On May 12, Tesla CEO Elon Musk announced on Twitter that the company would suspend the use of Bitcoin in vehicle purchases. Musk cited concerns with the fossil fuel emissions of the mining process as the reason behind the decision.
Although Musk’s announcement came as a surprise given his history of support for Bitcoin, the sustainability issues of the cryptocurrency and other forms of decentralized digital currencies have been widely documented by scientists and researchers for years. And with the recent boom of non-fungible tokens (NFTs), unique digital assets supported by cryptocurrency blockchains like Ethereum, concerns about crypto’s environmental impact have only increased.
On the surface, it may seem unlikely that digital currencies would have significant carbon footprints. But cryptocurrency mining, the process that adds new units of crypto into circulation, is highly carbon intensive –– the entire Bitcoin network consumes more energy than many countries do annually. And as climate change continues to be a major threat, cryptocurrencies’ wastefulness is an increasing cause for concern, according to financial economist Alex De Vries.
