A group of environmental groups launched a campaign Monday to change bitcoins code in order to reduce the energy use. This has been a significant effort over the past few years.
Bitcoin is a popular investment, but its energy consumption has alarmed lawmakers and riled environmental groups. This has put the cryptocurrency at odds to a green movement that has some support on Wall Street. The new campaign is designed to convince everyone involved with bitcoin, from software developers to investors to mining companies, that a change in policy would be better for the environment as well as bitcoin’s reputation and support.
Greenpeace USA, Environmental Working Group, and others will place ads in media outlets like the
New York Times,
Politico and The Wall Street Journal highlight bitcoin’s environmental impact and advocate for change. Ripple cofounders fund the campaign
Chris Larsen
This is the first time that a cryptocurrency firm has been represented by a person other than Mr. Larsen. Mr. Larsen claimed he provided $5 Million.
Some ads are targeted at prominent bitcoin backers such as
Tesla Inc.
Chief Executive
Elon Musk,
Block Inc.
Founding founder
Jack Dorsey
Fidelity Investments Chief executive
Abby Johnson.
The campaign is not anti-bitcoin.
Michael Brune,
The campaign is being advised by the former executive director at the Sierra Club. He said that the campaign argues that climate change is at a critical point and bitcoin, which is the most valuable cryptocurrency by market capitalization, is contributing too heavily to global warming.
It is crucial for anyone in a position that can act to do so, he stated. It is impossible to ignore the fact that we are in a severe climate emergency.
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The goal is to persuade the bitcoin community of investors, backers to change their networks code. This would remove the proof of work mechanism that forces bitcoin miners to use a certain amount energy while processing transactions to earn rewards for newly created bitcoin. According to Mr. Brune the change could significantly reduce bitcoins energy consumption.
Bitcoin’s energy consumption is a defense mechanism to protect the network. It is open-source software, so anyone can use it. The network requires miners, who must expend a lot of computing power, to make it cost-prohibitive for anyone to take over the network. This could allow them create counterfeit bitcoins or erase transactions.
According to the Cambridge Centre for Alternative Finance, bitcoin uses slightly more energy per year (134.9 terawatts) than Norway (124.3 terawatts). The research institute claimed that bitcoin uses less energy per year than the U.S. for electricity transmission.
Some bitcoin miners have taken steps to address the problem by using more renewable energy sources to run their computers. However, Messrs. Brune & Larsen believe that this is not enough.
Although bitcoin’s environmental impacts have been a problem for years, the people who control it have rejected the proposed changes. Because bitcoin is not owned by any company, it is difficult to change the code. It requires almost all parties involved in its maintenance, which can be as high as 90%, to agree on a change.
The proof of work model is still used by the Ethereum network. However, the Ethereum network is moving to proof of stake which basically swaps energy for cryptocurrency. This change, which was delayed several times due to technical issues, is expected reduce Ethereum’s electricity consumption by 99%. The campaign aims to make a similar switch in bitcoin.
Paul Vigna can be reached at [email protected]
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