As every successful trader will say, the only proven way to enhance your profits is by investing. Now, the main question here is about which market to pick because while some prefer real estate, others believe more in the stock market, and for many years, these two markets were at the top and people’s favorite to-go option. Of course, much has changed today because a new player is in town, and yes, we are talking about the crypto exchange one as it is probably the market with the highest growth in both the number of investments and overall capital invested in the past few years.
What can we expect from cryptocurrencies?
When it all started, only a few people really understood how it works, what cryptos are, and saw a bigger picture. As time passed, people started more and more to realize the benefits of this new system. Even though it entirely changed the way we perceive money and our financial system overall, by looking at the facts, we can clearly see that cryptos are something that will stay with us for quite some time and surely mark our future. On the other hand, as people started believing more in this type of digital assets, due to still being unaware of what the blockchain technology is, how digital wallets work, and how come there is no third party involvement, many new questions arose.
The infamous crypto volatility
In addition to this, another big factor and reason why some people are still hesitant to invest in cryptos is the volatility. Namely, the volatility is both the reason why you can gather such big profits so fast and how you can lose the money due to a sudden value drop. Like with any other type of investment, volatility represents a risk, and the higher that risk is, the more money you can make in a short time.
It is as simple as that, but volatility should not play such a big role in your decision-making anymore as what every expert will agree with is that the price of BTC, for example, can only go up. The only thing needed is to do some research, keep up with the latest news in this field, and actively participate in the market, as by doing so, nothing would surprise you, and it will surely reduce the losses in the long term.
Now, when we have settled that, we can focus on a new question, a new problem that many overlooked, but the one that our financial future depends on, and here, we are talking about cryptos sustainability.
What is sustainability?
First of all, we need to explain what sustainability is because it is the only way to understand better why it is important for us. When we speak about cryptos and their sustainability, we need to mention that it depends on a few factors, and each is equally important. Regarding that, these aspects are financial, environmental, economical, and ethical and every change in each of them affects cryptos and their sustainability in a good or bad way.
The main issue when it comes to cryptos and the main reason why many people think that these digital currencies are not sustainable is the amount of energy used for their mining.
Many of them believe that mining requires enormous amounts of electrical energy, which affects our environment and causes many problems now, and it will cause even more in the future. But is it really true?
How much energy do cryptos really consume?
It is true that crypto mining requires a lot of energy and that it affects our environment, but compared to other currencies we have used for so many years, cryptos are more eco-friendly than any other. Speaking about electric energy, the amount of it needed for mining really is huge, but on the other side, it represents only 40% of the amount that is necessary for bank systems and their operation. That makes cryptos already more sustainable than other currencies, and there is even a way to improve it and use less energy in the future.
How can cryptos become more sustainable in the future?
Mining does not only require a lot of energy, but we also need to think about powerful machines that would be able to perform it, and buying them is not cheap. We are speaking about proof-of-work, which is still the most popular way of mining, but luckily there is a less energy-consuming alternative that is expected to become more used in the near future. That alternative is proof-of-stake, and unlike the proof-of-work, it does not require extremely powerful machines and a lot of energy to get the reward. When it comes to proof-of-work, only one winner of a computational race is rewarded, and getting the desired reward can last a lot and require a lot of energy.
On the other side, proof-of-stake is a completely different mechanism that randomly selects nodes to participate in the blockchain, and the chances to be chosen by a system can be increased by paying a higher deposit. Deposit is an important part, and it is necessary because it represents the way to avoid fraud and trying to trick the system, which is never a good idea since being caught leads to losing the deposit and even being forbidden to use the blockchain again.
Proof-of-stake requires only one percent of the energy that proof-of-work uses to make a transaction, which drastically changes how it all works. Because of that, more transactions could be performed per second with less energy needed for that. It is the reason why many digital currencies use this method, and it is expected that it will be even more popular in the future.
The bottom line
Cryptocurrencies and digital assets, in general, are something we cannot plan our future without, and even though some still predict the crash of cryptos, even if the value of some coins drops, the entire system will prevail. It means that the only thing to worry about right now is picking which coin to invest in and which official Bitcoin prime app to use for crypto trades.