Here’s why bitcoin miners won’t go for a more climate-friendly alternative

fewer and fewer people they are using bitcoin for digital payments. However, bitcoin Transactions are consuming more energy than ever: the same amount like the whole of Thailand. With a carbon footprint equivalent to that of the Czech Republic (around 114 million tons per year), bitcoin is writing off other weather victories.

It is estimated that, for example, the global acceptance of electric vehicles has avoided 50 million tons of CO₂ so far. That’s less than half of bitcoin’s emissions in a single year. And the problem is getting worse. The growth of Bitcoin mining” powered by fossil fuels is outperforming greener alternatives, causing bitcoin’s carbon footprint to decrease swell up five times in just two years.

But, according to campaign groups Green Peace and the Environmental Working Group, all of this can be easily fixed with a simple bitcoin software update. His campaign, called Change the code, not the weatherlaunched recently and calls on bitcoin software developers to switch the network from their currently wasteful system for verifying transactions to a more environmentally friendly alternative.

The switch, they claim, would reduce bitcoin’s carbon footprint by 99.9%. But it’s unlikely to happen anytime soon, and here’s why.

From proof of waste to proof of stake?

Bitcoiners don’t trust bankers, tax collectors, and other nosy middlemen. Because there are no bitcoin banks, the job of keeping the books in order is given to a global network of specialized computers. The owners of these computers compete for accounting tasks in exchange for transaction fees paid by network users. They also receive some newly minted bitcoins as a thank you.

this competition it is known as proof-of-work (PoW) mining. It works like an ever-expanding game of hungry hippos. The more players join the contest, the more work each hippo will have to do to win something. If a new eco-minded hippo joins the game, everyone at the table has to work harder. Players fueled by coal in Kazakhstan or fossil gas in Texas, then spew more smog.

The higher the price of bitcoin, the more willing the dirty hippos are to waste coal and gas until the costs of doing so are equal to their reward. And so the Proof of Work is a proof of waste. And this is waste by design – bitcoiners call this inefficiency”the feature, not the bug”.

Greenpeace hopes the bitcoin community can learn to love Proof of Stake (PoS) instead. With the network running on PoS, bitcoin bookkeepers would need to stake a prescribed minimum amount of bitcoins as a security deposit. If they validate fraudulent transactions, they lose their participation. This disincentive keeps the network secure.

Several blockchains, including Cardano, EOS, and TRON, already use a PoS system, where token holders vote for the most qualified block producers. While Bitcoin currently uses millions of mining computers, these PoS networks typically maintain a pool of around 20 machines that use a comparatively miniscule amount of power, taking turns receiving the accounting rights.

code blockers

For bitcoin, encoding these changes would be straightforward. Greenpeace claims that only 30 people, the largest mining teams, exchanges like Coinbase and Binance, and code developers, would have to agree to the move to PoS.

But this ignores the fact that everyone would need to be running the updated software. On average, to successfully mine bitcoin once a week requires disbursing around 1.8 million dollars (£1.4 million) in hardware. Most miners protect these investments and are conservative when it comes to modifying the software code that supports their earnings.

For this reason, chris bendiksencommentator of the cryptocurrency the CoinShares website, puts the chance of Bitcoin ever moving to PoS at 0%. “There is no appetite among Bitcoiners to destroy the security of the protocol by making such a move,” he says.

Bitcoin is no stranger to coding deadlocks. An amendment was passed to address intermittent congestion issues and stabilize transaction fees. proposed in 2016. Despite being a relatively simple solution, the change divided the bitcoin community, with the vast majority continuing to support the slower and more expensive status quo.

Even if some users were prepared to ditch PoW, the original bitcoin network would continue in some form. This PoW version would keep the name, brand, super rich disciples, and polluting PoW miners. The PoS branch could end up as one more disappointing experiment.

Other PoW Heavyweight Network, Ethereum, has been promising a move to PoS since its birth. But this migration has continued just around the corner for many years.

Starting a PoS network from scratch is another option. But there is already a BitcoinPoS cryptocurrency Apart from an early flurry of interest, it is attracted few followers.

Tackling crypto greenwash

many bitcoiners mocked in the Greenpeace campaign. After all, much of the funding for this marketing mission It comes from billionaire venture capitalist Chris Larsen, co-founder of rival cryptocurrency Ripple.

Larsen’s Ripple was also an original member of the UN-backed Crypto Climate Accord, an organization convened in April 2021 to promote more sustainable cryptocurrency trading. In response, prominent bitcoin advocates established the Bitcoin Mining Council, a public relations group aim to “defend bitcoin against hostile and uninformed energy critics,” like Larsen.

Some argue that governments in Europe and North America must go on the chinese advantage and ban PoW mining.

retaliation campaigns of bitcoin advocates are on the rise, and their greenwashing appears to be winning. The European Parliament recently rejected a bill to ban PoW mining throughout the EU. The UK government also fears an exodus of crypto trading talent for other financial centers.

Research I have led suggests that effective regulation of bitcoin will not come from charity appeals. A globally coordinated ban, led by governments, is likely to be the most effective solution.

This article of peter howsonProfessor of International Development, Northumbria University, Newcastle is republished from The conversation under a Creative Commons license. Read the Original article.