The state-level regulations and community advocates will play an important role in reigning in the Bitcoin industry. In Michigan, Rick Rainey, owner of Forge Cellars on the eastern shore of Lake Michigan, has taken the initiative to fight against the Bitcoin industry. While the state has not enacted any laws regarding the use of bitcoin, Rainey has seen a rise in demand for the digital currency. He says that the bitcoin industry is growing rapidly and is putting the economy at risk.
Impact of bitcoin mining on environment
The environment is a major concern when it comes to bitcoin mining, and the carbon footprint associated with it is huge. It is estimated that mining for bitcoin requires over two-hundred and twenty-five kilowatt-hours of electricity per transaction – enough to power the average US household for over 78 days. Mining bitcoin also has negative effects on wildlife. Nevertheless, the industry has been growing and is set to continue.
Cryptomining facilities often produce large amounts of electronic waste, including toxic materials. These chemicals can leach into groundwater and are released into the air. Many of these pollutants are affecting people not directly profiting from the cryptocurrency industry. The energy consumed by cryptocurrency mining can negatively impact the reliability of the electric grid and contribute to the massive e-waste produced by these facilities. Furthermore, the high demand for new computers can exacerbate shortages of other devices, such as water.
Lack of regulation
The SEC has expressed interest in the bitcoin industry and is considering new regulations. The agency will look into how cryptocurrency markets operate, whether there is market manipulation or not, as well as the basic rights of amateur investors. Other lawmakers in Congress have also proposed new rules for cryptocurrency. The Senate tucked in a provision that would toughen tax enforcement on cryptocurrency players, although the House has not weighed in on the issue. A lack of regulation in the bitcoin industry is a concern for many investors and professionals, and the S.E.C. has urged its members to adopt new rules and regulations.
Regulators are not willing to go as far as Coinbase in limiting exchanges to only a handful of platforms. But some argue that regulation could help in the long run and add an extra level of investor protection. Still, regulation needs to be reasonable and not hinder legitimate projects. While stricter regulation could hurt cryptocurrency prices in the short term, it could help in weeding out bad actors and promote trust. And while it would not guarantee safety, regulation will help protect investors and create a better ecosystem.
Despite the high-profile debate over bitcoin’s potential to overtake traditional financial institutions, the prospect of state-level regulation of the bitcoin industry remains a possibility. New York’s BitLicense scheme has received a lot of criticism, but it does have a valid point: virtual currency operators are not subject to the same regulatory framework as traditional money transmitters. Indeed, the NY State Assembly is considering replacing BitLicense with a more innovation-friendly regulation. Many states are trying to enact their own regulations for crypto operators.
In June 2017, the state of Nevada enacted Assembly Bill No. 398, a bill requiring the state to study blockchain technology, cryptocurrencies, and cryptocurrency exchanges. It also requires the state to review its statutory authority to regulate Fintech firms (nonbank companies that use cryptography to manage financial transactions).
As Bitcoin became the monetary standard of choice, the traditional educational system was disrupted. Instead of endless government spending, this new currency was taxed without inflation. While this resulted in a loss of public funding for many state-operated institutions, the quality of traditional academic infrastructure remained high. While many teachers left the industry, others suffered layoffs or furloughs. In response, some institutions were audited using Bitcoin.
In the Bitcoin world, students leveraged their sovereignty over time. Peer pressure, which in traditional high school situations often resulted in feelings of violence and false senses of value for the winners, never fully dissipated. However, the students had an easier time interacting with people outside their social circle. The result was a more equal playing field for the entire community. However, the new world of Bitcoin did not come without its challenges.