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Bitcoin has long been criticized for its environmental footprint, but now a campaign led by Greenpeace USA and Ripple chairman Chris Larsen is amplifying this criticism. But not everyone agrees with the campaign’s premise — many bitcoin miners and investors in particular — and the bitcoin community has been quick to respond.
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The “Change The Code, Not The Climate” campaign aims to change bitcoin’s software code to use much less energy, according to a statement on the Greenpeace website — and now activists are fighting against mining facilities in their communities, with the growing Bitcoin’s contribution to the cash register is rejected gas pollution.
According to the campaign manifesto, a software code change would reduce bitcoin’s power consumption by 99.9%.
“Changing to an energy-efficient protocol has proven effective and consumes a fraction of the energy. Ethereum changes its code. Many others use less energy. Why is bitcoin not?” reads the manifesto on the campaign website. The problem – according to the manifesto – is that bitcoin uses an outdated technology called proof-of-work to validate transactions. This proof-of-work method, at least as it currently works, requires huge amounts of energy – and thus is a huge source of climate pollution.
As the price of bitcoin rises, so does energy consumption, the manifesto claims. According to the Cambridge Center for Alternative Finance (CCAF), bitcoin currently consumes about 137 terawatt hours per year — more than the entire energy consumption of some countries, such as Sweden.
“This campaign isn’t anti-bitcoin — it’s anti-pollution,” Larsen said in Greenpeace’s announcement. “We need to clean up our industry. And the problem is not, as some have suggested, supplying bitcoin with clean energy. We need the limited supply of clean energy for other vital applications. The problem is changing the code to use much less energy. That is the ecologically responsible way forward.”
Many Bitcoin Miners, Investors Remain Skeptical Of Lobbying Efforts
Jason Deane, chief bitcoin analyst at Quantum economics and a bitcoin miner, told GOBankingRates that “the impact of this advertising effort and even the concept itself is easy for miners to measure. It is zero.”
“Miners fully understand the value of what they are doing and the fact that much of bitcoin’s underlying value is rooted in linking money to the laws of thermodynamics. Removing this aspect of the mechanism also makes it lose its value as a truly independent network, as the ‘low energy’ alternative is not really an alternative in terms of security and independence,” he said.
He explained that removing proof-of-work removes the essence of bitcoin and renders it worthless.
“As a result, there are no miners who would consider moving to proof-of-stake, or even consider it a possibility, so it will just go ahead and all planned expansions will continue as before. Profits paid to investors will continue to be based on exactly the same formulas as before.”
Legislation could lead to moratorium on crypto mining over climate and energy issues
Earlier in March, the New York State Assembly’s Environmental Conservation Committee introduced a bill that would impose a two-year moratorium on cryptocurrency mining activities to prevent environmental impacts in the state, as GOBankingRates previously reported.
“The continued and extensive operation of cryptocurrency mining operations with proof-of-work authentication methods to validate blockchain transactions will significantly increase energy consumption in New York State and affect compliance with the Climate Leadership and Community Protection Act,” the statement said. text of the law reads in part.
Yvonne Taylor, vice president of environmental NGO Seneca Lake Guardian, said in the campaign announcement that “Governor Kathy Hochul must act now to prevent outside speculators from causing irreversible damage to our communities and the planet by imposing a moratorium.” put on proof-of-work cryptocurrencies. mining… With 20% of the country’s climate-destroying bitcoin mining, New York has become the wild west for a risky currency favored by authoritarian states and criminals, [and] that threatens our very real $3 billion a year agritourism industry, including 60,000 jobs.”
According to The Block Research’s 2022 Digital Asset Outlook Report, bitcoin miners earned more than $15 billion in revenue over the course of 2021, a staggering 206% year-over-year increase.
Mikkel Mørch, Executive Director at crypto/digital asset hedge fund ARK36told GOBankingRates that while environmental issues surrounding investment should not be taken lightly, Ripple co-founder Chris Larsen’s efforts to change bitcoin’s code in the name of climate are “deceptive at best, unfair at worst.”
“Larsen knows that a change in the bitcoin code is unlikely to happen, as it would require the support of the majority of bitcoin miners. The problem is, miners have no incentive to do a proof-of-mind. stake bitcoin, as it would make them redundant and take their very lucrative source of income away from them,” Mørch said. “And even if that happened, a change in the code would really just cause a bitcoin hard fork — a new version of BTC would be born, but the older one would still exist. It wouldn’t change anything.”
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Mørch explained that it is a false dilemma that we can have either a proof-of-work bitcoin or an environmentally sustainable bitcoin.
“Bitcoin miners are incentivized to seek the cheapest energy sources and renewables are indeed much cheaper than fossil fuels. Moreover, there is a multitude of cryptocurrencies that already use alternative consensus mechanisms such as the proof-of-stake. Notably, ethereum will switch to proof-of-stake later this year. So far, however, bitcoin remains the largest cryptocurrency by market capitalization and one that is most valued. In other words – the free market has already shown a clear preference for the proof-of-work bitcoin,” he said.
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About the author
Yael Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including: Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major New York City financial firms, including New York Life and MSCI. Yael is now a freelancer and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare”, with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in journalism from New York University and one in Russian studies from Université Toulouse-Jean Jaurès, France.