Letters | Why cryptocurrency is a doubly dirty asset
- Cryptocurrency is popular because of its resistance to governance and monitoring, making it attractive to illegal actors
- It also has a massive impact on the environment. It is estimated that bitcoin consumes nearly as much electricity per year as the Netherlands
Adoption of cryptocurrency by Hong Kong as a new avenue of investment isn’t the right way to go.
Cryptocurrency is popular because of its resistance to governance and monitoring. The anonymity of users and the convenience of conversion of digital money into cash using cryptocurrency ATMs or online cashable gambling chips add to the traceability problem.
According to a report by blockchain analysis firm Chainalysis, in 2019, criminals used a cryptocurrency to launder US$2.8 billion. The United Nations notes that money laundering annually amounts to an estimated US$800 billion to US$2 trillion.
Cryptocurrency also has a massive impact on the environment. Cheap sources of power are needed to keep powerful machines operating at full capacity to crack complex algorithmic puzzles and submit random numbers to gain rewards in the form of digital coins.
Due to the above two reasons, cryptocurrency is a doubly dirty currency and should be avoided at all costs unless there are stronger regulations to monitor and halt the above negative impacts.
Avisekh Biswas, Lantau