Environmental Working Group (EWG) has demanded Bitcoin follow Ethereum’s step, shifting the network’s current consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS). Ethereum’s transition—The Merge—reduces the network’s energy usage by more than 99 percent.
EWG’s notice also announced plans to launch a $1 million online campaign—as a part of its "Change the Code, Not the Climate" campaign—to push Bitcoin into abandoning the “outdated protocol.” EWG director Michael Brune said that other digital tokens had adopted more efficient validation mechanisms for years. Brune also called Bitcoin an “outlier” for maintaining the current system.
EWG senior VP of government affairs Scott Faber said that Ethereum’s Merge was “good for the climate.” He referred to a report from the Office of Science and Technology Policy in September, revealing that PoW staking used more power than regular home computers.
“The Merge proves that changing the code is possible,” Faber said. “The Merge proves that digital assets that rely on proof-of-work can change to proof-of-stake and use far less electricity […] We’re hopeful that the Bitcoin (BTC) community will follow Ethereum’s lead.”
Faber asserted that the organization did not oppose digital currencies but was concerned by the rising electricity use associated with PoW staking. The executive said that the increased use would “inevitably” result in climate disruption.
Climate groups to bitcoin: Cut the pollution, and the B.S. https://t.co/qExsfJfDLd
— EWG (@ewg) September 15, 2022
Other environmental groups also voiced support for Ethereum’s initiative and demanded Bitcoin follow suit. Greenpeace special project manager Rolf Skar said that everyone is responsible to take action in the climate crisis. Skar also called for companies like Fidelity Investments, Paypal and BlackRock—which he said to make profits from Bitcoin—to urge the network to take action.
PennFuture’s Robert Altenburg said that Bitcoin mining in Pennsylvania relied on energy generated by burning coal waste. Altenburg further explained that it was not Bitcoin miners who directly experienced the “real cost” of air pollution caused by the energy use but the surrounding community.
Resistance to change
Some names in the crypto industry have advised against shifting Bitcoin’s PoW to PoS. They mentioned security risks, disruption to the blockchain's decentralization and potential issues with U.S. authorities.
MicroStrategy’s Michael Saylor dubbed PoW as the “only proven technique for creating a digital commodity.” Saylor called the data on the total energy use of digital tokens worldwide a “rounding error.” He said that the total energy use information did not affect the current climate issue significantly.
“PoS Cryptocurrency Securities may be appropriate for certain applications, but they are not suitable to serve as global, open, fair money or a global open settlement network,” Saylor added. “Consequently, it makes no sense to compare Proof of Stake networks to Bitcoin.”
In his recent blog post, Saylor wrote that 59.5 percent of the energy used in Bitcoin mining came from sustainable sources. There is also a potential 18-36 percent increase in energy efficiency, which improves its value.
William Szamosszegi, chief executive officer of Sazmining, said that people judged Bitcoin by its “ingredient” instead of its intrinsic value. Szamosszegi explained that Bitcoin could solve challenges in society, including providing legitimate and decentralized currency, a feat that he said could not be achieved by the PoS mechanism.
In August, the House Energy and Commerce Committee requested crypto mining firms to submit data on their energy consumption, sources and the percentage of sustainable sources used. New York has also proposed a bill to prevent mining companies from renewing licenses unless the operations fully used sustainable energy.