Cryptocurrency bubble: Insanity of capitalism

microchip, photo: Jon Sullivan/CC (Click to enlarge)

Amnon Cohen, North London Socialist Party

Low interest rates and the declining profit margins of capitalist production have pushed speculators to find new areas to invest their capital. This has created a massive bubble in cryptocurrencies.

In 2010, a bitcoin was worth $0.0008, and a bitcoin could be 'mined' with an ordinary laptop in ten minutes of calculations. Today the same bitcoin is worth $47,000.

This has created a massive industry of 'bitcoin mining farms' - warehouses where hundreds of thousands of servers are crunching through the calculations needed to mine new bitcoins. These farms consume more electricity than the datacentres of Google, Amazon and Microsoft combined, and more power than Argentina, accounting for 0.5% of global electrical carbon emissions.

Elon Musk, whose companies just received $4.9 billion in government green subsidies invested $1.5 billion in bitcoin, sending its price up by thousands of dollars and fuelling the expansion of these bitcoin farms. The expansion of these farms is the reason for the shortage of graphics processing units that they often use.

Under capitalism, vast amounts of power, computer hardware and technical expertise is used to perform socially useless calculations to create these cryptocurrencies, while needlessly boosting carbon emissions. Let's end this insane system and use the technology and resources at our disposal for the benefit of humanity, and not the profits of speculators.

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The coronavirus crisis has laid bare the class character of society in numerous ways. It is making clear to many that it is the working class that keeps society running, not the CEOs of major corporations.

The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

The Socialist Party's material is more vital than ever, so we can continue to report from workers who are fighting for better health and safety measures, against layoffs, for adequate staffing levels, etc.
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