There is ever-more fevered speculation about when the crypto-craze is going to hit a wall.
Ethereum has risen 3,500% this year; Bitcoin is $8000, up more than 600% since January. Will they climb further? The bad news is that the power needs of miners have risen 43% just since October. The global drain on electricity networks of mining cryptos is now 28 terawatt-hours a year, whereas anything above 19 cents/KWH makes mining unprofitable. We’re in a sweet spot just now as the price of Bitcoin goes up and makes power relatively cheaper. But when the rate goes down as further coins are mined, that process will go into hard reverse, unless Bitcoin continues its relentless climb in value.
Citigroup estimates that, “even as bitcoin approaches $8,000, the price required for mining to be marginally profitable may reach a jaw-dropping $300,000 to $1.5 million by 2022”. Could Bitcoin balance its energy consumption with market value? $400,000 as a possibility has already been quoted.
On the other hand, Bitcoin Gold can be hashed on desktops with greater relative efficiency than on specialised ASICS and none of the energy costs. This doesn’t mean Bitcoin has reached its apogee. In fact, more and more, opinion is regarding it as the new digital gold, and anticipating an influx of institutional money and a burgeoning market in crypto futures and shorts as the Ethereum-Bitcoin ecology develops.
It’s also been mooted (inevitably) that millennials prefer crypto. Here’s a tip to save a lot of time and maybe money, too: those who drone on about millennials (“What many people don’t realize is, this wouldn’t be happening if millennials trusted the financial institutions currently in place.”) should be soundly ignored. There is no such thing as millennials. There is only the young, who do what the young always do, and will then grow older and do what everyone else does. Interest in Bitcoin and Ethereum is increasing by region and sector, not age demographic. That’s why the blockchain is here to stay.