After central banks and governments, it is the turn of environmentalists to attack bitcoin, whose energy consumption they criticize. Cryptocurrency mining is thus singled out as an activity accelerating global warming with increasing CO emissions.2. Speaking on the subject, the co-founder of Ripple, Chris Larsen indicated that bitcoin would have to change course quickly if it intended to remain the market leader.
The Proof of Work (PoW) responsible for the high energy consumption of bitcoin
It is through a blog article that Mr. Feedback explained what he thought was causing Bitcoin’s energy consumption fault. He did not hesitate to point the finger at the PoW whose change he claims as the consensus algorithm of the bitcoin blockchain. “Let’s encourage and work with the people who build and contribute to the Bitcoin code – key miners, exchanges and grassroots developers – to consider moving away from PoW” he said. He notably took the example of new cryptocurrency projects which already consume little energy, or even neutral in carbon emissions.
CEO of Ripple, Brad garlinghouse already underlined the impact of PoW on the energy needs of bitcoin. “As the price of bitcoin rises, energy consumption, the carbon footprint of PoW mining that validates transactions, continues to grow aggressively.”, he said. According to a study by Cambridge University, the operation of bitcoin requires annual energy consumption of 130 TWh. At the scale of a nation, bitcoin would therefore consume as much as countries like Ukraine and argentina.
Follow Ethereum’s lead in abandoning PoW
As a solution, Mr. Feedback suggests that bitcoin make the transition to more energy efficient technology by following Ethereum’s approach. “Today, non-PoW-based tokens (including the early switch from Ethereum) accounted for 43% of all cryptocurrencies in terms of market capitalization, and the majority of new cryptocurrencies introduced today have chosen to avoid the PoW. It is clear that the trend is in this direction »He concluded. If the co-founder of Ripple in fact a prerequisite for maintaining bitcoin as the dominant cryptocurrency in the world, supporters of the latter take a different view.
Asset manager Cathie Wood, Ark Invest instead believes that bitcoin is an important driver of renewable energy. “Thanks to real data, we (ARK Invest) demonstrate that lBitcoin mining could encourage investment in solar systems (solar grids + batteries), allowing renewables to generate a higher percentage of grid energy with potentially no change in the cost of electricity ” he said in a white paper published jointly with Square.
A few days ago, we already announced that the domination of bitcoin over the rest of cryptocurrencies was at its lowest level for 7 months. After experiencing a loss of speed in the market, which has driven it below $ 50,000, it begins to rise. But how far will it go?
The comments and opinions expressed in this article are those of the author alone, and should not be considered as investment advice. Do your own research before making any investment decisions.