- 1 The crypto sector witnessed a significant decline after the SEC’s crackdown on major exchanges.
- 2 Experts believe crypto mining is a major contributor to climate change.
The cryptocurrency market is getting a lot of criticism here and now. From general citizens to regulatory authorities, digital assets are struggling after a couple of heavyweight cratering last year to stay in the global economic arena. A Letter to the Editor submitted to Billings Gazette—a daily newspaper in Billings, Montana—by a denizen, slams crypto assets as a disaster.
Montana Senators Ignoring The Truth About Crypto?
According to Verve W. House, a former Montana State University economist, “Montana State Sens. Shane Morigeau and Daniel Zolnikov will regret their SB 178, which promotes cryptocurrency mining in Montana. They ignore the truth: cryptocurrency is a disaster. It wastes huge quantities of electricity and the resources that produce it. It makes economies less stable. It ties up courts and government agencies in bankruptcies and legal suits.”
State Bill 178, signed by Governor Greg Gianforte, prevents penalties on miners. Mr. House highlighted the works of Molly White, a Wikipedia site administrator, and crypto critic, for a ‘running look at the action.’ The letter especially emphasizes over-power consumption via crypto mining activities. He suggested tribes selling hydroelectric power for mining be paid in United States Dollars (USD).
Bitcoin (BTC) has, by far, delivered the highest incentives to crypto miners. Since its inception, the cryptocurrency has provided them with mouth-watering profits. On the other hand, experts believe these activities are a major contributor to climate change. Data from Rocky Mountain Institute, an environment-focused research organization, the crowned cryptocurrency can consume 127 TWh annually.
Difficult Survival Ahead For Crypto Miners
Energy input is an essential element to keep the Bitcoin blockchain awake and free from malicious actors. Currently, the U.S. accounts for a lion’s share of the crypto asset’s hash rate at 35.4%, followed by Kazakhstan with 18.1%. In November 2021, the year the crypto market was trading at its peak, Reuters reported the latter struggled to meet energy demands for crypto mining. Moreover, both nations benefited from China’s clampdown on cryptocurrency miners.
However, miners’ revenue has suffered in the past few months considering the significant decline in the market amid the tightening regulatory landscape and collapse of ecosystems including LUNA and FTX. JP Morgan, an American multinational financial institution, anticipates mining costs may rise to around $40K after the upcoming BTC halving.
If so, crypto miners with higher production cost may witness challenging survival shortly. Decreasing energy prices or an upsurge in Bitcoin price might be an ideal situation for the miners to survive. As of now, cheap energy appears as the only avenue for them to follow. But then again, environmental soldiers won’t allow them to thrive.
To counter the environmental impact, however, Tether, USDT stablecoin issuer, has announced an initiative in Uruguay and poured a Billion dollars into El Salvador’s Volcano Energy Park for Bitcoin mining.
The sector experienced a major decline after Gary Gensler, Securities and Exchange Commission (SEC) chair, called Coinbase, the second-largest crypto exchange, as “an unregistered national securities exchange, broker, and clearing agency.” Bitcoin was currently changing hands at $25,939, down by almost 3% at the publication time, while Ethereum (ETH) lost over 6% during the period.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.