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Environmental groups are pushing the Bitcoin community to reduce energy use

A consortium of environmental groups launched a campaign on Monday to change its bitcoin code to reduce its energy use, which has grown significantly in recent years.

Bitcoin is well-known among some investors, but its energy use has bored environmental groups, overwhelmed some lawmakers and contradicted cryptocurrency with a green movement that has some supporters on Wall Street. The new campaign aims to convince people related to cryptocurrencies, from mining companies to investors to software developers, that a change is better for the environment and for the reputation and support of bitcoin.

Greenpeace USA, the Environmental Working Group and others will place advertisements in media outlets such as the New York Times,

Politico and The Wall Street Journal highlight the environmental impact of bitcoin and advocate for change. The campaign is funded by Chris Larsen, one of the founders of Ripple, who does not represent the cryptocurrency company in this effort. Mr. Larsen said he donated $ 5 million.

Some ads are aimed at major bitcoin sponsors, such as Tesla Inc..

Elon Musk, Block Inc. CEOs.

Founder Jack Dorsey and CEO of Fidelity Investments Abby Johnson.

The campaign is not against bitcoin, said Michael Brun, the former executive director of Sierra Club who is advising the campaign. On the contrary, he said that climate change has reached a critical point and that bitcoin, the most valuable cryptocurrency in terms of market capitalization, is causing too much global warming.

“It’s important to act, anyone who is acting,” he said. “You can’t ignore the fact that we’re in a climate emergency.”

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The goal is to persuade the bitcoin investor and sponsor community to change the network code by removing the “proof of work” mechanism required by bitcoin “miners” to spend a certain amount of energy while processing transactions to win rewards for newly created bitcoin. The change could drastically reduce bitcoin’s energy use, Mr Brune said.

Bitcoin’s energy use is a defense mechanism designed to protect the network. Since it is an open source project, anyone can run bitcoin software. But the network requires miners to waste a great deal of computing power, making it extremely expensive for someone to take over the network, which could allow them to create fake bitcoin or delete transactions.

The Cambridge Center for Alternative Finance estimates that the bitcoin network uses slightly more energy per year, 134.9 terawatt hours, compared to Norway, 124.3 terawatt hours. The research institute said, however, that bitcoin uses less energy than is lost in the U.S. in electricity transmission.

A bitcoin mining facility in New York State is using electricity from a local hydroelectric power plant fed by the Niagara River. The company is part of a group of miners trying to make the industry more sustainable, both environmentally and financially. Illustration: Alex Kuzoian / WSJ

Some Bitcoin miners have addressed the issue of using more renewable energy sources to power computers, but Mr. Brune and Mr. Larsen believe that is not enough.

The environmental impact of Bitcoin has been a problem for many years, but people who are in control have ignored the proposed types of changes. In addition, since it is not owned by a bitcoin company, in order to change the code, almost all parties involved in maintaining it — something of 90% or more — must agree to a change.

The Ethereum network also uses proof of work, but is switching to a model called proof of stake, which essentially exchanges energy for cryptocurrency. This change, the implementation of which has been delayed several times for technical reasons, is expected to reduce Ethereum’s electricity usage by 99%. The campaign hopes to make a similar change to bitcoin.

Write to Paul Vigna at Paul.Vigna@wsj.com

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Environmental groups are pushing the Bitcoin community to reduce energy use

Source link Environmental groups are pushing the Bitcoin community to reduce energy use

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