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Some people, including Elon Musk, have criticized digital currency for using too much energy.
ELIZABETHTOWN, Pennsylvania. As cryptocurrency and Bitcoin gain popularity, some people are concerned about the environmental impact they could have.
To understand how a digital currency could cause environmental problems, you must first understand how it is collected, or in this case, how it is mined digitally.
Bitcoin mining, essentially, is about finding these solutions to mathematical problems, Dr Dmitriy Krichevskiy told Fox43. Krichevskiy is Associate Professor of Economics at Elizabethtown College. But the reason the number of, what bitcoins say is limited, is because these issues are getting more and more complex.
Essentially, there is a finite amount of Bitcoin available. And as the amount gets smaller and smaller, it takes more and more computer power and energy to crack the codes to get the Bitcoin.
People have warehouses full of this and they are running 24/7 and they are just trying to solve these problems in order to get a bitcoin.
According to a study from the University of Cambridge, Bitcoin consumes more energy than the Netherlands or the Philippines.
This has sparked concern from some companies and entrepreneurs, including Elon Musk, who tweeted in May that Tesla would stop accepting bitcoin until mining transactions use more sustainable energy.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
– Elon Musk (@elonmusk) May 12, 2021
And that’s not just a problem with Bitcoin, but with any digital cryptocurrency. If designed correctly, currency will become more scarce when it is in high demand, and therefore it will need more energy to be mined.
Krichevskiy says that cryptocurrency can solve many problems of traditional money because there is a limited amount of it and because transactions occur on an open ledger. However, the currency is very volatile and, since it is an international currency, it is difficult to track and regulate.
He thinks governments are likely to start trying to regulate it, whether for fiscal reasons or the environmental concerns that go with it.
This is a unique thing in the world, a unique beneficial thing in the world, and a unique problem in the world too, so watch how it evolves.
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