Green groups want Bitcoin’s giant carbon footprint reduced

Cryptocurrencies are increasingly gaining currency worldwide, but not everyone is pleased about that development. Environmentalists have long been crying foul about the vast carbon footprint of Bitcoin and other blockchain-based virtual currencies.

The carbon footprint of Bitcoin alone equals that of New Zealand with its nearly 37 megatons of CO2 annually, according to analysts.

Other experts estimated a year ago that the Bitcoin network used slightly more than 121 terawatt hours of power, or more than entire nations such as Argentina, the Netherlands or the United Arab Emirates. And since then the energy dependence of Bitcoin has increased further to more than 130 terawatt hours.

To raise awareness of the virtual currency’s giant, and growing, environmental impact, prominent green groups such as Greenpeace and the Environmental Working Group will be running ads in major media outlets across the United States. The aim will be to find ways to mitigate the effects of Bitcoin on the climate.

“The goal is to persuade bitcoin’s community of investors and backers to change the network’s code, removing the ‘proof of work’ mechanism that requires bitcoin “miners” to expend a certain amount of energy while processing transactions to earn rewards in newly created bitcoin,” the Wall Street Journal writes.

“Bitcoin’s energy usage is a defense mechanism designed to protect the network. Because it is an open-source project, anybody can run the bitcoin software. But the network requires miners to expend vast amounts of computing power to make it prohibitively expensive for somebody to take over the network, which could allow them to create counterfeit bitcoins or erase transactions,” the newspaper explains.

However, changing the code of Bitcoin, which is not owned by a sole entity, would require broad-based consensus among all the people involved in its maintenance.

“It is really by design that Bitcoin consumes that much electricity,” notes Michel Rauchs, a researcher at the Cambridge Centre for Alternative Finance. “This is not something that will change in the future unless the Bitcoin price is going to significantly go down.”

A workable model for lowering Bitcoin’s energy usage would be the switch that Ethereum, another popular virtual currency, is undertaking from the proof of work model to a model known as proof of stake.

“That change, the implementation of which has been delayed several times for technical reasons, is expected to reduce Ethereum’s electricity usage by 99%. The campaign is hoping to effect a similar switch for bitcoin,” the Wall Street Journal says.


 

© 2022 Sustainability Times.

This article is licensed under a Creative Commons Attribution-ShareAlike 4.0 SA International License.

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