facebookHow would you argue the case for cryptocurrency as the financial instrument of the future, considering the environmental costs of crypto-mining? - Seedly

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Fang Yi Chan

14 May 2021

Events

How would you argue the case for cryptocurrency as the financial instrument of the future, considering the environmental costs of crypto-mining?

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So I believe that what we want to talk about is the purpose of crypto mining, which for first generation coins such as bitcoins, is to record transactions on the ledger via the proof of work method so no one is able to cheat the system. Yes, it may be true that crypto mining via this method does require a lot of energy. However, as crypto currencies matures, the newer generation coins are moving towards a proof of stake method which uses a very significantly smaller amount of energy compared to the proof of work method. So as time progresses, the environmental issue will improve and likely be better than the networks we depend on today for the same purposes. The other methods of transactions which uses the VISA and Mastercard network for example also take up a very large amount of energy to function, albeit less than bitcoin. These networks, however, contain errors in their transaction records whereas crytpo currencies do not. Also, as we progress, there are other functions added on to crypto currencies such as smart contracts which the VISA Mastercard networks are unable to process, so it will no longer be an apples to apples comparison then.

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