It has been a while since we last discussed cryptocurrency. The last time I spoke about it was when a government gazette was published in South Africa, stating that cryptocurrency assets are now recognized as financial products. We explored whether or not Zimbabwe could be next. A bit later on, we discussed some latest NFT developments. This was all in the last quarter of 2022. Today let us look at some of the current cryptocurrency developments worth noting. For the most part, cryptocurrency chatter has been relatively mild lately. Nonetheless, there are developments we can explore.
Spate Of Cryptocurrency Controversies
In most of 2022 and leading up to now, there have been several controversies in cryptocurrency. More and more people are beginning to question the authenticity of cryptocurrencies. There have been issues of false or fake celebrity endorsements. For example, there was that time when NFTs initially blew up. One of the driving forces was celebrity endorsements. It emerged that some of them were not quite what they seemed. For instance, imagine a company heavily invested in NFTs. They could pay a celebrity to in turn, purchase an NFT. Thus it was not necessarily the celebrity purchasing it with their own money.
It worked because NFTs trended because of celebrity endorsements. Too many cases of cryptocurrency fraud have occurred as well. One of the most notable ones was the FTX saga. FTX was a cryptocurrency exchange worth US$32 billion at one time that came crashing down. There were also solid indications towards pyramid schemes in cryptocurrency. Several other cryptocurrency companies crashed due to the FTX saga. Generally, there has also been a general plummeting of cryptocurrencies’ values or prices. A number of people have been losing confidence in cryptocurrencies. That could be why it has been a bear market for a while now. There is so much we could have covered here; there is a lot.
Workforces And Investments Shrinking
These two dynamics have also been noteworthy for quite a while now. Many people employed in cryptocurrency spaces have lost jobs lately. Almost close to 5000 employees lost jobs at cryptocurrency companies in 2022. Due to investor confidence issues, investments in cryptocurrency spaces have also been going down. It comes as no surprise when you look at the spat of cryptocurrency controversies. In the final quarter of 2022, investments fell roughly 75 percent from the third quarter.
Cryptocurrency Regulation Is Getting More Concerted
The issue of cryptocurrency regulation has become more topical. Again, it comes as no surprise, given the many issues that have been happening. For instance, the FTX issue has helped fuel authorities’ assertion that cryptocurrency regulation is needed. Both cryptocurrencies and cryptocurrency exchanges are now heavily scrutinized by authorities.
Power Implications Of Cryptocurrency Mining – A Huge Concern
Another area that has been raising regulatory issues is power consumption (sustainability). The tussle between proof of work and proof of stake rages on (the latter consumes less power). I will not detail the technical aspects. Just know that for any cryptocurrency transaction to occur, it needs either proof of work or proof of stake. Traditionally proof of work has always been standard. However, Ethereum has now shifted to proof of stake. This has incredibly reduced its power consumption. Bitcoin still uses proof of work, and it consumes loads of power.
Putting it into perspective – the power an average home uses in a month is what one Bitcoin transaction needs. No wonder cryptocurrency mining is getting banned in some places. In Zimbabwe, the RBZ still shows interest in regulating cryptocurrencies. RBZ recently rolled out a consumer survey regarding a central bank digital currency. It has been open for anyone interested to participate by completing the online survey. These are just some examples to show that cryptocurrency regulation is getting more concerted.
Big Tech Companies Offering Crypto Convenience
The other exciting development is that of big technology companies offering cryptocurrency convenience. I am referring to big technology companies like Google, Twitter, and the like. They have been incorporating features on their platforms that are cryptocurrency-related. For instance, Twitter shows charts if you search for a particular cryptocurrency. For example, let us suppose you want to find out the current value of ETH (Ethereum). You go to Twitter, enter ETH in the search bar, and then press the search button. It will show a chart showing how Eth’s value has been in the last 24 hours. For Bitcoin, you enter BTC and repeat the same process; you will also see the chart. This was a big nod to crypto as Twitter added the function for US Stocks and ETFs at the same time.
Another exciting development is that Google allows ETH balance checking via Google Searches. This means you can enter your ETH address in the Google search bar. When you press search, it will show you how much is there for that address. That Google feature was announced around October 2022. It is also interesting to note that starting this year, Google will be accepting cryptocurrency as a payment method for their cloud-based services.
Those are some of the current cryptocurrency developments worth noting. Despite the controversies and waning confidence in some, others remain hopeful. Some even believe the value of Bitcoin will rise again to where it used to be. What we cannot ignore, though, is that cryptocurrencies are highly volatile. If ever you want to invest in cryptocurrencies, be vigilant. The issue of regulation of cryptocurrencies and cryptocurrency exchanges is topical. After all, cryptocurrencies are based on being decentralized as their unique selling point (USP). Thus, you begin to wonder if cryptocurrencies are or can ever be decentralized. There is much to discuss, and you can also add your comments below.