Ecoblogi – A Blog by Daniel Elkama

A person using the nick Satoshi Nakamoto created bitcoin as a virtual deregulated international currency in 2008, a currency that can be bought and sold with euros and dollars or other real-world currency. According to Satoshi Nakamoto, the 100 millionths of bitcoin are named satoshis. The value of one bitcoin is currently around €30,000, while in 2008 it was a few cents. Many companies accept bitcoin as a means of payment. The value of Bitcoin has skyrocketed, but I would argue that that value is mostly air, a bubble that will burst in the next few years. In addition, Bitcoin is honey for criminals and causes environmental problems with electricity consumption and electronic waste. Today, the so-called there are dozens of cryptocurrencies, and their values vary from hundredths of a cent to tens of thousands of euros. Bitcoin has one major weakness that it doesn't have, but the euro and the dollar do: fundamental constancy of value. The value of Bitcoin fluctuates enormously compared to normal currency. Losses in investments can be very large. I am talking about bitcoin here because it is the most prominent cryptocurrency, the same applies to others.

Satoshi Nakamoto wanted to create an international currency independent of regulation and central banks. Bitcoin's idea is anarchistic. His idealistic thought based on independence and freedom, but that freedom is the curse of bitcoin. Many have heard of bitcoin mining. This is a misleading term. Simply explained, mining means that bitcoin transfers are recorded and protected mathematically and cryptologically. This takes a lot of computing power and therefore consumes a lot of electricity when the processors are working. The miners secure the transfers and get money from this. This way you can be sure of the correctness of the transfers. Bitcoins are transferred to addresses from which the money may never be recovered, and it is often not possible to verify who owns the bitcoin wallet to which the money is transferred. Because of this, Bitcoin is popular with criminals, especially organized crime.

Bitcoin can be stored with apps or a program on a computer, i.e. a bitcoin wallet, which is behind a password. Forgetting the password has led to the loss of billions of euros. Bitcoins are stored online by many "banks", often owned by criminals and untraceable. Bitcoins are often stolen from the customer's account. Many scams ask you to send money in bitcoins, and the sent money disappears into the bit space for the criminals. In Bitcoin, anonymity, lack of control and the untraceability of transfers etc. are hugely profitable for criminals. Organized crime makes use of bitcoin, e.g. arms, drug and human traffickers accept payments and transfer money with bitcoins. Bitcoin is also a great way to evade taxes and bribes are also paid to corrupt and dictatorial decision-makers in bitcoins.

El Salvador made a big mistake by switching to mostly bitcoin. The result was that many people could not even afford food, bankruptcies of people and companies, corruption and the state's creditworthiness. The country's president even dreamed of an unrealized project called Bitcoin City, which would have received electricity from the volcano's geothermal energy to mine bitcoin. The International Monetary Fund, IMF, has demanded that El Salvador abandon the use of bitcoin as an official currency. Bitcoin has also caused serious problems in Africa, especially in connection with corruption. Bitcoin is a techno-hype with vain hopes. Bitcoin evokes big "visions" like Bitcoin City for the naive and poorly educated, which end in disappointment.

The value of Bitcoin has increased tremendously, but the increase in value has slowed down in recent years and has been long time at around 30,000 euros. At its peak, the value of bitcoin was 50,000 €. This indicates great instability. The Bitcoin system is already built in such a way that its value cannot increase indefinitely, but its value first increases rapidly, but then slows down. This is a mathematical fact. Bitcoin is based on saving and many think of it as electronic gold. Because of this, the value of bitcoin has increased, the demand has been high when a large increase in value is sought, however at some point the demand no longer increases, and neither does the value of bitcoin. It is a bubble similar to the stock bubbles that led to stock market crashes. Bitcoin has even been talked about as a big pyramid scheme. I think the value of bitcoin is going to collapse in the next few years. There are already numerous signs of instability. Normally, the financial system stabilizes the money market and currency. Bitcoin lacks this.

Bitcoin mining causes completely unnecessary electricity consumption and requires a lot of fossil fuels and nuclear power. Miners are looking for the cheapest electricity, not the cleanest electricity. The enormous calculations required by mining require immense processor power, and cooling computers in particular consumes electricity. Used servers are used for a couple of years and after that they become a huge amount of scrap, which often ends up in Africa or China. Bitcoin mining causes at least 1 % of global climate emissions. This corresponds to a medium-sized Western country. Each transfer of one bitcoin causes more than a ton of carbon emissions. Bitcoin can be said to be a very dirty currency, carbon black, and not bit gold. If Bitcoin became common for general use, its contribution to climate emissions would be huge. The transfer of one bitcoin consumes 1000 kWh of electricity, a large detached house's consumption is 5000 kWh, and the average of a single Finn is more than 1000 kWh. Bitcoin transfers are made enormously, the entire bitcoin system is based on transfers. Electricity is therefore consumed enormously for no reason.

A sustainable currency system is built on regulation, control and supervision. Bitcoin and other cryptocurrencies are ecologically, socially and economically unsustainable and associated with corruption and crime. Perhaps the collapse of bitcoin will bring more sense to the market again.

Daniel Elkama