A Response to Chris Larsen's "Change The Code" Campaign
Today, Chris Larsen the Co-Founder and Executive Chairmain of Ripple who is currently in a lawsuit with the SEC over raising $1.3 Billion through the sale of unregistered securities, "distributing billions of XRP in exchange for non-cash considerations, such as labor and market-making services" and conducting unregistered personal sales of XRP totaling $600 million, teamed with GreenPeace to launch a marketing campaign titled "Change The Code." This campaign is focused on changing the Bitcoin software to fork it from a Proof of Work system to a Proof of Stake system, claiming climate change as the impetus. On the website they claim a number of "facts", suggesting Bitcoin uses more energy than Sweden, Bitcoin could warm the planet by more than 2 degrees Celsius, Bitcoin is "resurrecting" fossil fuels, and this could all be fixed by changing Bitcoin to Proof of Stake, a consensus mechanism that rewards larger token holders (such as Chris Larsen, owning 17% of XRP) with more control over the network.
This marketing campaign is at best an attack of ignorance, and at worst, a malicious attack attempting to drive Bitcoin out of the control of the user (you) and into the control of the elite. Now the likelihood of such a marketing campaign succeeding is effectively zero, as we have seen such an attempt in 2017 during the blocksize war, where a number of large miners and exchanges attempted to create larger blocksizes. During this incident, we learned it was truly the bitcoin nodes that had control.
You can read more on the blocksize wars here:
The Blocksize War
Regrdless of the feasibility of this attack, let's dig into the disingenuous facts touted by this campaign.
"Fact #1" - Bitcoin uses as much energy as Sweden:
Bitcoin energy usage is estimated around 70-120 TWh/yr using 2021 numbers. Most recent estimates for Sweden puts their energy usage around 130 TWh/yr. For comparison sake, US household tumble dryers use approximately 93 TWh/yr. Comparing an entire country's energy usage is a fantastical way to get a rise out of the reader, but no one is calling for the immediate destruction of American tumble dryers. In fact, one could easily argue that censorship resistant money that can transverse borders at the speed of light, bringing financial services to billions of disenfranchised humans across the globe may be more important than US clothes dryers. Here is a diagram from NYDIG breaking down Bitcoin mining energy usage in comparison to other industries.
"Fact #2" - Bitcoin could help warm the planet more than 2 degrees Celsius:
This "fact" is an interesting one, firstly because they follow "fact" by saying "could"...immediately dismissing it as fact. But furthermore, the carbon intensity of Bitcoin mining is substantially less than most common industries, including again...you guessed it, dryers. Research from "Messari Crytpto" lists Bitcoin mining carbon intensity as follows:
Breaking this down even further, Bitcoin has the highest sustainable energy mix according to the Bitcoin Mining Council, with global BTC mining using 56% of its energy from renewables, whereas the US only uses 30.5% renewables.
"Fact #3" - Bitcoin mining is resurrecting fossil fuel plants
In an attempt to not be disingenuous myself, there are reports of Bitcoin miners resurrecting a coal plant, such as Marathon reviving a coal plant in Montana, but this "fact" dismisses the power for Bitcoin miners to help slash emissions and cleanup waste. Just last week reports surfaced of Exxon Mobil using Bitcoin mining to cut its emissions of flared methane in North Dakota's Bakken oil and gas field, which is estimated to leak 275,000 tonnes of methane gas into the atmosphere every year. Methane is 25 times more potent than carbon dioxide at trapping heat in the atmosphere. The process of using this flared gas to power bitcoin miners would burn 100% of this methane producing CO2 and H20 as byproducts, a significant net positive in emissions. Additionally Stronghold digital mining is using coal waste to power Bitcoin mining. Per the company's website: "Our Bitcoin mining operations are powered through the reclamation of coal refuse sites across Pennsylvania. We remove coal refuse from piles and burn it in an emissions-controlled manner at our wholly owned generation facilities." This cuts back on the detrimental effects of coal refuse sites which are the largest source of water pollution in Pennsylvania, release particles into the air, polluting it for local populations, can lead to spontaneous wild fires which releases more CO2 and other pollutants, and destroys local ecosystems. The company claims to reduce NOx emissions by 90%, Sulfur Dioxide emissions by 98%, air particulate pollutants by 99.9%, and mercury pollutants by 99.9%.
"Fact #4" - A software change could reduce Bitcoin Mining energy usage by 99%
While a "switch" to POS would indeed reduce Bitcoin Mining energy usage, it would no longer be Bitcoin (in fact this would just result in another Bitcoin hardfork, perhaps named ironically, "Bitcoin Green"). Switching to a proof of stake model would remove the decentralized nature of Bitcoin, moving the authority to the largest stakeholders (think Jeff Bezos owning the majority voting share in Amazon), thus allowing the protocol to be influenced and governed by those with the most wealth invested. It would in essence, be the exact same system we live in now. Best put by George Carlin, "It's a big club, and you ain't in it". Despite this recent school of thought that seems to think we need to be energy restrictive, we actually need to be energy productive, pushing for energy abundance if we ever expect to no longer be dependent on fossil fuels.
The Western World is pushing for a transition to Electric Vehicles, but where are we going to get the Electricity capacity to sustain this?...According to the US energy information agency, In 2021, about 4,116 billion kilowatthours (kWh) (or about 4.12 trillion kWh) of electricity were generated at utility-scale electricity generation facilities in the United States. About 61% of this electricity generation was from fossil fuels—coal, natural gas, petroleum, and other gases. About 19% was from nuclear energy, and about 20% was from renewable energy sources. There are currently ~284 million registered vehicles in the US, of which ~2.3 million are EVs (0.8%). Doing some quick back of the napkin math, a Nissan leaf has a 62kwh battery, and gets approximately 180 miles per charge. The average American drives 39 miles per day, requiring a charge approximately every 5 days. That means, the average American would use an additional 4,526kwh per year charging their electric vehicle. If all vehicles were to become electric, that would require an additional 1.3 trillion kWh of electric capacity. With 61% of current electric generation coming from fossil fuels, converting to a truly renewable EV seems like an uphill battle. Bitcoin mining offers a truly flexible load (able to power up and power down quickly as the grid demands), as well as a buyer of last resort for energy, maintaining cash flow for electrical power operations as they build out their infrastructure.
Don't let savvy marketing trick you into believing something. Take the time, research the information I have detailed out in this article as clearly, the creators of "Change the Code" did not. If you do, you may come to realize that switching from a Proof of Work model will not stop "climate change"...in fact it may further its inevitability.