A consortium of environmental groups on Monday launched a campaign aimed at changing Bitcoin’s code to reduce energy consumption, which has increased significantly in recent years.
Bitcoin is popular with some investors, but its energy use has angered environmental groups, alarmed some lawmakers, and put the cryptocurrency at odds with a green movement that has some supporters on Wall Street. The new campaign aims to convince people involved with cryptocurrency, from miners to investors to software developers, that a change is better for the environment and for bitcoin’s reputation and support.
Greenpeace USA, the Environmental Working Group and others will place advertisements in media outlets such as the New York Times,
Politico and The Wall Street Journal highlight Bitcoin’s environmental impact and advocate for change. The campaign is being funded by Ripple co-founder Chris Larsen, who is not representing the cryptocurrency firm in this endeavor. Mr. Larsen said he provided $5 million.
Some of the ads target prominent bitcoin supporters such as Tesla Inc.
CEO Elon Musk, Block Inc.
Founder Jack Dorsey and Fidelity Investments Chief Executive Abby Johnson.
The campaign is not anti-bitcoin, said Michael Brune, the former Sierra Club executive who advises the campaign. Rather, he argues that climate change has reached a critical point and Bitcoin, the most valuable cryptocurrency in terms of market cap, is contributing too much to global warming.
“It is important that everyone who is able to act, act,” he said. “One cannot ignore that we are in a climate emergency.”
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The goal is to convince the Bitcoin investor and supporter community to change the network’s code and remove the “Proof of Work” mechanism, which requires Bitcoin “miners” to expend a certain amount of energy , while processing transactions to earn rewards in newly created bitcoins. The change could drastically reduce Bitcoin’s energy consumption, Mr. Brune said.
Bitcoin’s energy consumption is a defense mechanism to protect the network. Because it is an open source project, anyone can run the Bitcoin software. But the network requires miners to expend massive amounts of computing power to make it prohibitively expensive for someone to take over the network, which could allow them to create fake bitcoins or delete transactions.
The Cambridge Center for Alternative Finance estimates that the Bitcoin network uses slightly more energy at 134.9 terawatt hours per year than Norway at 124.3 terawatt hours. However, the research institute said that bitcoin uses less energy than is lost in the US in electricity transmission.
Some bitcoin miners have addressed the problem by using more renewable energy sources to power their computers, but Messrs. Brune and Larsen believe this is not enough.
Bitcoin’s environmental impact has been an issue for years, but officials have dismissed the nature of the proposed changes. Additionally, since bitcoin is not owned by any company, changing the code requires that almost all parties involved in its maintenance — something on the order of 90% or more — agree to a change.
The Ethereum network also uses Proof of Work, but is switching to a model called Proof of Stake, which essentially trades energy for cryptocurrency. This change, the implementation of which was delayed several times for technical reasons, is intended to reduce Ethereum’s power consumption by 99%. The campaign hopes to bring about a similar shift for Bitcoin.
Write to Paul Vigna at Paul.Vigna@wsj.com
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https://www.wsj.com/articles/environmental-groups-pressure-bitcoin-community-to-lower-energy-use-11648509353?mod=rss_markets_main Environmental groups are pressuring the bitcoin community to reduce energy consumption