Bitcoin has attracted a great deal of criticism over recent years due to its sky-high energy demands—something that’s expected to grow as the bitcoin price climbs.
The bitcoin price is up around 500% over the last 12 months, despite fears of a “major” 50% correction wiping almost $500 billion from the combined bitcoin and cryptocurrency market capitalization over the last week.
Now, as bitcoin’s biggest crypto competitors prepare for upgrades that developers are hoping will vastly improve speed and efficency, the cofounder and executive chairman of Ripple has proposed bitcoin follow ethereum in transitioning to a more eco-friendly model.
“I would argue that such a change is critically important for bitcoin to remain the world’s dominant cryptocurrency,” Chris Larsen wrote in a Medium post this week.
Bitcoin currently uses a system called proof-of-work, with so-called “miners” using huge amounts of computing power to secure the bitcoin blockchain. The miners are rewarded for their work with newly-created bitcoin tokens and paid fees for validating bitcoin transations.
Late last year, ethereum, the second-largest cryptocurrency by value after bitcoin, began a long-awaited upgrade to ethereum 2.0 that will see the network’s current transaction fee system overhauled, with users sending a fee to the network itself instead of the miners that maintain the network.
Meanwhile, Ripple’s XRP, a top-five cryptocurrency that’s designed for use by the financial services sector to improve cross-border transaction, has been using a model called federated consensus to validate transactions and secure its public ledger for much of the last decade.
“I know this is a bold proposal, but it is worth a serious discussion given what the world looks like today (in comparison to when Bitcoin was launched in 2009),” Larson wrote, pointing to bitcoin’s average energy demands of “132 TWh a year (equivalent to roughly 12 million U.S. homes), and releasing an estimated 63 million tons of CO2 annually.”
Larson argued that bitcoin developers should seriously consider upgrading bitcoin and warned “many of bitcoin’s most prominent advocates turn a blind eye or even ‘greenwash’ the problem with questionable claims.”