Tag Archives: bitcoin

Gen Z and Cryptocurrency

Cryptocurrency has, in the past twelve years, completely revolutionized the financial industry. Millions of people from all over the world have started looking into and invest in digital currency, and even more impressively, a high percentage of them are including cryptocurrency into their financial plans for the future. 

Gen Z and Cryptocurrency
Gen Z and Cryptocurrency

For those not in the know, cryptocurrency is a form of digital currency which relies on cryptography and blockchains to provide proof of ownership, and make it nearly impossible to counterfeit. Most cryptocurrencies are decentralized, which means they are not under the authority of any bank system or central authority. This means that purchases made with cryptocurrency are not beholden to banking fees, allowing for greater user autonomy.  

The most popular cryptocurrencies on the current market are Ethereum (ETC), which is worth over $2000, the stablecoin Tether, which is worth $1, Litecoin (LTC) worth $132, and of course, the most respected, first, and highly-priced cryptocurrency, Bitcoin (BTC) worth over $30,000 on the current market. 

Cryptocurrencies can be bought and sold on apps or sites called crypto trading sites. They provide a user-friendly interface, place importance on security, safety, and anonymity, and employ brand new artificial intelligence technology to predict market fluctuations and maximize the profits of their users and investors. All these benefits mean that these apps make crypto trading a lot easier, and newbie friendly.

It is perhaps for this reason, that in recent years, it has been shown that younger and younger people are more readily using trading sites, like the ones found here, that have proven successful with hundreds of users who vouch for its success.  

Younger Generations and Cryptocurrency

As stated, there has been a noticeable increase in the amount of young people willing to invest in cryptocurrency and other digital assets, like NFTs. Surveys have shown that millennials and Gen Z are far more trusting of cryptocurrency, and all the technologies and developments associated with it than previous generations.

A survey done recently showed that nearly half of millennial millionaires have a quarter of their wealth invested in Bitcoin and cryptocurrencies, despite the volatility of the market. Furthermore, it is estimated that a large number of them also own non-fungible tokens as well. Some of these young millionaires owe their entire wealth to crypto trading and investing as well. This information has resulted in a massive shift in wealth management, as private banks and brokers are learning to appeal to a clientele of crypto users.  

The question that arises then is, what sparked this interest in cryptocurrency and crypto trading among the younger generations of today? The answer is simple. Many young people who have the means to invest have simply lost faith in more traditional investment methods. As with most young people, the younger generations of today value independence, individuality and would prefer to rely on their own research and knowledge, than depend on legacy firms, financial advisers, and other, more traditional institutions. 

The Future of Cryptocurrency

However, it isn’t just Gen Z and millennials who are embracing cryptocurrencies. Studies show that the percent of adults in the US who own Bitcoin is 17%, with that number increasing when including different cryptocurrencies in the mix. Not only that, but three-fourths of Americans admit to having an interest in Bitcoin, and other cryptocurrencies, and a willingness to learn more about the phenomenon sweeping the world. 

On top of individual interest in Bitcoin increasing, an increasing number of companies are opting to accept Bitcoin, and other cryptocurrencies as viable payment methods. Starbucks, Paypal, Whole Foods, Home Depot, etc. are just a few of the many companies who have decided to accept payments made with cryptocurrency. This decision bodes well for the future of the crypto market. 

With all of this in mind, the increasing interest in cryptocurrency among both older and newer generations, not to mention the disillusionment with orthodox investment paths, the future of cryptocurrency and crypto trading seems bright indeed. This reflects in the price increases in the most popular cryptocurrencies in the past few years.

Some Final Thoughts

The cryptocurrency market is booming in 2022. Thanks to the embracing of cryptocurrency by popular culture and media, many more people are discovering what it actually means to invest in the crypto market. And with Gen Z-ers just entering their adult years, they are the prime audience for investing in cryptocurrency.

There is a bit of trouble here as well. Surveys have shown that Gen Z-ers are more eco-conscious than any other generation before them. So, many of them say they would invest in crypto, if crypto was a bit greener. Lucky for those people, some strides are being made in the crypto world in an attempt to make cryptocurrency more echo friendly. Hopefully, by 2025, the damaging effects crypto has will be completely eliminated. 

The Not-so Green Side of Cryptocurrency – How Sustainable are Assets Such as Bitcoin?

The sustainability of Bitcoin (BTC) and similar crypto-assets has been under immense scrutiny of late, with Tesla CEO Elon Musk having made this a key talking point during the summer.

More specifically, Musk (who had previously invested heavily in BTC) spoke negatively about the asset’s lack of sustainability, announcing that Tesla would stop accepting the digital currency as payment for vehicles until “here’s confirmation of reasonable (~50%) clean energy usage by miners” with a positive future trend.

But just how sustainable is BTC’s mining process, and have miners already started to meet Musk’s demands? Here’s a breakdown of the current situation:

What Sustainability Issues Affect Crypto Assets? 

The mining process associated with BTC and similar crypto-assets is central to their decentralised nature, with secure and immutable transactions verified by “miners” who trying to solve mathematically complex problems.

Miners who successfully solve a particular issue essentially add a “block” to BTC’s underlying blockchain, while also receiving a real-time reward in the form of a finite number of coins (6.25).

This represents a tangible reward for the miner’s efforts, while the process itself is how new tokens are generated and introduced into circulation. At present, there are 18,821,387.00 BTC tokens currently in circulation, from a maximum supply of 21,000,000.

However, the complexity of each individual mathematical puzzle is incredibly high, requiring miners to invest in expensive hardware and consume large amounts of electricity when verifying blocks.

According to estimates from the University of Cambridge Bitcoin Electricity Consumption Index, the global BTC network currently consumes around 89 terawatt-hours of electricity annually.

This equates to the annual output of 23 coal-fired power plants, or close to what is consumed by the citizens of Finland on an annual basis.

Just How Sustainable are Cryptocurrencies?

These statistics make for stark reading, and they seem to highlight an inherent lack of sustainability in the crypto space while supporting Elon Musk’s demand for less energy-intensive mining processes.

However, many people have countered Musk’s claim, particularly his call for a greater emphasis on so-called “clean energy”.

More specifically, the Cambridge Centre for Alternative Finance estimates that 76% of all miners now use renewable energy sources as part of their mix. What’s more, CoinShares suggests that the total share of renewables in crypto mining is as high as 73%, while this percentage continues to inch higher on an annual basis.

Not only this, but second and third-generation blockchains have also introduced “Proof-of-Stake” (PoS) consensus algorithms to verify transactions and introduce new blocks.

This is diametrically opposed to BTC’s “Proof-of-Work” (PoW) model, which requires far higher levels of energy and is less sustainable over time.

So, there’s no doubt that people misunderstand just how sustainable crypto mining has become in recent times, and the consensus algorithms that are now widely used to minimise energy consumption.

Of course, there are also far less energy-intensive investment vehicles such as forex trading, so traders who are interested in building a sustainable portfolio have a number of viable options in the modern age.

Why is the Crypto Market so Volatile?

In many ways, the cryptocurrency market is a bundle of contradictions, with this borne out by the space’s current and historical capitalisation values.

More specifically, while the current crypto market capitalisation value of $1.39 trillion may appear impressive at first glance, we should remember that this number peaked above $2 trillion as recently as Bitcoin’s (BTC’s) price broke through the $60,000 barrier in mid-April.

This highlights the innate volatility that underpins the crypto space, but what causes this and how will this impact on the asset class going forward?

What are Cryptocurrency Assets so Volatile?

A further examination of Bitcoin’s recent price trajectory further highlights the volatility of the crypto space, particularly with BTC having achieved a record high valuation of $63,246.79 on April 16th, 2021.

To provide further context, a single BTC token was priced at just $29,333.61 on New Years’ Day, while it has subsequently fallen back to $33,117.75 as of July 24th.

So, having seen its price increase by more than 100% during Q1 of this year, BTC has shelved nearly 50% of its value in the three months since April 16th.

But what exactly is behind this volatility? Well, the main factor here is market sentiment and the varying perceptions of cryptocurrency (and especially BTC) as a viable store of value, while price points are also impacted by Bitcoin’s reputation as a method of value transfer.

In terms of the former, this refers to the ease with which an underlying asset can be useful in the future, either as a sellable item or a method of exchange.

These factors have played a key role in BTC’s rise and fall recently, as demand soared and cryptocurrencies emerged as potential safe-haven assets (which were largely immune from macroeconomic pressures) against the backdrop of the Covid pandemic in 2020.

Similarly, its decline has come as regulators have begun to crack down in China and Europe, while the often unfavourable opinions of influencers like Bill Gates and Elon Musk have undermined the perception of BTC as a store of value.

Is the Future Bright for the Crypto Market?

Of course, it can be argued that the recent crypto bear run simply represents a market correction, while the viability of BTC as an asset class can also be supported by its overall rise in value during the last 12 months.

For example, a BTC token was worth just $9,708.95 on July 26th, 2020, while it’s now priced at $34,014.62. So, despite its wild fluctuation in the intervening period, Bitcoin is now nearly four times more valuable than it was just one year ago.

What’s more, the wider demand remains high for crypto and BTC, especially with forex brokers like Tickmill now introducing digital assets for trading. Given this and the fact that Bitcoin retains a finite supply of 18.77 million, it’s clearly capable of maintaining an inflated price well in excess of $30,000 going forward.

This also increases liquidity and the ease with which BTC can be bought and sold, establishing it as an increasingly mainstream method of value transfer.

On a final note, we should consider the emergence of third-generation blockchains and how they continue to change the crypto marketplace.

More specifically, such networks are tackling long-standing issues like scalability and inflated transaction fees, increasing the likelihood of mainstream adoption rates and potentially minimising volatility in the longer term.

Dreaming of Billions in Bitcoin and Ether & how I started Mining Monero

Bitcoin and Cryptocurrency
Bitcoin and Cryptocurrency

So, I have been experimenting with crypto currency for the last month, it has been an interesting experience from buying (investing) in crypto currency to actually mining currency itself.

In the first instance, I decided to ‘invest’ in £50 worth of Bitcoin. This had followed a frantic year, which had seen the crypto-currency rocket in  value by over 9400%. Being a realist (or a cynic), I was fairly sure the warnings of a burst bubble (or at the very least a plateau) was fairly real, so my investment of £50 was based on the assumption that it was as much as I was prepared to lose if it went pear shaped.

Ether Bitcoin and Monero
Ether Bitcoin and Monero

After a little bit of investigation, I opened a free wallet with a company called Blockchain in Luxembourg. This is where my Bitcoins reside.  It appears to be legitimate and logins require two factor authentication to gain access. After registering the wallet, I was now ready to purchase by Bitcoin. Now at the time of purchase, a Bitcoin was valued at around £12500, so I would need to but a fraction of a Bitcoin with my £50. Fortunately, Bitcoin has smaller divisible units called Satoshi’s, with 100,000,000 Satoshi’s in a Bitcoin. Thus my £50 bought be 402.749 Satoshi… Well actually it didn’t, my £50 turned into £44.69 (after fees!). I was down a fiver already!

As expected, the Porter Curse reared itself and instantaneously Bitcoin stopped rising.

Are you considering investing in bitcoin?

After five days of grumbling to anyone that would listen and deciding that Bitcoin was actually not a great idea, I decided to look at other currencies.

As I was using Blockchain for my wallet, it seemed worthwhile to use that same service to diversify into another currency that would be supported and seamless. In the case of my wallet, the other supported currency was Ether (or Ethereum). This is another cryptocurrency which is traded in the same way as other currencies. I therefore decided after less than a week of investing that it was time to ‘chop’ in some Bitcoin in return for Ether.

After a badly thought out calculation in my head where I was half expecting to split my investment 50/50 I attempted to transact £38.06 of Ether. Now, when transacting any digital currency, you should take notice of the warnings that say “Please note the Bitcoin network is under extreme load, transaction fees are likely to be higher than normal”. Having conveniently ignored this warning, I pressed on and watched as my £38.06 of Bitcoin turned into £21.75 of Ether (after fees). Giving me a wallet value of about £34.00.

So, after less than a week, I was now £16.00 down! Good Start!

At this point, I came to the assumption that the miners were making the money here. Miners (in the sense of a crypto-currency) are the people or machines that run very complex mathematic equations which in turn are used to confirm transactions within the system. Because there is no central bank as such, the network itself if self-governing, thus the people or computers that take part in this job are rewarded with currency of their own. Generally, this is a VERY small amount, but with enormous computing power, these amounts can add up to large amounts.

Thinking of Buying Bitcoin? Here are 10 useful articles to help you make a decision

Having decided that it was perhaps better to leave my ‘investments’ alone, I began looking into mining. Now Bitcoin and Ether are well established ecosystems and thus the computational power needed to mine their currencies has become very large. In fact, so large, that most Bitcoin and Ether mining is now carried out in large data-centres with thousands of custom built systems (or Asics), these have been constructed specifically to mine both Bitcoin or Ether. These data-centres generally exist in Iceland, China or other operations running from very cheap renewable energy sources such as geo-thermal or hydro-electric sources. This effectively puts the mining of both Bitcoin and Ether out of the hands of ‘Joe Public’.

This is not to say that you couldn’t build your own mining ‘rig’ or buy a pre-configured rig, but the cost of constructing it and the low return would mean that simply buying the currency would be a better bet.

Asic Mining Rig
Asic Mining Rig

Fortunately, there are thousands of other crypto-currencies available for mining. With this in mind, I began looking at CPU based mining. CPU based mining basically means that you run a program on your computer which does the mining calculations for you, you generally don’t need specialist equipment, but the returns are sure to be much lower that using an Asic.

After some more investigations, I discovered a crypto-currency called Monero. This was a currency that supported CPU mining, so by simply installing the software on a spare computer, I could be well away. It also seemed sensible to join a mining ‘pool’, this means that rather than mining alone, I would be mining as a collective in a large group of other miners, which speeds up the process and you share the rewards within the group.

I setup an account with Minergate, installed the software on my home iMac and away I went using 3 of the available 4 CPU cores. Now, mining speeds are measured in ‘hash rates’, my iMac was indicating a hash rate of 100h/s (hash calculations per second). In layman’s terms, 100h/s is terrible. Even without including the electricity usage to mine, I was looking at a profit of $9 per month in Monero. Now Monero has a fluctuating exchange rate as do all the other crypto-currencies, so I might be lucky and the currency might rocket like Bitcoin and Ether, more likely it wouldn’t, but the notion of printing digital currency was very appealing.

With this in mind, I began installing the mining software on other devices in my home and work. After a couple of days, I had turned everything into Monero mining systems. My 100h/s iMac was joined by another iMac running at 110h/s and a Macbook Pro running at 200h/s. I then started looking at mobile devices, thus a Sony Xperia XZ1 (39h/s), a Xperia XZ Premium (39h/s) and a HTC One M9 (26h/s) joined the fray. Finally (and inexplicably), I decided to see if a Raspberry Pi2 could manage to mine Monero? Yes, it could, but at a lowly 6.3h/s.

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Thus, my mining rate is around 500h/s, but has displayed at 1200h/s a couple of times. Every day or so, my mined balance is confirmed, this then allows me to draw down this currency to another Monero compatible wallet which again is two factor authenticated.

So, what about my original ‘investment’ of £50? Well, although Bitcoin has only increased 1.5% (at time of writing) since my initial investment, conveniently Ether has increased by 149% and so I have clawed back my losses and now have a wallet with £51.50 in crypto-currency and of course I have the $9 dollars in Monero. However, if I decide to convert this back to Sterling, I will be sure to lose a substantial amount in ‘fees’, so for now I am happy for these funds to stay where they are.

It may be sensible to note that I have actually not made any profit at all so far. Only when I start drawing down a larger amount that I have invested that I will begin to turn a profit and that is a long way off for now.

If you find this article interesting and would like to investigate the world of Monero mining using your computers processor when you aren’t, you can visit Minergate using this link

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