Bitcoin and Blockchain were big news a couple of years ago, but the excitement has calmed down a lot and now the price of Bitcoin is down to almost 25% of what it was a few years ago.
The boom and bust were like the Tulip Rush back in the days, as people invested in something popular, but that had little practical use and intrinsic value. When the economic environment changed, and the buzz died down, this led to people questioning what the value of Bitcoin was, and led to a massive drop in the price of Bitcoin.
Blockchain is the Future
Blockchain is likely an essential part of the future. Unfortunately, a lot of people still do not understand what Blockchain is and what it is for. This lack of understanding, combined with fears over the way that certain ‘altcoins’ such as Tether work, and worries about market manipulation, are leading to a lot of controversies.
Bitcoin has come under fire because environmentalists believe that it is too much of an energy hog. Computationally, running the Blockchain is expensive. This means that it burns a lot of electricity that could be better used elsewhere, or even not used at all. As countries are collectively trying to reduce their carbon footprints, it is becoming increasingly important for them to avoid wasting energy, and campaigners are criticizing Bitcoin as a significant climate threat. It uses as much CO2 per year as 1 million transatlantic flights. That’s hard to ignore.
Solving the Scaling Problem
There are some options for improving the energy consumption of different currencies. Ethereum is looking at moving to Proof of Stake as a way of reducing energy use. However, they have been talking about that for a long time, and they have encountered several roadblocks along the way. Sharding has proven to be more complicated than was previously expected, running nodes has proven expensive, and people have taken more interest than expected in stake pooling.
Proof of stake systems tend to work well when there are only a few hundred nodes but Ethereum operates on a much bigger scale, and that’s harder to manage. However, the way that Ethereum and other currencies work now has its flaws, and as the network gets more prominent, they have struggled with scaling.
Is Now a Good Time to Invest?
Now that the buzz is over, Bitcoin’s prices have somewhat stabilized. They are still volatile, but not as bad as they once were. So, is now a good time to invest? There are some who would say that yes, it is. Investing in Bitcoin is a gamble, just like investing in anything else is a gamble.
However, the technology has been through the boom and bust period that the Internet went through and is now slowly trundling on towards maturity. Educated investors would do well to look at the emerging altcoins because one of them could take the crown the way Facebook ousted MySpace in the social space. Now is the time for patience, research, and caution. Find more on this post!