The secret detriments of cryptocurrency

Lindsay Steinberg, Copy Chief

The rise, as well as the fall, of cryptocurrency has taken the media by storm, along with the positives and negatives that follow the currency. Whether it is Bitcoin, Ethereum, or the similar NFTs, people view them as investments and make speculations about them like anyone on Wall Street would do with stocks. But are they truly the genius investment many across social platforms would say they are? 

Bitcoin, one of the most well-known currencies, has been around since 2009, but it did not take the internet by storm until around 2017, when it surpassed $18,000 per Bitcoin. More recently, PayPal has allowed for the use of cryptocurrency, such as Bitcoin, as a payment method. Crypto, as it is called colloquially, is known to follow the “network effect,” when more people become involved, the value also increases, which allows for an ever-growing uphill trend for users and value. 

But, just like any stock, cryptocurrency can have major deficits, as Bitcoin suffered from a 4% drop on Jan. 24, 2022, recording 50% below their all time high. The same can be said for Ethereum which had a 7% drop around the same time. 

Cryptocurrency feeds into another “issue” that has taken over the internet, which is non-fungible tokens, also known as NFTs. These forms of virtual “art” are sold and traded for hundreds, if not thousands of dollars, and have only been increasing in popularity. People spent over $20 billion on NFTs in 2021 alone and if NFTs follow the trend they are on now, that amount will more than likely continue to increase. 

The potential for profit off of both NFTs and crypto is great, but like many things, there is a huge cost that many seem to not notice: the drastic environmental impact coupled with the idea that critics believe crypto is having a negative impact on the banking system.  

Everything crypto, including NFTs, functions on some form of a blockchain, which is used as a form of security for the data. In hindsight, it is a smart technology to utilize for such valuable data, but the energy output is astronomical. One NFT alone generates 440 pounds of carbon, that is the equivalent of driving 500 miles in a gas-powered car. Bitcoin also has a carbon footprint of 97.14 metric tons, which is comparable to the footprint of the nation of Kuwait. 

Outside of the environmental impact, NFTs come off as pointless besides the simple idea of some profit, but is the profit worth the environmental damage?  All an NFT is, is a piece of artwork that is said to be protected when in reality all it would take is a screenshot for someone else to pretend it is theirs. There are people who are now also screenshotting an assortment of things, as far as Twitch profiles, and selling them as NFTs, when the profile is not even theirs in the first place. 

For Bitcoin, or similar cryptocurrencies, while they can be used in some mediums now as payment, their unpredictability and once again, environmental impact, is something that outweighs the potential profit. 

Crypto may seem appealing at the surface and a great way to invest, but the risk of losing thousands and aiding in producing more carbon than a whole country, all for a piece of data or virtual artwork, seems mundane.