Crypto? Still a crypt-no to me
A few years ago, I have written a post about why am I against investing in cyptos. Back then the price was about 4-5k. Now it's 60k.!!!
Am I wrong? In the expectations of capital gains, perhaps, but I am sure that anyone can verify that the points I highlighted back then still stands and probably stands even stronger than ever.
For example, average confirmation time is now ~110mins (as of writing) versus ~10mins (as of previous post). There's absolutely no way BTC transact faster than any incumbent payment methods for most intents and purposes.
However, I am not here today to defend my thesis or stuff like that. Given the insane spike up of BTC again, I would like to highlight a few more adverse effects that crypto is causing, and will get worse if nobody is doing anything to stop or improve it.
CHIPS SHORTAGE
If you are out of your rock, you would have known that the world have been in a semiconductor chips ("chip") shortage for awhile now, due to the fact that every new thing requires them, on top of all the existing products that we use.
'Smart' appliances? Chips
AI in cars? Chips
Data centers? Chips
Mobile phones, tablets, laptops? Chips
Crypto mining hardware? CHIPS.
If you are a gamer, you would probably have experienced the insane GPU draught that hit us a few year back during the original crypto boom. GPUs everywhere were out of stock and being resold for 2-3x their retail prices. Guess what, it's back, and back then we do not have a global chip shortage. Go figure.
If the crypto boom continues, then obviously a bigger and bigger chunk of chips will go into manufacturing application-specific integrated circuit (ASIC)s that are specifically used for mining cryptocurrencies. This means that even when the crypto bubble pops, gamers will not be able to enjoy cheaper GPUs from miners. They are simply going to be hoarded or thrown away. Are we not already creating enough e-waste here?
This cascading effect will also result in a bottlenecked production of cars, phones, electronics, and virtually anything that uses semiconductor chips in them. In my opinion, all which have far better applications and impact than mining cryptocurrencies.
This would also mean that if this trend continues, you, you, and YOU, everyone will be paying increased prices for the stuff we actually use because manufacturers have to compete for the chips share. Face it, capitalism will mean that if more profits are to be made manufacturing ASICs, then nobody will give a shit about smartphones and GPUs if they can't sell as much.
Relevant links:
2. ELECTRICITY
Mining crypto requires a huge ton of electricity, no surprises there. While green energy is getting more and more on track, a good number of electricity produced in the world are still from fossil fuels (~60%) .
The figure is further skewed by the fact that most Bitcoin mines are in China, and China does not have that much renewables. In fact, most mining farms in China runs on coal. China also provides more than half of BTC's hash power.
So unless the world is already running on green energy and are easily accessible, the issue of electricity-related pollution for mining crypto still remains undesirable. Of course, being the physics nerd I am, I fully welcome a world which systems runs on blockchains with electricity provided with a Dyson Sphere. But it sucks for the foreseeable future.
Relevant links:
I am just barely touching the finance part of it here, as it is unpredictable as always, so this is definitely not a buy or sell recommendation. Personally, I just don't see any of these issues being resolved anytime soon, so in terms of sustainability, I just don't see it.
Obviously the finance side of me would be a clear put in any other cases, but because crypto have proven time and time again that it can remain irrational longer than anyone can remain solvent, I'm not touching this - neither long nor short.
Disclaimer: The author, me, is not a finance professional and is closer to a retard who sells naked calls on a regular basis. You should not take this as investment advice.
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