Etc Coin: A Good Investment Or Not?

Cryptocurrencies are digital or virtual currencies that use cryptographic systems to secure and verify transactions. They are generally not issued or regulated by central authorities, making them theoretically immune to government interference. One of the most popular cryptocurrencies is Bitcoin, which has experienced significant price volatility, reaching an all-time high of over $70,000 in March 2024. So, is investing in cryptocurrencies like Bitcoin a good idea? Well, that depends on a variety of factors, including your risk tolerance, investment goals, and the specific cryptocurrency in question.

ETC coin's volatility

ETC Coin Volatility

Volatility is a significant concern for investors considering ETC coins. This volatility is driven by several factors, including greed, the fear of missing out, investor speculation, and overall market sentiment.

Historical Volatility

ETC coins have experienced high volatility in the past. On May 19, 2021, its price plunged by nearly 30%, and it fell over 60% from November 2021 to May 2022. In 2022, a year that was generally bad for stocks with the S&P 500 plunging around 19%, ETC coins lost over 60% of their value.

Market Sentiment

Market sentiment and investor psychology play a crucial role in the volatility of ETC coins. When the market is bullish, and investors are fearful of missing out, the price of ETC coins can surge. On the other hand, during bearish periods, the price can take a significant tumble.

Investor Speculation

ETC coins are often subject to investor speculation, with investors hoping for short-term price fluctuations and quick profits. This speculative nature adds to the volatility of the coins.

Supply and Demand

The limited supply of ETC coins, similar to Bitcoin, can also contribute to price volatility. As demand increases and supply remains restricted, the price can fluctuate significantly.

Regulatory Environment

The regulatory environment for cryptocurrencies can also impact their volatility. A sudden regulatory crackdown or changes in government policies can affect the market sentiment and cause price volatility.

While ETC coins have exhibited high volatility in the past, it's important to remember that volatility can cut both ways. Investors need to carefully consider their risk tolerance and conduct thorough research before investing in volatile assets like ETC coins.

Its use for payments

One of the biggest criticisms of bitcoin is that it doesn't work for payments. Critics argue that it takes too long to process a single bitcoin transaction. In contrast, credit card transactions take seconds to process and settle. Bitcoin also has high energy requirements, with more energy needed to run bitcoin than to power the entire country of Poland.

However, bitcoin supporters argue that it is already more efficient than credit cards. While credit card transactions are processed in seconds, they take days to officially settle, whereas bitcoin transactions are finalized in an average of 10 minutes. Third-party solutions are also solving the inefficiency problem. For example, bitcoin payments can be processed in milliseconds through the Lightning Network.

Bitcoin is also more divisible than fiat currencies. One bitcoin can be divided into up to eight decimal places, with units called satoshis. This makes it easier to use for smaller transactions.

Another advantage of bitcoin is its decentralized nature. It can be used across borders, allowing any consumer with an internet connection to participate in the global economy and access financial services. This makes it especially useful for remittances, or money transfers across borders.

Finally, bitcoin's public ledger system, or blockchain, can make illegal activity easier to spot. As digital forensics departments improve, it may become more difficult for criminals to use cryptocurrencies.

Environmental concerns

While blockchain and cryptocurrencies are touted as a way to put control of money into the hands of the people, they have a large environmental impact. Bitcoin and other proof-of-work cryptocurrencies require large amounts of energy—more than is used by some small countries—to perform the work associated with crypto mining. The energy intensity of crypto mining is a feature, not a bug. The transaction validation process is designed to use large amounts of energy—the network depends on the computational power of thousands of computers. This dependency maintains the security of cryptocurrency blockchains that use proof-of-work consensus.

The largest country for Bitcoin mining is the United States, which accounts for more than one-third of Bitcoin mining activities. Researchers at the University of Cambridge report that the US, China, and Kazakhstan are responsible for around 71% of the world's Bitcoin mining. As a result, three countries heavily dependent on fossil fuels are the biggest miners.

The amount of energy needed for each transaction is enormous in comparison to traditional credit cards: each Mastercard transaction is estimated to use just 0.0006 kWh (kilowatt hours), while every Bitcoin transaction consumes 980 kWh, enough to power an average Canadian home for more than three weeks, according to some commentators.

The traditional financial systems, of which only credit card energy use is available, use about as much energy as a non-proof-of-work blockchain. The Cambridge Bitcoin Electricity Consumption (CBEC) Index estimates that Bitcoin uses an estimated 151 terawatt-hours (TWh) of electricity annually (0.59% of global electricity use)—more than Ukraine, using the latest country energy estimates from 2022. Another estimate placed the figure at about 98 terawatt-hours, or around 435.61 kilowatt-hours of electricity per transaction.

Cryptocurrency mining also generates significant electronic waste, as mining hardware quickly becomes obsolete. According to Digiconomist, the Bitcoin network generated about 10.52 kilotons (annualized) as of August 2024.

Due to the heat generated by mining machines, miners, manufacturers, and maintainers have turned to water cooling to reduce the costs of keeping equipment cool. In some cases, large mining farms have discharged hot or warm water into lakes or other water bodies, raising concerns about raising the average temperature of or contaminating these bodies.

The cryptocurrency sector provides valuable opportunities and benefits, but has major, overlooked environmental impacts. Bitcoin, the most popular cryptocurrency, has concerning impacts on climate, water, and land. A 400% increase in Bitcoin’s price from 2021 to 2022 triggered a 140% increase in the energy consumption of the worldwide Bitcoin mining network.

The UN scientists make a range of recommendations regarding possible interventions by governments to monitor and mitigate the environmental impacts of cryptocurrencies. They also suggest investment in other types of digital currencies that are more efficient in terms of energy use and less harmful to the environment.

Its use by criminals

Cryptocurrency's decentralised nature, immunity to government intervention, and the anonymity it offers make it an attractive target for criminal use.

One of the most prominent examples of its criminal use is the recent conviction of Remy Ra St. Felix, a 24-year-old Florida man who led a group of men behind a violent crime spree designed to steal victims' cryptocurrency savings. St. Felix and his accomplices broke into homes, physically assaulted victims, and used torture tactics such as inserting sharp objects under victims' fingernails and burning them with hot irons to coerce them into transferring their crypto holdings.

In another case, three individuals, Sam Lee, Rodney Burton, and Brenda Chunga, were charged with orchestrating a $1.89 billion cryptocurrency fraud scheme through HyperFund, an online investment platform. They offered investment contracts with false claims of substantial returns from non-existent cryptocurrency mining operations.

Additionally, Anatoly Legkodymov, the founder and majority owner of the cryptocurrency exchange Bitzlato, was arrested for operating a money transmitting business that transported and transmitted illicit funds, failing to meet U.S. regulatory safeguards, including anti-money laundering requirements. Bitzlato became a haven for criminal proceeds and funds intended for narcotics, stolen financial information, fraudulent identification documents, money laundering, and ransomware.

The anonymous nature of cryptocurrency transactions, the lack of central authority, and the ease of cross-border transfers make it a preferred medium for criminal activities. However, it is important to note that the absence of traditional financial intermediaries and the public nature of blockchain technology can also aid in tracking and identifying criminal activities.

Its real value

One of the biggest criticisms of Bitcoin is that it's not backed by any meaningful value. Advocates argue that its value lies in its scarcity—there will only ever be 21 million bitcoins in existence. However, critics say that scarcity alone is not enough to justify its value. Some detractors even go so far as to say that Bitcoin is essentially a Ponzi scheme, with its price inflated by hype.

Proponents of Bitcoin believe that its value comes from the fact that it's decentralized. This means it can't be controlled by a single government, central bank, or company, protecting it from both inflation and dictators. They believe this feature will make it revolutionary.

Bitcoin also demonstrates the attributes of a currency. It functions as a store of value and a unit of exchange, and it has a restricted supply and increasing demand. It is divisible, portable, durable, and uniform.

Bitcoin has value because it can be exchanged for and used in place of fiat currency. It maintains a high exchange rate because it is in demand by investors interested in the possibility of returns.

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