
Will 2022 hold more surprises? We asked five crypto experts what to look out for.
Environmental fallout
Best Graphics Card for Cryptocurrency-Mining
The steady growth of the cryptocurrency industry over the years has drawn more attention to its carbon footprint.
Bitcoin and other cryptocurrencies are created or “mined” by high-powered computers competing to solve complex mathematical puzzles, which guzzle energy and fuel planet-warming emissions unless they run on power from renewable sources.
Bitcoin mining is currently estimated to account for about 0.5% of global electricity consumption, using up more power than Sweden does in a year, according to an index compiled by the University of Cambridge.
Pete Howson, a senior lecturer in international development at Northumbria University in Britain, said 2022 is likely to see “stronger public opposition” to bitcoin on environmental grounds, which could force regulators to act more
Best Graphics Card for Cryptocurrency-Miningdecisively.
A YouGov poll in October found nearly half of Britons supported banning cryptocurrencies to fight climate change.
Scandinavian countries have voiced support for a potential ban on bitcoin mining across Europe, and, if that happens, authorities elsewhere might be driven to take a similar stance, said Howson.
Have you read?
Best Graphics Card for Cryptocurrency-Mining
- Study: This is how many Americans have traded cryptocurrency
- How to make cryptocurrency more sustainable
- Cryptocurrencies can enable financial inclusion. Will you participate?
“Massive power outages caused 700 deaths in Texas this time last year … and since then, we’ve seen the U.S. overtake China as the bitcoin global superpower, with much of that extra burden added to the Texas grid,” he said.
Best Graphics Card for Cryptocurrency-Mining
“If again we see ordinary folks freeze to death in places like Texas, the bitcoin bros will be out on their ears.”
At the same time, the industry could be pressured into addressing its “sustainability challenges”, according to Alexander Hoptner, who heads BitMEX, one of the world’s largest virtual currency derivatives exchanges.
Best Graphics Card for Cryptocurrency-Mining
In November, the company said it had gone carbon neutral, offsetting emissions from its bitcoin transactions and servers by buying $100,000 in CO2 credits, a model some green groups criticise, saying it simply gives major polluters a way to avoid cutting their own carbon output.
Best Graphics Card for Cryptocurrency-Mining
“We’ve already had very encouraging chats with other exchanges, protocols, and organisations who are keen to work together to help lower the environmental impact of crypto,” said Hoptner.
“I think 2022 will be the year that the crypto industry comes together to answer those who’ve challenged us to seize this responsibility.”
Central banks go digital
Best Graphics Card for Cryptocurrency-Mining
State-issued digital coins will begin to compete with cryptocurrencies in 2022, as more nations trial their own central bank digital currencies – or CBDCs – said Eswar Prasad, a trade policy professor at Cornell University in New York.
“Central banks around the world are bowing to the reality that digital payments are becoming the norm,” he said.
“Maintaining the relevance of central bank money in retail transactions necessitates the creation of digital versions of their currencies.”
From Russia to Chile, many countries have started to look into CBDCs, with tests and rollouts scheduled for 2022.
Some, like Japan and Sweden, have already started trials.
Best Graphics Card for Cryptocurrency-Mining
China has coupled its CBDC plans with a sweeping ban on cryptocurrencies and India is looking to do the same.
“The emergence and widespread adoption of CBDCs could undercut some cryptocurrencies, especially stablecoins (which are backed by reserves of dollars or other assets), by making efficient and low-cost digital payments widely and easily accessible,” said Prasad.
Legal tender
Best Graphics Card for Cryptocurrency-Mining
While some nations look to ban cryptocurrencies, others might choose to bring them into the financial fold instead, said Hoptner of BitMEX.
“Inspired by the El Salvador ‘experiment’ … more developing countries will embrace bitcoin as legal tender,” he said.
In September, the Central American country became the first to adopt bitcoin as valid currency alongside its local currency, the U.S. dollar.
President Nayib Bukele said this would help millions of Salvadorans living abroad send money back home, as well as boost financial inclusion, investment, tourism and development.
What is the World Economic Forum doing about blockchain?
Best Graphics Card for Cryptocurrency-Mining
Blockchain is an early-stage technology that enables the decentralized and secure storage and transfer of information and value. Though the most well-known use case is cryptocurrencies such as bitcoin, which enable the electronic transfer of funds without banking networks, blockchain can be applied to a wider range of purposes. It has potential to be a powerful tool for tracking goods, data, documentation and transactions. The applications are seemingly limitless; it could cut out intermediaries, potentially reduce corruption, increase trust and empower users. In this way, blockchain could be relevant to numerous industries.
Best Graphics Card for Cryptocurrency-Mining
That said, blockchain also entails significant trade-offs with respect to efficiency and scalability, and numerous risks that are increasingly coming to the attention of policy-makers. These include the use of cryptocurrency in ransomware attacks, fraud and illicit activity, and the energy consumption and environmental footprint of some blockchain networks. Consumer protection is also an important and often overlooked issue, with cryptocurrency, so-called “stablecoins” and decentralized applications operating on blockchain technology posing risks to end-users of lost funds and also risks to broader financial stability depending on adoption levels.
Read more about the work we have launched on blockchain and distributed ledger technologies – to ensure the technology is deployed responsibly and for the benefit of all. We’re working on accelerating the most impactful blockchain use cases, ranging from making supply chains more inclusive to making governments more transparent, as well as supporting central banks in exploring digital currencies.
The move generated global media attention but also attracted criticism amid technical problems and concerns that less tech-savvy older people and those living in rural areas with limited internet access would be left out.
The International Monetary Fund warned against the decision, citing bitcoin’s high price volatility and risks to consumer protection, financial integrity and financial stability.
Still, other governments might look at adopting bitcoin as a way to hedge against inflation, enable more affordable remittances and give people more payment options, said Hoptner.
“El Salvador might have been the first, but it certainly won’t be the last,” he said.
Taming the ‘wild west’
In August, the chair of the U.S. Securities and Exchange Commission described the world of decentralised finance platforms – also called DeFi – as a “Wild West”, urging Congress to give the agency more authority to police the currently unregulated, blockchain-based banking services.
Worried about the lack of consumer protection and the weak standard of anti-money laundering checks, regulators around the world put trading platforms under increased scrutiny throughout 2021.
“We can expect a more well-defined regulatory framework to emerge, with a goal to bridge the crypto world with the traditional financial systems,” said Ying-Ying Hsieh, associate director of the Centre for Cryptocurrency Research and Engineering at Imperial College in London.
But decentralised finance platforms will keep explanding into areas like lending, trading and derivatives, said David Yermack, a finance professor at New York University’s Stern School of Business.
“We have seen rapid rates of growth and innovation in this space throughout 2021, and regulators face clear challenges in integrating these platforms into traditional compliance frameworks,” he said. https://embed.acast.com/5f7ddb9db9d0d80913931888/5fc7c28be82b112b414a72d2 Share License and Republishing
World Economic Forum Type may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use. Written by
Umberto Bacchi, Journalist, Thomson Reuters Foundation
This article is published in collaboration with Thomson Reuters Foundation trust.org.
The views expressed in this article are those of the author alone and not the World Economic Forum.
Subscribe for updates
A weekly update of what’s on the Global Agenda
More on Public Finance and Social Protection View all
What’s next for bitcoin and crypto? The trends to watch in 2022Countries are still debating whether to ban, regulate or embrace energy-intensive digital currencies. Five crypto experts share their predictions for 2022.Umberto Bacchi · Thomson Reuters Foundation trust.org 10 Jan 2022Country Financing Roadmap for the SDGs: Saint LuciaThe Saint Lucia CFR report is the result of multistakeholder discussions with experts, thought leaders and representatives from more than 50 institutions, including public-sector institut…Report — 3 December 2021How can developing economies recover from the pandemic?M. Ayhan Kose and Franziska Ohnsorge · VoxEU 08 Nov 2021This is how much house prices are outpacing rents across EuropeEmma Charlton 22 Oct 2021China’s digital yuan app has now been used by 139 million peopleTim Fries · The Tokenist 29 Sep 2021This is what global tax reforms will mean for Asia’s tech giantsDinar Prihardini, Andrew Hodge, Ruud de Mooij, and Era Dabla-Norris · IMF Blog 21 Sep 2021
About Us
Events
Media
More from the Forum
- Strategic Intelligence
- UpLink
- Global Shapers
- Young Global Leaders
- Schwab Foundation for Social Entrepreneurship
- Centre for the Fourth Industrial Revolution
- New Champions
Partners & Members
Language Editions
Privacy Policy & Terms of Service
© 2022 World Economic Forum