The price of bitcoin, the leading digital currency, is falling. While bitcoin is not alone, and Ripple is plunging at a faster pace, BTC remains the poster child of cryptocurrencies and it gets special attention.
Power usage by bitcoin miners has been an issue for a long time. While in Quebec, the province has spare capacity for electricity that is based on renewable energy, this isn’t the case in many other places. While the electricity consumption of bitcoin mining is huge, it isn’t making a lot of transactions.
1 – High power usage brings in real power
Already now, it takes a lot of time to confirm a transaction and fees are not that cheap. If bitcoin transactions reached the volume of major credit card companies like VISA, mining would consume the power output of the whole planet.
And power as in electricity isn’t the only power issue. The growing use of electricity by Chinese BTC miners, the authorities are showing their real power. China has reportedly ordered an “orderly exit” out of bitcoin mining. The country is showing its power in face of high power usage.
2 – Crackdown on crypto-exchanges
Authorities in South Korea are also muscling up: a ban on exchanges has been proposed as the Asian nation has got into a “crypto-craze”. A lot of people have jumped into trading digital coins and have become addicted. The government weighs in.
While some public outcry may delay the new measures, the direction is clear: the government in Seoul does not want this trade to get out of control.
3 – Abusing power and artificial prices
And bitcoin also suffers from an abuse of power or at least suffered from such back in 2013. According to a new report, the jump in BTC/USD back a few years ago on Mt. Gox was manipulated and was part of a scheme by the company to cover up a huge theft of coins.
The company went bust but the artificial rise in the price was real and had a lasting impact. Manipulations in the prices of small stocks are not uncommon. A low trading volume may result in extraordinary moves. But perhaps even now, when BTC trading is huge, the price is still inflated by the artificial moves from back then.
Will bitcoin continue falling?
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