Bitcoin has attracted a great deal of criticism over recent years due to its high energy demands – something that is expected to grow if the price of Bitcoin rises further.
The price of Bitcoin has risen nearly 500% in the past 12 months, despite fears of a “major” 50% correction, wiping out nearly $500 billion of the market value of Bitcoin and cryptocurrencies combined over the past week.
Now, as Bitcoin’s biggest rival is gearing up for upgrades that developers hope will dramatically improve speed and efficiency, Cryptocurrency co-founder and CEO Ripple has suggested that Bitcoin follow Ethereum in moving to a more green model.
“I would argue that such a change is extremely important for Bitcoin to remain the world’s dominant cryptocurrency,” Ripple’s Chris Larsen wrote in a post on Medium this week.
Bitcoin currently uses a system called Proof of Work, with so-called “miners” using massive amounts of computing power to secure the Bitcoin blockchain. Miners are rewarded for their work with newly generated bitcoin tokens and a fee paid for verifying bitcoin transactions.
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 existing transaction fees and mining model overhaul. Ethereum’s proof-of-stake model will see “verifiers” replace miners and users sending fees to the network itself which will be removed from circulation.
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Meanwhile, Ripple’s XRP, a top-five cryptocurrency designed for use by the financial services sector to improve cross-border transactions, has been using a model called Federal Consensus to validate transactions and secure its ledger for most of the past decade.
“I know this is a bold proposition, but it deserves a serious discussion given what the world looks like today (compared to when bitcoin was launched in 2009),” Larson wrote, referring to the average bitcoin power requirement of “132 TWh a year.” (equivalent to approximately 12 million American homes)” and “release an estimated 63 million tons of carbon dioxide annually.”
Larson said that bitcoin developers should seriously consider upgrading bitcoin and cautioned that “many of the most prominent bitcoin advocates are turning a blind eye or even ‘grazing’ to the problem of dubious claims.”
In the meantime, the interesting use of bitcoin’s power is starting to gain attention. Billionaire philanthropist Bill Gates recently warned that Bitcoin is “not a great climate thing” while US Treasury Secretary Janet Yellen called Bitcoin’s energy use “amazing.”
However, Bitcoin supporters have largely dismissed criticism of Bitcoin’s energy use even amid evidence that Bitcoin is using more electricity since it began its last bullish wave in October.
Last month, crypto investor Nick Carter responded to allegations that bitcoin mining could contribute to environmental disasters.
“I think bitcoin will be mined almost exclusively using non-competitive energy,” Carter wrote in a post on Medium, arguing that bitcoin miners are being incentivized to look for cheap, renewable forms of energy.
“Suffice to say, there is enough non-viral power to power Bitcoin multiple times. It’s just a matter of spreading the hash to the right locations, which miners do — aggressively.”
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