- This week, Greenpeace launched a lobbying campaign for the Bitcoin network to make a code change to lower its energy consumption.
- The campaign enraged the crypto community, who were quick to point out the challenges with the change.
- We break down the top 6 reasons the community is pushing back.
This week, Greenpeace USA, along with a number of other groups, launched a lobbying campaign for the Bitcoin network to make a code change that will reduce its power consumption.
The campaign, titled Change The Code, Not The Climate, includes a digital advertising push in publications such as The Wall Street Journal, The New York Times and on social media platforms such as Facebook.
Some of the messages will include personalized attacks on prominent businesspeople in the crypto industry, such as Abby Johnson, CEO of Fidelity, and Jack Dorsey, founder and CEO of Twitter, from Block.
One message reads: “Hey Fidelity. The planet is not ready for early retirement.”
Another reads, “If just a few dozen people agreed to change bitcoin, it would stop polluting the planet.”
As for the crypto community, the campaign massively simplifies how Bitcoin works and reiterates a number of myths that have spent many years debunking.
The Bitcoin network uses a very power-intensive system to validate transactions without the need for a third party, but it is also very secure.
Greenpeace opposes this energy intensity, which according to research from the University of Cambridge uses as much electricity as Greece, Sweden or the Netherlands in a year.
The coalition says moving the existing “proof-of-work” system to a “proof-of-stake” system would reduce its carbon footprint.
“It’s doable: One of Bitcoin’s biggest competitors, Ethereum, is now switching from this energy-wasting code to another that uses 99.9% less electricity without wreaking havoc on climate and pollution. Many other cryptocurrencies are already using low-power code,” Greenpeace said in a press release.
They believe 50 key bitcoin miners, exchanges and core developers have the authority to make this change.
We break down the six reasons why the community is unhappy with the campaign and why there won’t be a code change any time soon.
1. Would Bitcoin still be Bitcoin?
Bitcoin pioneered the proof-of-work consensus mechanism that is at its heart. It’s all about running powerful computers to solve complex puzzles and get rewarded in crypto, a process known as mining. Transactions are verified securely and decentrally.
In proof-of-stake, a network of “validators” contribute their own crypto to validate a new transaction, and when the blockchain is updated with that data, they earn a reward.
“There has long been an unshakeable consensus that Bitcoin’s proof-of-work code will not change,” Diana Briggs, DeFi Technologies’ chief strategy officer, said in an email to Insider. “It’s an extremely secure network and, at its core, impossible to simply swap out with Proof-of-Stake (PoS).”
“Ultimately, security comes first as Bitcoin is the most trusted digital asset,” she added.
Even Paul Riegle, the chief product officer of Algorand, a cryptocurrency that uses the greener Proof-of-Stake mechanism, acknowledges that Greenpeace’s proposal would change Bitcoin’s value proposition.
“What the campaign gets wrong about bitcoin is that there is no real desire in the broader bitcoin community and those running nodes to change its code,” Riegle said in an email to Insider. “Bitcoin was specifically designed to rely on proof of work for security, and there is no indication that climate activism will change that.”
He expects consumers and developers to migrate to other more sustainable systems and digital assets over time.
Jason Lowery, a National Defense Research Fellow at MIT who studies bitcoin, explained in a podcast that countries that ban bitcoin outright risk disarming themselves because bitcoin now has a role in national security.
2. Proof of Stake has not been scaled
Going to proof-of-stake would be incredibly risky because it would involve a reconfiguration of the entire blockchain, Derek Muhney, head of marketing at Coinsource, a Bitcoin ATM provider, said in an email.
“The solution shouldn’t be worse than the problem,” he added.
In a blog post Noelle Acheson, Head of Market Insights at crypto trading firm Genesisstates that there is still no solid evidence that proof-of-stake consensus mechanisms scale over time.
“A risky premise on which to base a change to a $900 billion asset,” she said.
3. It’s not just a simple code change
People who have been in crypto for many years know that the code change is not due to a handful of miners, exchanges, and developers.
A few years ago, the community was suggested to increase the block size of Bitcoin to reduce transaction fees. With no consensus in sight, the result in 2017 was a user-activated hard fork of the blockchain that became known as Bitcoin Cash.
The debacle even led to a book called The Blocksize War.
—Jerry Brito (@jerrybrito) March 29, 2022
Genesis’ Acheson highlights in a blog post that it took years of intensive development and broad acceptance from the start to turn Ethereum from proof-of-work to proof-of-stake.
“As anyone who has tried to change Bitcoin in the past has seen, even if the change was a good idea, achieving this level of consensus is unattainable,” Acheson said.
The switch would simply lead to another fork of the Bitcoin network.
“The effort relies not only on 50 major miners, exchanges and developers moving bitcoin to a proof-of-stake network, but also on the community recognizing the fork as legitimate.” said Tyler Benster, Technology Adoption Lead for Kadena Eco in an email.
“Greenpeace seems to be working on the idea of a normal fork, and bitcoin can absolutely be forked, that’s how we got bitcoin cash (BCH), but it’s a completely different coin now and one that most people don’t care about. said Muhney of Coinsource.
4. The role of Ripple’s co-founder
Chris Larsen, chairman and billionaire co-founder of crypto network Ripple, has pledged $5 million to the campaign.
“This campaign isn’t anti-bitcoin — it’s anti-pollution,” Larsen said in Greenpeace’s press release. “We have to clean up our industry. And the problem isn’t, as some have suggested, powering Bitcoin with clean energy. We need the limited supply of clean energy for other vital purposes. The problem is changing the code to use far less power. That is the environmentally conscious way forward.”
Ripple is not involved in the project, but Larsen has skin in it. At the time of writing, Ripple had not responded to Insider’s request for comment.
On Twitter, Larsen said this is a personal project and he still wishes Bitcoin was successful.
—Chris Larsen (@chrislarsensf) March 29, 2022
“It’s shocking that someone who has been in the crypto industry for years has no idea how Bitcoin code changes work,” said Cory Klippsten, CEO of Swan Bitcoin, a Bitcoin-focused company. “Code changes take months. Major code changes take years and are rare. They are thoroughly discussed and debated in an open-source process among tens of thousands of stakeholders.”
5. Ignoring innovations in clean energy use
“Some will think Christmas lights are a worthy use of electricity, others will not. The same applies to bitcoin. Bitcoiners believe that decentralized, global, solid money is a worthy use of energy,” said Klippsten.
Greenpeace and its partners are concerned about the endless reliance on fossil fuels in the mining process. However, innovations are being introduced that include greater use of clean energy sources.
“It’s important to understand that while Bitcoin, like almost everything else that adds value to our society, consumes resources, the majority of its energy comes from renewable sources,” Colin Pape, founder of decentralized search engine Presearch, said in email .
Briggs of Defi Technologies highlights that mining operations are beginning to use renewable energies such as hydro, solar, wind and nuclear. Some organizations also use natural gas that would otherwise be burned, she added.
She highlights that the miner Hive Blockchain Technologies uses only green energy.
“Right now, crypto’s energy consumption is high, but as adoption increases — and I believe it will continue to increase exponentially — the energy per unit of economic activity will fall dramatically,” said Kadena Eco’s Benster.
6. The campaign did not go through the proposal process
Despite all the talk of a Bitcoin code change, the campaign has yet to make a formal proposal to the Bitcoin network to begin the code change process.
— Jameson Lopp (@lopp) March 29, 2022