Emerging Technologies: Cryptocurrency
What is cryptocurrency?
This time on Emerging Technologies, we will talk about cryptocurrency or crypto for short. Governments and central banks usually create and regulate currency. Currency has no inherent value—we only consider it precious because we can exchange it for other goods and services like food, housing or clothing. In essence, the value of a currency is intrinsic. Currencies of different countries have different worths. This is a result of different currencies having different supplies and demands in the international market. For instance, as of June 2022, 1 USD is worth about 200 PKR.
Crypto is similar to a regular currency in many ways. We can trade it, it has a value and we can exchange it for other things. However, cryptocurrency, like Bitcoin, is not regulated or controlled centrally. Rather, blockchain technology and distributed ledgers control and manage cryptocurrency transactions. Moreover, crypto is not physical, but rather digital. People ‘mine’ crypto through computers. Moreover, it is very secure and scammers cannot counterfeit it.
Experts suggest that cryptocurrency might completely alter how we value money and carry out transactions. Nonetheless, many people are wary of it and the changes it might introduce. Pakistan, amongst many other nations, has been considering a ban on cryptocurrency. To better understand why people support or discourage its use, let us take a look at its pros and cons.
Crypto is far more liquid and accessible than regular currency as it only exists digitally. Thus, we can transfer it across borders in just a few minutes. We can also mine, trade or transfer it round the clock, without the need of a bank or stock market to act as an intermediary. Furthermore, due to the lack of central authority, crypto is not taxed like regular currency would be. This lack also allows traders to take big risks and reap big rewards.
Due to blockchain technology, crypto is incredibly secure and anonymous. All users have unique numerical codes that hackers cannot trace back, and only they have information regarding how much currency they currently hold. Also, as blockchain utilizes several computers around the globe, no hacker can break into the currency to steal your data. Cryptocurrency is as safe as Fort Knox. Maybe even more.
While some consider crypto’s unregulated, high-risk nature can be an advantage, it can also often be a disadvantage. Cryptocurrency is highly volatile and can peak and crash in a matter of minutes. Just earlier this year, the Luna currency crashed in a matter of minutes, costing investors billions of dollars. Moreover, while these crashes might be terrible news for the vast majority of investors, a few, high-volume investors often benefit. This causes an overall upward flow of money, causing the rich to get richer and exacerbating inequality.
As crypto is not backed by a bank or government, all transactions are permanent and there is nothing to do in case of a scam. In addition, if one loses their private crypto key, they can potentially lose all of their money. Newer cryptocurrency traders are much more susceptible to scams, phishing and losses.
Cryptocurrency is also bad for the environment. In a previous blog post, we discussed climate change. In short, it is the change in global weather patterns due to human activity—mainly the burning of fossil fuels and deforestation. Mining crypto is a very energy-intensive process, as large computer networks have to run 24/7 to do the process. Bitcoin mining alone consumes more electricity than some countries. This puts a huge energy strain on the world, and we have to burn more fossil fuels to meet these needs.
Cryptocurrency and STEAM
By studying cryptocurrency, STEAM students can better understand how technology is changing finance. Like Artificial Intelligence and automation, crypto is set to have major impacts on how we work and trade, and governments will eventually come around to making more laws regarding cryptocurrency.
LearnOBots aims to bring the future of education to learning, and crypto will change the future. We offer courses in coding and robotics, so kids can understand how computing works. From there, children can also develop their interest in blockchain technologies, and even NFTs. We also offer DIY Kits for firsthand experience, and our STEAM Camps impart practical skills and technological knowledge. If you are interested in our camps, sign up! For stay-at-home learning, we also provide LearnOSteam, an online platform where children can learn through playing games and interacting with friends.
In the next blog of Emerging Technologies, get ready for a discussion on quantum computing.