On May 12, tech mogul and Tesla CEO Elon Musk announced on Twitter that the electric vehicle company would no longer accept Bitcoin for purchases, citing concerns over fossil fuels powering bitcoin mining.
Within two hours, the price of one bitcoin dropped over $6,000. As of May 21**, it’s valued nearly $17,000 lower than it was before Musk’s tweet. And with that, concerns over crypto’s environmental impact reached a general public barely aware of what Bitcoin even is.
But what is it about cryptocurrencies that make them so damaging to the environment, and are they inherently harmful? To answer those questions, one must first understand how cryptocurrencies work.
Cryptocurrencies, like traditional currencies, rely on a record of transactions — a ledger — to ensure everyone has the amount of money they say they have. What makes cryptocurrencies different is that instead of a financial institution (such as a bank) storing and updating that ledger, a cryptocurrency’s ledger is shared and verified by the public in an