A coalition of environmentalists have teamed up with a privately-held crypto company to urge the Bitcoin community to lower its carbon footprint with a major change to the protocol.
Launched on Tuesday, the Change the Code, Not the Climate coalition is lobbying for Bitcoin to adopt changes that would significantly cut the network’s carbon emissions, but also alter its security model and general ecosystem. The campaign—a collaboration between Greenpeace U.S.A. and the Environmental Working Group—is launching with $5 million in backing from the co-founder of Ripple Labs Inc., a cryptocurrency company currently embroiled in a lawsuit with the SEC for allegedly selling unregistered securities. It’s already a source of consternation among Bitcoiners who see the plan as hubristic, unnecessary, and unlikely to succeed.
Using University of Cambridge calculations, the Change the Code campaign tallies the Bitcoin network’s electricity use to be greater than all of Sweden. That’s because of Bitcoin’s security model, which is known as Proof-of-Work. In this setup, firms with warehouses full of specialized computers compete to solve a mathematical puzzle to win the right to add a block of transaction data to the blockchain and receive some newly-minted bitcoins as a reward.
Winning the puzzle is a guessing game, so the way to up your odds of earning a bitcoin is to put more work into the process, adding computers that all participate in the game at once. That leads to a lot of energy use, which costs money and provides security guarantees for the system. Because mining a block of data costs a decent amount of money in electricity costs, it’s too expensive for an attacker to alter the record of transactions. To Bitcoiners, this decentralized approach to security is core to the system. To the eyes of critics, it looks like a lot of energy waste.
A competing model called Proof-of-Stake is what’s being pushed by Change the Code, and it affords the right to validate a new block of data based on how many tokens someone already owns; so-called validators have to buy in by owning a certain amount of a coin, but they’re selected at random to mine from there, cutting out the additional guess-the-numbers required when all miners compete against each other in a global race. Bitcoiners, meanwhile, tend to see Proof-of-Stake as essentially plutocratic.
Amending Bitcoin’s code to follow the Proof-of-Stake model, as Ethereum is planning, would reduce its electricity use by an estimated 99 percent, and thus its reliance on fossil fuels. Though a number of Bitcoin operations are powered by renewables, depending on what’s locally available to miners at the lowest cost, the ballooning energy requirements are leading to unlikely partnerships between gas companies (Exxon being the latest), drilling operations, and once-defunct coal-fired power plants. Those operations most often use up gas that would otherwise be flared or vented into the atmosphere, but critics say it gives the ailing fossil fuel industry an additional support.
That’s what initially drew Michael Brune, former executive director of the Sierra Club, to the campaign: A fear that the growth of Bitcoin could be a boon for the fossil fuel sector at a pivotal moment in the transition to renewables.
“This is increasing carbon pollution at a time when we need to be racing to decarbonize the entire economy," he told E&E News on Tuesday. "It's bonkers that this is actually happening."
Greenpeace U.S.A. special projects manager Rolf Skar told Motherboard he sees the campaign as a continuation of years of advocacy to reduce the carbon footprint of the tech industry, including recent campaigns to stop Microsoft, Google and Amazon from licensing artificial intelligence software to oil companies, and urging electronics manufacturers to
“Bitcoin, for a while, wasn't using all that much energy,” Skar said. “And that's changed in the last few years. It's really jumped off the page.”
Skar, for his part, isn’t encouraged by the argument put forward by crypto advocates like Ted Cruz that Bitcoin mining could facilitate the energy transition by incentivizing a renewables buildout. Wind and solar investments should, for now, be clustered around essential needs, like powering homes and hospitals, he said.
The campaign’s advocacy plans center primarily around advertising, at the moment. They plan to urge tech figureheads like Elon Musk and Jack Dorsey to push for a code change, for starters. “We know who wields influence over the crypto community, from big tech to big banks,” the website states, adding that “if only 30 people—the key miners, exchanges, and core developers who build and contribute to Bitcoin’s code—agreed to reinvent proof-of-work mining or move to a low-energy protocol, Bitcoin would stop polluting the planet.”
The problem with this plan, which many Bitcoiners pointed out, is that those figureheads don’t matter much in the world of Bitcoin. The thing is: Creating a new version of Bitcoin is easy. Motherboard created its own code fork, Bitcoin Max Horsepower, with a few clicks in 2018. The hard part is people.
There is no central authority controlling Bitcoin, and big changes to the protocol must be adopted by a large enough group of users and miners to be successful. And that’s far from a guarantee.
Besides miners, Bitcoin also depends on people running software (i.e. “full nodes”) on their home computers to confirm that mined blocks conform to the current protocol rules. Nodes can reject blocks that don’t conform to their chosen ruleset, meaning they can choose, at their own volition, to accept or reject a code change. If a critical mass of node operators accept the new protocol version, and miners create new blocks for it, the entire network will end up switching over to it. If node operators don’t accept the changes, then the Proof-of-Stake version of Bitcoin will be doomed to live a dimmed half-life as merely another less popular coin based on the original.
But many Bitcoiners are adamantly loyal to what they know works—swaying this crowd, even with $5 million in funding and all the climate science in the world, won’t be easy.
Bitcoin has already experienced a similar set of circumstances. Five years ago, Bitcoin was split in a fight over a technical change about whether to increase the size of blocks. A group of powerful players got together to sign a so-called “New York Agreement” to push the change, but it was ultimately unsuccessful as node operators pushed back en masse. The result was ultimately an altcoin forked from Bitcoin that currently goes by Bitcoin Cash SV, for Satoshi’s Vision, which poses no threat to Bitcoin’s dominance.
“Anyone who believes 50 miners and exchanges can force a change in Bitcoin’s code needs to read The Blocksize War by Jonathan Bier,” tweeted Jerry Brito, executive of D.C.-based think tank Coin Center, referring to a book about the saga.
Brune told Bloomberg, separately, that he’s ready to play the long game on this fight, and that he’s hopeful that a number of financial institutions that both offer Bitcoin trading and have made environmental commitments could be key allies—like Goldman Sachs and Venmo.
“We are in this campaign for the long haul, but we are hoping—particularly since Bitcoin is now being financed by entities and individuals who care about climate change—that we can compel leadership to agree that this is a problem that needs to be addressed,” Brune told the business wire. “There are lots of companies we anticipate will be helpful to this effort.”
Skar doesn’t have any illusions about how difficult this campaign will be, either.
“There's a lot of technical details to work out and yes, there's going to be people with strong opinions,” he said. “But that's the way it is on just about everything we need to do to tackle climate change. So welcome to the club, Bitcoin community. We all have a role to play.”