A group of environmental groups launched a campaign Monday to change bitcoin’s code to decrease energy consumption. This has been a significant effort over the past few decades.
Bitcoin is popular with some investors. However, its energy use has riled some environmental groups and alarmed some lawmakers. This has put the cryptocurrency in conflict with a green movement that still has some supporters 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 and Environmental Working Group will run ads in media outlets, such as the
New York Times,
Politico and The Wall Street Journal highlight the environmental impact of bitcoin and advocate for change. Ripple cofounders fund the campaign
Chris Larsen
Who is not representing the cryptocurrency company in this endeavor? Mr. Larsen stated that he provided $5,000,000.
Some ads are targeted at prominent bitcoin backers such as
Tesla Inc.
Chief Executive
Elon Musk,
Block Inc.
Founder
Jack Dorsey
Fidelity Investments Chief Executive
Abby Johnson.
The campaign is not anti-bitcoin.
Michael Brune,
The former executive director of Sierra Club is now advising the campaign. He said that the campaign argues that climate change is at a critical point and that bitcoin, the most valuable cryptocurrency by market capitalization, is contributing too heavily to global warming.
He said that it is important for anyone who is in a position of responsibility to take action. It is impossible to ignore the fact that we are in a severe climate emergency.
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The goal of the project is to convince bitcoin’s investors and backers change the network code. This will remove the proof-of-work mechanism that requires bitcoin miners, who must expend energy while processing transactions in order to earn rewards in newly created Bitcoin. According to Mr. Brune, the change could dramatically reduce bitcoin’s energy consumption.
Bitcoin’s energy usage is a defense mechanism that protects the network. It is open-source software, so anyone can use it. However, the network requires miners who expend huge amounts of computing power. This makes it prohibitively expensive to take control of the network. This could allow someone to create counterfeit Bitcoins or erase transactions.
According to the Cambridge Centre for Alternative Finance’s estimates, the bitcoin network consumes slightly more energy each year (134.9 Terawatt hours) than Norway (124.3 Terawatt hours). However, the research institute found that bitcoin uses less energy per year than what is lost in the U.S. through electricity transmission.
Some bitcoin miners have found a solution by using more renewable energy sources to power the computers. But Messrs. Brune, Larsen feel 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. Aside from the fact that bitcoin is not owned or controlled by any company, any changes to the code will require agreement of almost all the parties involved.
Although proof of work is still used by Ethereum, it is now using proof of stake. This model essentially allows for energy to be exchanged for cryptocurrency. This change, which was delayed several times due to technical issues, is expected reduce Ethereum’s electricity consumption by 99%. The campaign hopes to achieve a similar switch for Bitcoin.
Paul Vigna can be reached at [email protected]
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