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Cryptocurrencies war on dollar

by Shola Ogunniyi
crypto war on dollar

Cryptocurrencies are becoming a constant assault on the USD and all other fiat currencies (including my dear Naira). Interestingly, Coinbase, Binance and all are making a case for digital currencies (aka cryptos) and a win for Coinbase as demonstrated in the recent IPO in the USA is a win for bitcoin and all other altcoins.

Previously, Central banks around the globe were banning and prohibiting cryptos, unfortunately, it’s a lost cause. They may seem to be winning the war, but they are losing the battle. A prohibition by the Nigerian CBN did not yield the desired result as p2p trading  jumped up by over 28% since it was prohibited and the directive got a lot of media attention and made more citizens to be aware of crypto, seek to understand and traded in it. (Some sort of negative marketing for the apex house).

The advert of cryptocurrencies and blockchain was received as a joke, but 10 years on, the market capitalization of these digital assets hovers around $1.5B, and it is sending a strong signal that it’s a force to reckon with. Unfortunately, the cost of verifying transactions still pretty high for the premium and trusted tokens, but there is hope on the horizon as several blockchain projects are working on fixing this bug and hopefully, technologies like ADA, MATIC and HOLO would crack the puzzle of scalability and affordability in terms of transaction fees.

Another concern is with carbon footprint. Cryptocurrencies require 0.1% of world energy to power 0.00001% of global finance this huge lacuna is a challenge to climate change and also threatens the mass adoption of digital currencies. It is believed that 1 Bitcoin transaction has a carbon footprint equivalent to watching 88,000 hours of YouTube. Interestingly, Micheal Saylor argues that this isn’t totally trues as the world generates 160,000 TWh of power yearly and 50,000TWh is wasted, bitcoin mining consumes 120TWh and hence reduces the energy waste. Unfortunately, Tesla is not buying this position and it is no longer news that Tesla will not be accepting Bitcoin for it’s car purchase, but it’s CEO, Elon Musk revealed lately that Tesla did not sell any of the Bitcoin it purchased and are considering accepting Bitcoin back once the power used for mining these assets become sustainable. 

At the peak of price rally, the world’s No. 2 cryptocurrency hit a market cap of $321 billion — overtaking PayPal, Toyota, Exxon Mobil and even Comcast. Unfortunately, these feet weren’t sustained for long as the concern of Elon Musk, around decentralization and sustainable mining came to bear when China imposed a law to ban cryptocurrency trading and related activities in China. Many see China’s position as a move to pave the wave for its state-owned digital yuan, while some even opined that China will regret this position in a few years down the line.

It is intriguing, that U.S. customers on Coinbase can now use their PayPal accounts to buy cryptocurrencies. Big tech companies have created enormous value. However, regulatory concerns and decentralization are still show stoppers for crypto to stand tall with the fiat cousins.

In closing, John Connally Jr., Richard Nixon’s treasury secretary, put it in 1971, “the dollar is our currency, but it is your [every other nation’s] problem.” Unfortunately, The US Federal Reserve, is losing ground as the defector trading currency and its being continually challenged structurally. China has announced its own cryptocurrency, Japan is trailing closely behind and interestingly, the Nigerian Apex bank as reclined his previous position and promised to commence test run of e-Naira come October 2021.

The discussions and new debate would be which cryptocurrency either; CBDC, BITCOIN or Altcoins will reign supreme on the global stage against the Dollar is the coming years? Let’s pull a seat, buy some coins and enjoy the movie.


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