It takes Bretton Woods for Bitcoin

On September 7, El Salvador decided to adopt Bitcoin as the state currency. According to observers, the denouncers move above all because of the amateurish nature of the process required by the government. But amid enthusiasm and protests, other countries are discussing it. The reason is said: from 2016 to today, the number of people trading crypto-assets – crypto-digital goods and services – has increased by 587% and the market capitalization has exceeded $2 trillion. Virtual currencies have become nearly 6000 and applications for managing them are among the most downloaded on the web.

Ordinary people are now using cryptocurrencies for the most diverse purposes and governments around the world are looking for solutions to allow orderly and beneficial development to create new business models. With a possible setback: China and the United States are in dialogue to ban cryptocurrencies that are considered a threat to the global financial system. A topic on which they do not have a final and unanimous position.

When Bitcoin on October 5 crossed the psychological threshold of $50,000 (today it exceeded $60,000) and returned to Salvadoran advertising values, a report from Bank of America changed the cards: Analysts responsible for a written report that “the chances may be greater than they expect.” skeptics”.

In any case, banning cryptocurrencies would be a difficult outcome to achieve due to the nature of the blockchain and Cryptocurrency Living thanks to her, but in the meantime China’s central bank led to request a Requests Banning its production and dissemination.

But the problems do not end there for the digital world born of the creativity of Satoshi Nakamoto, who wanted an electronic currency to revolutionize the world of global exchanges.

On September 23, a cyber attack caused the website to be hacked replacing Entire site with promising fraudulent free bitcoins. This has already happened with the hacking of the Twitter profiles of Gates and Obama, but every day there are scams and complaints related to the cryptocurrency market. In August, there was a theft of $600 million worth of bitcoins, partially returned, more than $400 million that hit Japan’s Mt.Gox exchange in 2014. What’s going on?

digital theft

It happens that while thieves used to steal gold, cash and jewelry, today they are stealing cryptographic codes that represent virtual currencies. Thus, crypto malware, scams and social media scams multiply to get private keys and open their wallets, the virtual wallets that contain digital currencies.

But first it so happened that someone stole the computers needed to create bitcoins, the digital currency par excellence. Since this currency was not “minted” by banks or central bodies, but thanks to an algorithm residing on a computer through Mining, a complex set of mathematical calculations, Whoever wanted to steal it, stole the computing power to produce it.

It happened in 2018 in Iceland, and the blame was attributed to the unfaithful guard of one money farmA virtual coin factory from which 600 graphics cards and other hardware needed to mine cryptocurrency disappeared overnight. Then find out who the authors are more than one And the thefts were different.

Unverified sources claimed that these machines ended up in China where someone thought of getting rich by creating cryptocurrency by taking advantage of weak regulation and low energy cost in the country. Today, in 2021, everyone is fleeing the Chinese central bank’s decision to ban cryptocurrencies and the path is reversed. Cryptocurrency companies are trying to bring their hardware back to the West, to the United States, Canada and Scandinavia. Shipping costs, which have tripled with the pandemic, make it inexpensive to return graphics cards and crypto-mining equipment to containers by sea as it is still profitable to produce them. For this reason, companies that run money farms aim to “undermine” cryptocurrencies to countries in the Caucasus where energy is cheap, and to create partnerships with nuclear power plants that They are unable to sell their energy stocks.

How are bitcoins produced?

Let’s explain it better. The process of issuing new bitcoins is called “mining” for similarity to gold mining but it is actually a process that uses the computing power of computers to process transactions on the blockchain, securing the network. And keeping all operations in sync in an open source system that records them with equal or peer-to-peer logic. Bitcoin production is a side effect of this process, which is actually the reward.

Unlike gold mining, bitcoin production is a kind of reward in exchange for useful services for making a secure payment network, the reason why bitcoin was invented, and that’s why it will be necessary anyway even after the last bitcoin has been mined.

However, miners who only want this digital gold, indifferent to the functionality of the exchange network, decide whether or not to mine it when it is appropriate: if the bitcoin price is low and mining costs are high, they can stop doing it. That is why it operates according to the logic of scale and coins in countries where the cold climate and low cost of energy make it profitable.

Just to give an example and understand, if mining bitcoin costs $8000 and its exchange value is 11,000, it might be worth it, but if it is more expensive, who is paying the bills for the process everyone considers energy-intensive for the amount of electricity you use?

star prices

However, in recent months, Bitcoin and all other cryptocurrencies have been on a whirlpool in terms of value, with prices rising and falling according to market trends influenced by political and economic events. This will continue to happen.

In recent years, we have seen an amazing increase in the number of existing cryptocurrencies, with around 6000 counted, with bitcoin and ether at the top. But what is astonishing is the increases in the market value of Bitcoin. Today, one bitcoin is worth $63,000 after peaking at roughly $65,000 in the middle July era from around 30 thousand dollars. In short, not bad for a coin whose initial value was determined based on the cost of two pizzas with tomato sauce.

Behind these price increases have been commercial and speculative decisions – think Elon Musk’s hesitation about the possibility of buying his own Tesla with cryptocurrency – but also United Nations reports highlighting how they are being used by cybercriminals based in Iran and Russia to pay for cyber attacks. Or money laundering and financing of North Korea’s Kim Jong Un’s nuclear program.

Finally, with ransomware attacks booming today, the demand for ransom in electronic money made by self-proclaimed hackers against companies, countries and organizations in order to “free” encrypted data with their ransomware has led many to believe that “perhaps without cryptocurrency there would be no This thriving illegal market exists,” famous cybersecurity expert Bruce Schneier told Italian Tech.

However, there are many NGOs that fight for privacy such as Electronic Frontier Foundation And against corruption WikiLeaks Who accept bitcoin donations for justice and transparency without knowing.

Utopia Satoshi Nakamoto, the alleged inventor of Bitcoin – whoever it is, a fictional person, a government body or a group of aliens – to create a payment system frictionless Among peers to circumvent central bank assumptions, for now it appears “unstoppable,” even if an English court orders the removal of the white paper authorizing the birth process. deBitcoin and signed by Satoshi Nakamoto, at the request of Craig Wright, the person who has repeatedly claimed to be the inventor.

In any case, cryptocurrencies are changing the world and for this reason they are monitored by all supervisory bodies, so much so that on October 1, during a conference in Cagliari, the head of our company CONSOBProfessor Paolo Savona said that it was time to think about a new Bretton Woods agreement to address the problems posed by cryptocurrencies globally, as “cryptocurrencies create purchasing power and affect consumption, investments, exports and imports and has it become a matter of conflict between states and the easing of international, economic and political cooperation, on the Precisely when the need for stock market management increases, it moves into the information field.”

Leave a Comment