Energy guzzling cryptocurrencies could make commodity markets volatile.
BITCOINS AND cryptocurrencies that were a little known phenomenon in early 2017 became larger than life by end of the year. The value of a bitcoin jumped from $900 to $19,000 in the year before, and has now plunged by 40 per cent—it was worth US $10,000 on the Luxembourg-based Bitstamp exchange on January 17—showing intense volatility. Though not recognised by any nation, cryptocurrencies have attained a stature of the inevitable and forced their way into the world commodity markets. You can buy anything, from cinema tickets to gadgets to petrol, with them.
They have made Jamie Dimon, CEO of the world’s biggest banking group JP Morgan, eat his words. In September 2016 he had called bitcoins a fraud and a massive Ponzi scheme. Four months later, in an interview to Fox TV on January 9, he regretted his remark and said, “Blockchain is real. You can have crypto yen and dollars and stuff like that.”
Blockchain technology, which forms the basis of cryptocurrencies, is a new way to manage data. It is a software to write a digital ledger to manage digital assets. It is nothing that the world cannot live without. But it is a novelty that would help corporations to build bigger and scalable businesses in the future. It aims to create records that cannot be hacked, databases that cannot be corrupted or extinguished. Paradoxically, over 0.9 million bitcoins have been lost or hacked till date in four separate incidents, the most famous being the Mt Gox exchange scam that came to light in 2014.
This story is from the February 01, 2018 edition of Down To Earth.
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This story is from the February 01, 2018 edition of Down To Earth.
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