Will negative impact of blockchain pop Bitcoin bubble? The crypto space has seen a lot of developments in the past couple of years and more and more new products are introduced into the market every day.
Apart from crypto coins you can also trade options, futures contracts, and now there are the Bitcoin ETF futures contracts.
This has increased the interests among people with the prospects and potential of these crypto products and to earn more profits some way or the other.
All these growing interests among the people have created a Bitcoin bubble that is likely to burst soon.
However, blockchain technology, the backbone of cryptocurrencies, has caused some serious negative impacts with its operation, especially to the environment.
Irrespective of this fact, more and more people are getting attracted to crypto trading, investing and mining which is even aggravating the condition and causing irreparable damage to the climate.
It is only when the investors and traders realize the negative impact that this technology has caused to the climate that the Bitcoin bubble will burst, along with other relevant causes for it as well.
This particular article deals with the reasons that have created the Bitcoin bubble as well as the consequences of the technology behind cryptocurrencies which is consuming the natural resources of this world at a rapid pace.
However, as far as the bursting of the crypto bubble is concerned, nothing can be said for sure as of now.
Even the crypto experts and market analysts are not sure about it though all are very concerned about the negative impact created by blockchain technology.
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Will the Negative Impact of Blockchain Pop Bitcoin Bubble?
There seems to be a distinct divide between the users and critics of crypto regarding the Bitcoin bubble and its short-term and long-term effects.
While some of them say that it is unlikely that the crypto bubble will burst, there are some other users who think that it can quite possibly happen sometime in the near future.
And, when you consider the negative impacts of crypto on the environment, you must understand that the crypto market is open all through the day for seven days a week and 365 days a year.
Therefore, there is no limit to the amount of transactions that can be made by the crypto users on different trading platforms.
With the excessive buying or selling of Bitcoin and other crypto coins all over the world, the adverse effects of it on the world will be even more pronounced.
Apart from the traditional crypto coins and crypto futures and options that are already quite popular among the users, you must also consider the meme stock phenomenon in order to understand the effects all these have on the climate.
Therefore, people have to understand this fact which will restrain them from getting excessively involved in crypto trading which will cause the bubble to burst.
Referring back to the meme stocks which are essentially sentiment plays, Bitcoin in particular is perhaps the biggest of all sentiment plays right at this moment.
And, sentiments can make everything possible in the short term.
Just as it can increase the involvement of people in the crypto space, it can also deter them from it which will help burst the Bitcoin bubble.
It is just a matter of belief which the regulators and the environmentalists need to play with.
Influence of Important Personalities
The influence of celebrities and prominent personalities will also play a significant role in reducing the impact of blockchain technology on the climate.
Their actions and even their comments on social media channels like Twitter can influence the general people significantly to regulate their crypto transactions and go ahead with it more responsibly.
They are the ones who can seriously contribute to saving the climate with reduced participation of the people in crypto space.
For example, you may remember what kind of impact the crypto space had when Elon Musk gave Bitcoin a huge boost by purchasing Bitcoin worth $1.5 billion.
Also, Tesla announced that they would accept this particular crypto coin as a payment mode for their vehicles.
Later on, Elon Musk recognized the negative effect the blockchain technology had on the climate while processing each of these transactions.
The most significant downside of it is that it consumes a huge, if not incredible, amount of electricity.
The reversal of Elon Musk or Tesla was well appreciated by the people but at the same time the Bitcoin investors thought it was enough for a re-evaluation of their decisions to invest in Bitcoin.
As a result, it induced a decline in the investment volume, amount, as well as the price of Bitcoin.
Demand for Bitcoin Transactions
The climate change issue associated with blockchain technology in general, and Bitcoin in particular, is a primary reason that the Bitcoin bubble may burst.
However, for that the enormous demand for Bitcoin transaction processing needs to be looked into seriously.
Today Bitcoin has become the elementary fact of life and therefore most of the crypto investors generally turn a blind eye to the adverse climatic effect.
It is quite natural that they all want to make the most out of the volatile nature of Bitcoin price at any cost, even if it is the climate.
Until and unless they realize what harm they are doing to the world and the people at large, they will not abstain from such activities.
Discussing China’s Viewpoint
Now, finally, it is time to discuss this particular matter from the perspective of China and their firm decision to ban mining, transactions and holding all types of cryptocurrencies by any banks in the country.
However, China did not discourage the use of blockchain technology in other fields, but not for crypto.
This is considered to be a very bold thing to do by the Chinese government because China, at that particular point in time when the ban was imposed by the government, was a country where most of the Bitcoin processing, mining in particular, took place.
However, the Chinese government was more concerned about the negative effects such mining activities had on the climate and was well determined to combat it at any cost to stop or reduce climate change.
They thought that Bitcoin mining was incompatible with their efforts to repair the damages done to the climate already.
They had some good reasons to substantiate their move as well.
First of all, when it comes to the challenges of dealing with the changes in the climate due to blockchain technology that are already quite pronounced, the country did not need it which will not only aggravate the situation but will also deplete the already scarce electrical resources of the country.
Secondly, with reference to the scarce electrical resources and the continual search for an alternative renewable energy, supporting cryptocurrency will only pull them back from combating climate change but also from encouraging people to use renewable energy if they do not practice it themselves.
And thirdly, there are already lots of different types of digital currencies available in the crypto space with the number growing continuously.
Not all of these digital currencies need the blockchain technology to operate or need excessively high energy.
If proper competition can be ensured among different technologies then it will surely bring out some more efficient solutions, they thought.
The Chinese government is right in almost all of these three points.
These signify one significant point which is that there is a lot of senselessness involved in using blockchain technology for Bitcoin and other crypto coin transactions and mining.
This not only causes a serious negative impact to the climate but also drives the price of Bitcoin up which creates a Bitcoin bubble, and both of these are quite unnecessary.
However, some crypto experts think that the second reason given by the Chinese government does not seem to be a very strong one.
This is because there are several other cheaper and better ways in which the attention of the people can be gained to deal with the challenges and negative impacts on the climate and its changes.
Nevertheless, in spite of the little bit of disagreement with these reasons, there is no doubt that the negative impact on the climate due to blockchain technology used in processing Bitcoin transactions and mining is a serious issue.
And, it is only when the investors and the people at large understand it, it will be easy to burst the Bitcoin bubble.
However, for that the strong existence of sentiment of the people should be dealt with more profanely.
Otherwise, people will continue to invest in and transact with Bitcoin which will mean that the use of blockchain technology will not be minimized.
Conclusion
It is pretty hard to say when the Bitcoin bubble will burst but it needs to happen sooner than later.
The best way to bring about it is to make the people aware of the negative impacts of blockchain so that it reduces the use of this technology.
I have special interest in crypto and intend to help common people to gain knowledge about the digital asset as well as its potential. Follow Me at Linkedin.
