A few years ago, when there was not much talk about cryptocurrencies yet, we considered the possibility of announcing a parody of cryptocurrency for the April draw. It was supposed to be called ThinkCoin and the joke was that all the value associated with it is in the user’s head and there is no software that can support it in the real world.
This, of course, was funny, as it played on the idea that real cryptocurrencies also have no real value. Now you understand that we never seriously thought about entering this space. However, these days, when cryptocurrencies, and more recently NFTs, are attracting incredible attention, we could not even make such a joke, fearing that it would be taken seriously.
Since the discussion around cryptocurrencies has reached such a height, I think it’s time to clarify Vivaldi’s position.
Cryptocurrency – is it a revolution?
Cryptocurrency has been described by many as a currency revolution, the future of investment, and disruptive technology. But if you look beyond the hype, you will find nothing more than a pyramid scheme posing as a currency.
In essence, it is a digital product, but without government support or the support of the banking system. Claiming to be the new digital currency of the internet, cryptocurrencies promise decentralization and freedom from governments.
Each cryptocurrency usually follows a standard recipe, guaranteeing its holders wealth, a legitimate way to distribute the currency, and some story about how it differs from everyone else.
But since cryptocurrencies are too volatile to be used as a real currency, people see them as a kind of investment scheme. The problem is that in order to extract real money from the system, you need to find someone who is willing to buy the tokens that you own. And this is possible only as long as they believe that they can sell them to someone who will pay even more for them.
If at some point you stop finding people willing to buy these tokens only on the promise that they will be worth more in the future, the whole scheme may collapse, and the value of all tokens will fall to zero.
Cryptocurrency energy consumption is another serious problem. The energy costs of generating just one bitcoin are amazing – they are comparable to the electricity consumption of some countries. And this figure is likely to continue to grow as the technology behind it does not scale and cannot scale in any reasonable way.
For obvious reasons, this consumption of energy is not good for the environment, since this energy could be spent on more reasonable needs. This is also true for renewable energy, as it can be used to replace fossil fuels in other areas.
While many of us are struggling to reduce our carbon footprint, it seems counterproductive to indulge in technology that undoes all that hard work.
What stage are we at
At the time of writing (January 2022), there are over 8,000 cryptocurrencies. Compare that to the world’s 180 real currencies that can be used as legal tender.
The most confusing thing about this cryptocurrencies craze is that it is still unclear if there is any real use case for them or a reasonable way to value them. Without this, the cryptocurrency turns into a very difficult slot machine for those who have extra money.
Nevertheless, despite all the negative moments, there will still be those who decide to take part. And for those who end up owning the crypto tokens they need to manage, the browser might seem like a logical place to keep track of the whole situation. Indeed, some of our competitors have done just that and now provide in-browser crypto wallets.