Earlier this week, a consortium of environmental groups and local organizations opposed to blockchain mining operations in their communities announced a new ‘Clean Up Bitcoin’ campaign. The campaign aims to push BTC “investors and influencers” to force a shift from the tech’s current Proof of Work (PoW) consensus mechanism to one delivered by Proof of Stake (PoS) as a way to reduce BTC’s significant carbon footprint.
This ‘Change the Code, Not the Climate’ campaign is based on the notion that PoW—which relies on groups of power-hungry CPUs competing to be the first to solve a mathematical puzzle and claim the reward for ‘finding’ a BTC block—is less energy efficient than PoS, which would voluntarily split the transaction validation process (and the block reward) between individuals/entities (aka ‘validators’) that stake a certain amount of BTC to participate in the scheme.
The campaign provides ready-made social media messages targeting a number of prominent BTC figures, including Block boss Jack Dorsey, Tesla’s Elon Musk and Fidelity Investments CEO Abby Johnson. The trio are among the individuals the campaign is urging to “use their power to stop Bitcoin from wasting ours,” even as the enviros acknowledge the fact that “stakeholders are incentivized not to change.”
Enter the Larsen
There’s no doubt that PoW consumes a great deal of energy—at least, when compared to PoS—which has sparked strident pushback against BTC and other PoW blockchains by environmental groups (and a growing number of politicians). But the groups involved in the new campaign—including Greenpeace USA, the Environmental Working Group—have an unlikely ally in Chris Larsen, co-founder/executive chairman of Ripple. Larsen’s personal climate foundation is described as the “initial funder” of the campaign.
Ripple Labs’ XRP token is an obvious competitor to BTC, yet Larsen tweeted that Ripple the company was “not involved in this campaign.” Larsen also told Bloomberg that if he was truly threatened by Ripple’s digital currency competitors, then “probably the best thing I could do” would be to allow BTC to continue along its “unsustainable path.”
Larsen added that he hopes both BTC and Ethereum—which is (still) planning to switch to a PoS consensus mechanism at some point this millennium (honestly!)—will eventually achieve mass acceptance, something Larsen claims won’t happen if green-conscious investors start to bail on PoW technologies.
Cynics will suggest that Larsen’s high-profile involvement in this campaign has more to do with both his and Ripple’s desperate need for some positive press. Larsen is personally named in a high-profile lawsuit brought by the U.S. Securities and Exchange Commission (SEC), which accused Ripple Labs of raising $1.3 billion via its “unregistered, ongoing asset securities offering” aka selling the XRP token to the public following a substantial insider pre-mine. (The legal action, filed in December 2020, remains an ongoing process.)
We don’t need your stinking stakes
Reaction to Larsen’s involvement in the campaign was swift, with various social media mavens accusing Larsen of trying to boost his own project at the expense of its rivals. Others doubted that the campaign could convince a sufficient number of BTC developers to alter the technology’s code (despite ample evidence of both their capability and willingness to do so when it suits their purpose).
Regardless of Larsen’s motives, a switch to PoS might indeed reduce BTC’s carbon footprint while poking even larger holes in its adherents’ decentralization claims. A PoS system requires validators to put up a significant volume of tokens as their stakes, which means that only those who either already have or can afford to acquire a sufficient BTC war chest would be able to participate.
In other words, participation in a PoS system would be limited to a handful of BTC whales—–just as Ethereum 2.0 will be dominated by ETH whales—a classic example of the rich getting richer. Individuals currently pretending to be BTC nodes by synching up their Raspberry Pi’s would derive little personal benefit from such a system beyond burnishing their ‘crypto serf’ status.
None of the above
PoW is the consensus mechanism detailed in Bitcoin’s 2008 white paper, so it would be a tall order for a PoS-based technology to properly wear the ‘Bitcoin’ mantle. (Other unwarranted alterations to Bitcoin’s code are how we ended up with BTC, an inert form of ‘digital gold’ that can no longer function as a peer-to-peer electronic cash system.)
But there is a way that PoW systems can be both secure and environmentally friendly – and it’s already here, in full working order. The Bitcoin SV (BSV) blockchain remains true to the white paper’s original vision by continually expanding the original block-size, which allows it to handle a virtually unlimited transaction volume, which in turn makes BSV the most energy efficient blockchain around.
This ability to pack an ever-increasing number of transactions into each individual block makes BSV the sword that cuts PoW’s Gordian Knot. While BTC miners consume a phenomenal amount of energy to find blocks containing a maximum of 4,200 transactions, BSV uses a fraction of that amount of energy to find blocks containing hundreds of thousands of transactions (and that latter figure grows by the day).
BSV’s transaction capacity also resolves the issue of what will motivate miners to continue processing transactions after the final block rewards are issued in the year 2140. Without a significant volume of transaction fees to take the place of those rewards, why would miners continue to secure the BTC chain? The BTC developer cabal is apparently content to leave the elusive answer to that question to future generations, however the rubber is going to hit the road so to speak once the next halving events occurs in mid-2024.
Throw in secure data storage (BSV’s other ‘killer app’) and BSV has in spades something all the other blockchains in the world utterly lack: utility. It’s one thing to pitch switching consensus mechanisms from PoW to PoS, but if all your blockchain does is track chips in a speculative crypto casino, then all energy expended in sustaining such a project can be considered wasted, regardless of whether than energy was ‘clean’ or ‘dirty.’
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