The most exciting thing about cryptocurrency investments is that when they explode, they skyrocket in value. In 2021, we saw Solana (SOL -1.55%) increase by more than 10,000%. Meme token Shiba Inu (SHIB 7.43%) shot up more than 40,000,000%.

KEY POINTS

Bitcoin boosters like to claim Bitcoin, and other cryptocurrencies, are becoming mainstream. There’s a good reason to want people to believe this.

A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment. A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded funds, insurance, forward contracts, swaps, options, gambles,\[1] many types of over-the-counter and derivative products, and futures contracts.

Concerns about Bitcoin's environmental effects relate the network's energy consumption to carbon emissions.\[41]\[42] The difficulty of translating energy consumption into carbon emissions is due to the way bitcoin mining is distributed, making it difficult for researchers to identify miner's location and electricity use. The results of studies into Bitcoin's carbon footprint vary.\[10]\[11]\[13] Per a study published in Finance Research Letters in 2021, the differences in underlying assumptions and variation in the coverage of time periods and forecast horizons have led to Bitcoin carbon footprint estimates spanning from 1.2–5.2 Mt CO2 to 130.50 Mt CO2 per year.\[43] According to studies published in Joule and American Chemical Society in 2019, Bitcoin's annual energy consumption results in annual carbon emission ranging from 17\[44] to 22.9 MtCO2 which is comparable to the level of emissions of countries as Jordan and Sri Lanka.\[13]

The environmental effects of Bitcoin are considerable. One such environmental effect is that it worsens climate change.\[1] This is because bitcoins are made using electricity partially generated by gas and coal-fired power plants. When burned, coal and natural gas emit greenhouse gases, which heat the Earth and change the climate.\[2] As of 2022, such bitcoin mining is estimated to be responsible for 0.1% of world greenhouse gas emissions.\[3] A second environmental effect is the air pollution caused by coal-fired electricity generation, and a third is the e-waste due to the short life expectancy of bitcoin-mining equipment.\[1]

An actual bitcoin transaction including the fee from a web-based cryptocurrency exchange to a hardware wallet

Криптографія з метою конфіденційних платежів почала використовуватися з 1990 року в системі DigiCash Девіда Чома, компанія якого збанкрутувала в 1998 році. Однак, його платіжна система була централізованою, а вперше термін «криптовалюта» почав використовуватися після появи пірингової платіжної системи Bitcoin, яка була розроблена в 2009 році людиною або групою осіб під псевдонімом Сатосі Накамото і використовує хешування SHA-256 і систему proof-of-work.