Environmental groups want Bitcoin to follow Ethereum’s lead in moving to proof-of-stake

by · September 15, 2022

The transition of the Ethereum blockchain from proof-of-work to proof-of-stake has reduced energy use by more than 99% – and many climate activists have called for Bitcoin to follow suit.

In a Thursday announcement following the merger, the US-based Environmental Working Group, or EWG, announced it would launch a $1 million campaign aimed at encouraging Bitcoin (BTC) to go green as opposed to using an “outdated protocol ” as PoW. The announcement came as environmental activist group Greenpeace launched a petition directly with Fidelity Investments to ease the transition to PoS.

“Other cryptocurrency protocols have operated on efficient consensus mechanisms for years,” said Michael Brune, director of the EWG campaign. “Bitcoin has become the ultimate, defiantly refusing to accept its climate responsibility.”

Speaking to Cointelegraph, EWG senior vice president of government affairs Scott Faber suggested that the merger event was generally “good for the climate” in reducing the energy requirements of the Ethereum blockchain. He cited a September report from the White House Office of Science and Technology Policy that concluded that cryptocurrencies — especially considering PoW efforts — contributed significantly to energy use and greenhouse gas emissions, using more electricity in the United States than for home computers.

“The merging proves that it is possible to change the code,” Faber said. “The merger proves that digital assets that rely on proof-of-work can be changed to proof-of-stake and use far less power […] We hope that the Bitcoin community will follow Ethereum’s lead.”

Faber added that he would support any effort by the White House to set energy standards that affect crypto miners, saying regulators “shouldn’t stand around and hope for the best” but needed to take action “quickly” given the climate crisis:

“We are agnostics. We support cryptocurrency. We are not opposed to digital assets, but we are concerned about the increasing power use associated with assets that rely on proof-of-work, and the climate pollution that inevitably results from more and more power use.”

Some industry leaders have pushed back against moving the Bitcoin blockchain to PoS, citing security concerns, the impact on the network’s decentralization and how coins will be treated by US regulators. In a Wednesday blog post, MicroStrategy co-founder Michael Saylor claimed that PoW was the “only proven technique for creating a digital commodity” like Bitcoin, and suggested that the cryptocurrency’s total global energy use was a “rounding error” that was “neither the problem nor the solution.” to solve the climate crisis.

“Regulators and legal experts have noted on many occasions that Proof of Stake networks are likely to be securities, not commodities, and we can expect them to be treated as such over time,” Saylor said. “PoS Crypto 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. Therefore, it makes no sense to compare Proof of Stake networks with Bitcoin.”

Bitcoin mining platform Sazmining CEO William Szamosszegi told Cointelegraph in May:

“The fundamental error which […] critics of Bitcoin’s energy consumption is that they judge Bitcoin by its ‘ingredients’, rather than its value proposition. […] We should judge a new invention by the extent to which it solves a problem in society. PoW enables sound money and a decentralized currency backed by real-world energy. PoS cannot possibly achieve this.”

Related: Environmental groups are calling on the US government to take action against crypto miners

Many US lawmakers have targeted major Bitcoin miners, and members of the House Energy and Commerce Committee in August asked mining companies to provide information, including the energy consumption of their facilities, energy sources and what percentage came from renewable energy. At the state level, New York has proposed a two-year moratorium on PoW mining, legislation that would also prohibit the renewal of licenses for existing companies unless they operated on 100% renewable energy.