Cryptocurrency

Introduction

Cryptocurrencies have become the hype over these past few years, especially after the price of Bitcoin rose significantly back in December 2017. Since this massive success and popularity, things have changed. The market has expanded and now sees even the smallest and least experienced investors participating in it. Crypto isn’t just what we call “online money”, it is also what is known as online business transactions, without which banks cannot function as they mostly rely on these transactions and have now moved their business totally online so that it is more accessible.

What is Crypto?

Crypto currency is a medium of exchange created and stored electronically in the blockchain, using encryption techniques to control the creation of monetary units and to verify the transfer of funds. Bitcoin is the best-known example. It is a decentralised structure, meaning it can be bought, sold and exchanged without the use of an intermediary such as a bank. Satoshi Nakamoto, Bitcoin’s developer, first described the necessity for an “electronic payment system based on cryptographic proof rather than trust.

Buying Cryptocurrency

Most bitcoin and other crypto purchases are made through cryptocurrency exchanges. One may buy, sell and hold cryptocurrencies on exchanges and opening an account is similar to opening a brokerage account in that you must authenticate your identity card and offer funding source such as a bank account or debit card. You need a cryptocurrency wallet to store your crypto currencies in. Because cryptocurrency transactions must be validated by miners, each purchase may take 10 to 20 minutes to appear in the account. (https://www.forbes.com/advisor/investing/what-isbitcoin)

Should one invest in cryptocurrency?

Financial experts often warn that cryptocurrency is one of the riskier investment choices. The cryptocurrency market is a volatile one so there can be dramatic swings in prices. Although it is all the rage right now it is still in its infancy, so the recommendation often given by advisors is to keep it as a ‘side investment’ and not too large a portion of one’s portfolio. (https://www.forbes.com/advisor/investing/what-is-bitcoin)

Cryptocurrency and Money Laundering

Cryptocurrencies are still a long way from matching traditional financial channels. They are nevertheless becoming one of the most popular methods for criminals to gather, store and layer their gains. In many jurisdictions cryptocurrencies are either unregulated or underregulated, thereby allowing financial criminals to operate without restriction. According to blockchain analytics firm Ciphertrace, big crypto thefts and frauds totaled $432 million in the first 4 months of 2021. (https:// www.businessinsider.com/us-investors-reported-52-million-crypto-scamlosses-ftc-q1-2021-6%3famp)

Cryptocurrency in Malta

In order to determine the best place to sustainably mine cryptocurrency, you must first look at the more sustainable countries and whether or not that country can keep up with the large energy demand. Malta, when compared to the rest of the world, is a sustainable country with a value of 70.7 and a cryptocurrency mining index of 54.5. this results in it being ranked as the 44th most sustainable country for cryptocurrency mining. (Refer to appendix A found in reference 5) In Malta, three bills have been published by the government regarding cryptocurrency: The Malta Digital Innovation Authority Bill, The Technology Arrangements and Services Bill and the Virtual Financial Assets Bill. These are still awaiting parliament approval. The latter would regulate cryptocurrency exchanges in and from Malta.