A coalition of environmental groups launched Monday a campaign to change bitcoins code in order to reduce its energy consumption, which has increased significantly 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 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 the environmental impact of bitcoins and advocate for change. Ripple cofounders fund the campaign
Chris Larsen
This is not the case for Mr. Larsen, who is representing the cryptocurrency firm in this venture. Mr. Larsen claimed he provided $5 Million.
Some ads target prominent bitcoin backers like
Tesla Inc.
Chief Executive
Elon Musk,
Block Inc.
Founder
Jack Dorsey
Fidelity Investments Chief executive
Abby Johnson.
There have been efforts to reduce bitcoin’s energy footprint. A group of 250 companies, including miner Hut 8 Mining Corp. support the Crypto Climate Accord. This agreement aims to shift the industry to renewable energy sources. Some miners, such as Easton, Md.-based
TeraWulf Inc.
They are working to create zero-emissions operations.
The new campaign isn’t anti-bitcoin.
Michael Brune,
The former executive director of Sierra Club is now advising the campaign. Instead, he stated that it argues against climate change and that bitcoin, the most valuable cryptocurrency, is contributing too much towards global warming.
He said that it is important for anyone who is in a position of responsibility to take action. We are in a 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. Mr. Brune stated that 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 possible to take over the network. This could make it prohibitively costly for someone to create counterfeit bitcoins and erase transactions.
The Cambridge Centre for Alternative Finance estimates the bitcoin network consumes slightly more energy each year, 134.9 Terawatt hours, than Norway’s 124.3 Terawatt hours. However, the research institute stated that bitcoin consumes less energy than electricity transmission in the United States.
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 isn’t 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, [email protected]
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