The bad sides of cryptocurrencies

Leo Garnier

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Cryptocurrencies. These first appeared about a decade ago but didn’t lift off until a few years back. The most common example of these is the Bitcoin: this virtual coin started costing a few cents only but recently rose to 15k$ each. Cryptocurrencies eliminate the need for using banks for any transaction. But these have critical impacts on economy, criminality, and environment. Let’s see what the bad sides of cryptocurrencies are.

What are cryptocurrencies?

Let’s take a simple example for our study: the bitcoin. The Bitcoin is the most famous cryptocurrency at the moment. Famous among internet businesses and even the Chinese government, the Bitcoin allows you to make transactions easily.A picture of a bitcoin.

The Bitcoin’s price fluctuates along with its success, and early investors saw a massive increase in their investment as the price of a coin went up more than a thousand times its original price.

The concept is simple. Crypto miners all around the world watch the value of the coin. These men and women use computers to calculate transactions made by the coins. This allows for security, and these users get a share in return. But the number of crypto miners is skyrocketing. This brings us to the first point: the environment.

Cryptocurrency markets are a disaster for the planet

Mining currencies require power. A lot of it, in fact. How? It’s simple: miners use computers to calculate power. But the amount of calculations a single computer can make is fairly low. This is the starting point for cryptocurrency farms. These are basically concentrations of computers that calculate the movements of currencies at all time. But the amount of power drawn is absolutely massive. This is turn generates enormous amounts of pollution.

Most of the mining takes place in China, one of the most polluted countries in the world. China took a big part in launching cryptocurrencies, and the rest of the world does not see kindly to it. The “I don’t care about the rest of the world” attitude of China is already an immense problem when it comes to pollution. The cryptocurrency is just another problem on this list. But this is another topic for another time. Let’s move on to the second aspect: the crime.

Money laundering and extortions

The rise of cryptocurrencies is a godsend for criminals. Laundering money through cryptocurrencies is an easy process: the number of transactions that can be made easily make tracking the original money near impossible.

This, in turn, makes extortion and intimidation easier. As the number of currencies increase, keeping track of all the records becomes near impossible. A correlation between high-rate crime and the increase of cryptocurrencies has already been shown here. 

What those cybercriminals do is fairly simple: they “attack” websites of big corporations, making them unusable, or simply stealing valuable data. They then proceed to ransom said companies through multiple transfers in cryptocurrencies. The transfers eventually get lost in the constant shift of currencies, and the criminals end up getting much more than what they bargained for.

This is a new form of criminality for a new form of currency. The “unviolable” nature of cryptocurrency was also recently proved wrong when hackers managed to steal $70M worth of Bitcoin. 

A negative impact on economy worldwide

Because cryptocurrencies can be used anywhere and are hard to be traced, they can be used on what is commonly referred to as the deep net or dark web. This section of the web that is unavailable to most users is where all illegal trafficking websites take place: drugs, human trafficking, weapons…

Cryptocurrencies can easily be used to buy from these websites. This, in turn, removes money from the public’s pockets and puts them in that of the criminals. The problem is, this money would normally have a finite amount. But since the cryptocurrency values keep inflating, these amounts can virtually become endless as more and more users delve into them.

A chart of Bitcoin's current prices.
A chart of Bitcoin’s current prices.

The mere concept of those currencies is worse than what markets could show before. When actions and money transfers would refer to set values, these cryptocurrencies are constantly fluctuating. Many users have lost thousands from their initial investments. Several big companies are starting to decline the use of cryptocurrencies, namely the world’s biggest gaming platform, steam.

Plus, the increase in demand for computer components is making prices skyrocket for all users, including non-miners. 

It is very possible that the Bitcoin bubble will burst soon, and with it other cryptocurrencies may fall. But as things are now, cryptocurrencies are simply unsustainable for our society.

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Leo Garnier