Here’s the story of the high-flying funny money that flew too close to the sun … and then … .
There are times in life when a moment crystallizes in your mind, and increasingly, at least for me, when you can anticipate when that latest “hot topic,” is about to Jump the Shark.
My father is an astute businessman and longtime savvy investor in many things, however, he is not the guy up to speed on all things new and different. A few months back, he pulled me aside, to apparently share something of great value in confidence. In a near whisper, he offered, “They are going to stop using paper currency sometime soon, probably time to start moving some dollars into that crypto-currency stuff.” At that precise moment, I knew that if Dad was even aware that cryptocurrency existed … that investment bubble was about to burst.
An endless string of coding, mostly zeros and ones … moving toward infinity. In supposedly limited supply, while still being mined and manufactured daily in data centers across the globe. International regulation is all but non-existent, the market is new enough that the federal government is still figuring it out, and extensive passcodes, which can get lost, create intricate access to even your own crypto holdings. Yet, this is a strong enough “free market” that the Trump sons have created a new crypto that has already increased the family fortunes by a few billion.
Cryptocurrency miners run computers in large warehouses on racks at top speed 24/7, which consume huge amounts of electricity as well as water to keep those computers running cool. Those collective data farms are currently comparable to the domestic energy consumption of Norway. A single data center has roughly the same energy footprint as 250,000 American homes.
That electricity can’t all come from sustainable sources, meaning that the industry is also a net polluter. And whether your cryptocurrency of choice is Bitcoin, Luna, Ethereum, or some lesser-known e-currency, they all share one thing in common at present. After hitting peak prices in 2021, their values are all down substantially. Several smaller Crypto currencies have ceased operations, leaving their investors holding the bag. In fact, the only part of the e-currency industry operating solidly in the black are the e-currency exchanges. They each make a small commission whether prices are going up, or down.
The Federal Trade Commission (FTC) also reports that more than 46,000 Americans have been stung by Crypto scams since January 2021, as many still believe the myths of rapid wealth, much more than current market dynamics. And of course, crypto boosters will tell you that all markets are cyclic and that their pricing and value will recover. For those crypto cheerleaders, I have five words for you to ponder: Electro-magnetic pulse and black-outs.
Yes, the more reliable cryptocurrencies and data mining farms do have onsite backup generators … but even fail-safes fail. Who knew that the Kryptonite for high-flying cryptocurrencies might be a combination of green energy policy and sporadic and unpredictable power outages? Innovation can still save or turn any industry apparently heading for a quick exit or downturn. And again, I am no expert, but perhaps add an endless string of XXXs to all of those zeroes and ones … those certainly seemed to have worked out quite well for the porn industry.
