Bitcoin isn’t just known as the largest cryptocurrency. It’s also criticized as one of crypto’s biggest sources of pollution.
That’s because Bitcoin’s crypto mining requires a huge amount of computer power since miners must complete complex puzzles to validate transactions and create new coins. This process is called “proof-of-work.”
This Monday, major climate activist groups announced they’re trying to steer Bitcoin away from such a mining process, claiming Bitcoin could be 99% greener if it shifted to a different model, like “proof-of-stake,” rather than the energy-intensive “proof-of-work.”
Greenpeace USA, Environmental Working Group and other climate organizations launched a campaign on Monday, with plans to run ads in The New York Times, Politico, and elsewhere, as first reported by the Wall Street Journal. Chris Larsen, the co-founder of Ripple, a fintech firm behind a rival cryptocurrency and a longtime critic of Bitcoin’s proof-of-work, reportedly provided $5 million to the campaign.
The Bitcoin community says this campaign is not just farfetched—it’s impossible. Not only is the campaign unlikely to succeed for a number of reasons, they say, but the proof-of-work model is a big part of why they are so devoted to Bitcoin.
Moving away from proof-of-work is ‘not realistic’
Larsen told Bloomberg that his part in the campaign isn’t to “bring down a rival cryptocurrency,” but only due to his interest in protecting the environment. He added that Ripple is not involved in the campaign either.
Though Larsen doesn’t name which mechanism he’d want Bitcoin to replace proof-of-work with, he mentioned Ethereum’s plan to shift to proof-of-stake on Twitter the week of the campaign, in seeming support of such a switch.
Under proof-of-stake, users validate transactions according to how many coins they contribute, or stake. This mechanism uses significantly less energy, as it renders mining obsolete.
The thing this campaign just doesn’t get, the Bitcoiners say, is that proof-of-work is a key part of Bitcoin’s value proposition. They see proof-of-work as vital for blockchain security and decentralization and they’re very protective over the mechanism. Most of them do not want any adjustment made.
“The odds of Bitcoin moving to proof-of-stake in the near future are very slim,” John Wu, president of Ava Labs, a team supporting development of the Avalanche blockchain, told Coins2Day. “Proof-of-work, though energy-intensive, has been fundamental to the philosophy and success of Bitcoin since the beginning.”
Wu notes that Satoshi Nakamoto, the anonymous developer of Bitcoin, mentions proof-of-work in his famous early white paper on Bitcoin as early as the fourth sentence. “Any proposed change to this core feature is highly unlikely to pass.”
Additionally, a change away from proof-of-work to something like proof-of-stake would destroy income for miners, since they’d become obsolete, too.
“Miners make money through the very capital-intensive business where they invest a lot in mining equipment that they then use,” Jerry Brito, executive director of DC-based crypto think tank Coin Center, told Coins2Day. This campaign is essentially “asking them to switch to a system where, on the day that they upgrade to the new code, all of their capital investment becomes worthless.”
Why the Bitcoin community thinks this campaign is ‘not realistic’
Beyond that, the campaign mistakenly assumes that it would be easy to even make this change. Bloomberg reports that “The campaign believes that about 50 key miners, crypto exchanges and core developers have the power to change Bitcoin’s code.” Brito says that’s just not accurate.
Being a decentralized network, or one not controlled by one group or entity, a Bitcoin Improvement Proposal (BIP) would have to be presented to the Bitcoin community and be voted on in order to pass. It could take years for all the miners, node operators and developers to agree on the BIP and reach consensus to move forward.
“We’ve seen this in the past where folks have said, ‘We can go to a few key miners or a few key exchanges, and if they support a code change, it will happen.’ And it’s failed miserably if the vast majority that actually run Bitcoin disagree,” Brito said.
People like to hear a number to visualize what actually deems to be consensus, but “there’s not,” he said. “There’s just got to be general consensus among the developers, miners and nodes,” or those running computers that make up the Bitcoin network.
Then there’s the real catch: Even if a BIP were to be agreed on, Bitcoin’s code wouldn’t automatically change. Miners and those running nodes would have to agree to upgrade their software to run the new code.
If some miners and nodes agreed to run the new code, it would cause a hard fork, or a situation where Bitcoin would split into two blockchains: The original proof-of-work one, and a new one following a different set of rules, maybe proof-of-stake. Regardless, the proof-of-work blockchain would still exist and process transactions.
“You’d have a new coin, but you’d still have Bitcoin on proof-of-work,” Brito said. “This has happened before. There’s Bitcoin Cash forked from Bitcoin. But, what typically happens to these coins is that they become irrelevant because there’s just no interest in them. The interest is in Bitcoin.”
Indeed, “The new protocols were never as successful as the original, and I think the idea of modifying Bitcoin today recalls the difficulties of this era,” Wu said.
Obviously, the campaigners likely see mining as bad, since they’re advocating for a move away from proof-of-work, which requires mining. But to make such a change to Bitcoin, miners would have to be convinced to stop doing what they’ve dedicated their lives to doing.
In turn, the newly launched campaign is “not realistic,” Brito said.
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