London, UK, Binary News Network, Cryptocurrencies have become the talk of the town. We are witnessing a massive wave of cryptocurrencies being launched every day, catering to the growing needs and preferences of different people. Grand Pacific Trade Broker Mark Schmitt told us that most investors are looking forward to investing in cryptocurrencies that can give them high returns in a short time.
As the preferences of people vary, some cryptocurrencies might not gain sufficient demand or market share to remain stable on the trading platforms. Some other currencies might cease to exist in future as their usage is restricted only to specific regions of the world. Investors need to be very careful while choosing cryptocurrencies because there are more than 1500 coins/tokens listed on the cryptocurrency exchanges and it’s not easy to decide which ones will be successful in future.
Crypto investors need to be cautious as many of the exchanges are not regulated. While purchasing cryptocurrencies, an investor needs to remain extra vigilant as they may become a victim of online theft or hacking, resulting in permanent loss of money. Having said that, it doesn’t mean people should stop investing in cryptocurrencies altogether. It’s true that it’s very hard to predict which cryptocurrency might be profitable right now.
In the market, there are some cryptocurrencies that have been around for a long time and have provided great returns to their investors. One such cryptocurrency is bitcoin. Mr Schmitt said that in the last 5 years, bitcoin has brought a huge return to its investors. It is definitely a great investment opportunity for all those who want to invest in something different and hold it for a longer duration of time. By investing in bitcoin today, you can get good returns in future.
However, it is important to remember that there are risks involved when purchasing cryptocurrencies. The price of all the cryptocurrencies fluctuates very rapidly due to which an investor might not get desired returns or they might incur huge losses by investing in them at the wrong time.
Crypto mining is another way of investing in cryptocurrencies. Crypto mining is a process through which individuals can invest money and get returns over time by using computer power to validate the transaction within the blockchain network. Mining helps validate and secure cryptocurrency transactions as well as create new coins.
Mining is a complicated process that requires advanced infrastructure and technical support to carry out successfully. Mr Schmitt says that mining is not the best way of earning money from cryptocurrencies because you might need a huge capital to invest in infrastructure and earn profits through mining. It is also important to remember that the mining process is very complicated and needs many resources. Mining profitability is also very low for most cryptocurrencies because mining gets difficult with time.
To be specific, mining is a process of solving complex mathematical calculations that need a lot of computational power to get solved. Mining is not just limited to cryptocurrencies but it can be done for various other purposes as well, such as processing scientific data and so on. It requires high-level technical devices and infrastructure to carry it out successfully.
Mr Schmitt thinks mining is an activity not encouraged globally because it requires huge electricity and power consumption. For example, most cryptocurrency mining is carried out where low-cost labour and abundant supply of coal generates electricity at low costs. The climate concerns associated with mining is another growing concern which most people are not aware of. The large electricity requirements are met at the cost of damaging the environment. This is a major reason why many countries have restricted or banned crypto mining as it’s not only damaging the environment but also affecting people living around those areas.
Iran’s stance in winters
Mostafa Rajabi Mashhadi, chairman of the board and managing director of Iran Grid Management Company (Tavanir), announced that the country has decided to shut down mining centres for winters because the mining process requires huge electricity. The country is currently facing an issue of excess energy consumption which needs to be controlled in order to reduce the gap between domestic consumer demand and production capacity.
He also said that Iran has been working on reducing power consumption since last month and this is why they have cut the supply of electricity to crypto farms. He further emphasized the need to reduce consumption and save electricity. It has been reported that after the implementation of this new rule, the country will be able to save 40% energy. Mr Schmitt says that there are many other countries across the globe where crypto mining is carried out but the environmental concerns associated with it are not being taken care of.
Crypto mining farms have already been banned in some other countries because they are being used for illegal activities. He said that countries that have abundant renewable energy sources should use them to their advantage instead of mining cryptocurrencies.
Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.