Bitcoin must move away from its core proof-of-work technology to remain a dominant cryptocurrency, Ripple’s co-founder says | Currency News | Financial and Business News


Ripple co-founder Chris Larsen.

  • Ripple’s co-founder believes that Bitcoin developers should be concerned about proof-of-work technology.
  • He suggested switching to a climate-neutral method such as proof of deployment or consensus from the federation.
  • “Such a change is critical for Bitcoin to remain the world’s dominant cryptocurrency.”
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The conversation about Bitcoin’s environmental threat seems to be escalating as more people point out its impact on the climate.

Ripple co-founder Chris Larsen has suggested that Bitcoin should abandon its core proof-of-work (PoW) technology used in the mining process. He said it should instead use other methods like proof-of-stake (PoS), federated consensus, or some other technology that has yet to be developed.

PoW is an algorithm in blockchain technology that is used to confirm Bitcoin transactions and create new blocks in the chain. It’s an energy-intensive process, and even some transactions on the network can have a carbon footprint as large as driving a gas-powered sedan over 1,000 kilometers.

Bitcoin, executed using the PoW algorithm, has caused it to consume an average of 113.8 terawatts per hour, which is roughly the energy consumption of 12 million U.S. households, and releases an estimated 63 million tons of CO2 per year, Larsen said in a blog post this week.

The PoS network that Ethereum 2.0 runs on is more energy efficient as it requires less processing power to secure the blockchain. Larsen believes that Binance Coin and Ethereum, both of which work with PoS, should be commended for their sustainability efforts.

“I know this is a bold suggestion, but given the world today (compared to Bitcoin in 2009) it is worth serious discussion,” Larsen said. “While there is passionate debate about PoW versus other validation methods, we now have nearly a decade of data to review.”

Ripple’s XRP has been using a federated consensus for nine years, which allows multiple companies to take over the network. According to Larsen, this suggests a climate-neutral network equivalent to the energy consumption of only 50 US households per year.

“Today, non-PoW based coins (including the expected change from Ethereum) account for 43% of all cryptocurrencies by market capitalization, and the majority of new cryptocurrencies launched today are foregoing PoW. It’s clear where the trend is headed.”

“I would argue that such a change is vital for Bitcoin to remain the world’s dominant cryptocurrency.”

Larsen warned that while Bitcoin is gaining institutional and retail importance, many of its proponents turn a blind eye or are trying to wash its problem green.

He also said that Tesla’s $ 1.5 billion investment in Bitcoin goes against the purpose of being an electric vehicle maker. The purchase wiped out the automaker’s entire annual carbon savings, he said.

“As companies begin to understand this worrying context, they should rightly be concerned about investing. Bitcoin proponents should view this as a significant threat.”