Bitcoin and cryptocurrency prices have skyrocketed over the past year, fueling renewed interest in the digital asset space as traders and investors stack up.
Subscribe now to Forbes CryptoAsset & Blockchain Advisor and discover new NFT and crypto blockbusters ready to earn 1000%‘
The price of bitcoin is now trading at just under $ 60,000, down from less than $ 20,000 at the same time last year, with optimistic investors predicting the price of bitcoin, as well as the price of some cryptocurrencies. smaller, will continue to climb.
Before the latest price spike – propelling the bitcoin and crypto market to around $ 3 trillion from a low of $ 150 billion in 2020 – the new German Chancellor Olaf Scholz warned of a “style bubble” tulip ”developing in the crypto market – adding“ the currency monopoly ”must remain in“ state hands ”.
sign up now for free CryptoCodex—A daily newsletter for the crypto-curious. Help you understand the world of bitcoin and crypto, every day of the week
“I would doubt that [bitcoin and cryptocurrencies have] no prospect as a currency model, ”Scholz said in 2018, it was reported by Reuters and translated into English by Google. “There is a great danger that this will become tulip inflation,” Scholz added, referring to the famous tulip bubble that began in the 17th century in Amsterdam.
Scholz, who is expected to lead Germany’s efforts to transition to a green economy, also warned of how the decentralized bitcoin network is kept energy-intensive.
The Bitcoin network would consume nearly 200 terawatt-hours of electricity per year, according to the University of Cambridge’s Bitcoin Electricity Consumption Index, which is comparable to Thailand’s electricity consumption. Earlier this month, Swedish authorities called on the European Union to ban the creation and maintenance of the energy-intensive bitcoin and cryptocurrency network, a process known as mining.
More recently, Scholz criticized Facebook’s plan to launch a bitcoin-inspired cryptocurrency, calling changes made by the social network to address regulators’ concerns as “cosmetic”.
“I do not support private sector digital currencies,” he said in November last year, adding: “We must do everything possible to ensure that the currency monopoly remains in the hands of states. “.
CryptoCodex—A free daily newsletter for crypto-curious people
Other world leaders have also warned of the growing use of bitcoin and cryptocurrency.
Last week, Hillary Clinton, the former U.S. presidential candidate and Secretary of State to President Barack Obama, said the rise of bitcoin and cryptocurrencies could undermine the reserve currency status of the U.S. dollar.
“What looks like a very interesting and somewhat exotic effort to literally mine new coins to trade with them has the potential to undermine currencies, undermine the dollar’s role as a reserve currency, destabilize nations. , maybe starting with the small ones, but goes much further, ”Clinton said, speaking at a panel discussion at the Bloomberg New Economy Forum in Singapore, and adding that she hopes “nation states will begin to pay more attention to the rise of cryptocurrency.”