Climate Groups Say Planetary Impacts of Crypto Mining Could Be Reduced by 99%

A simple switch in the way bitcoin is coded could reduce the power-hungry cryptocurrency's energy use by 99%, dramatically reducing its environmental impact.

"The 'currency of the future' is dragging us into the past when it comes to the urgent battle to save the climate."

That's according to a new campaign launched Tuesday by a coalition of billionaire-backed green groups aiming to "Change the Code, Not the Climate."

"The science is clear: To prevent runaway climate change, we need to start phasing out fossil fuels and investing in the clean energy economy," Greenpeace USA chief program officer Tefere Gebre said in a statement.

"No matter how you feel about bitcoin, pushing those with the power to ensure a code change will make our planet and communities safer from the destructive impacts of climate change," he added. "What we do have is a solution: Change the Code. Not the Climate."

The new effort is backed by Chris Larsen, the co-founder and executive chairman of ripple, a cryptocurrency and digital payment network for financial transactions. Larsen has contributed $5 million to fund the campaign's ads, which will appear on Facebook as well as in publications including MarketWatch, The New York Times, Politico, and The Wall Street Journal.

The campaign notes that bitcoin's software code--called "proof of work" (PoW)--requires massive computer arrays that use as much electricity annually as entire nations such as Sweden and the Netherlands. In order meet this ever-increasing demand for electricity, bitcoin miners are buying U.S. coal plants and striking deals with fossil fuel corporations to purchase flare gas, which is normally burned off, to power their operations.

The activists cite a 2018 study published in the journal Nature Climate Change that found continued wide adoption of bitcoin could alone produce enough carbon dioxide emissions to push planetary warming past 2degC within less than three decades. The landmark Paris climate agreement seeks to limit warming below 2degC and, ideally, no higher than 1.5degC.

Experts say that switching from PoW to "proof of stake" (PoS) or other more efficient means of validating cryptocurrency transactions would dramatically reduce energy consumption and greenhouse emissions. Bitcoin rival ethereum's blockchain network--where most non-fungible tokens (NFTs) are traded--is switching to proof of stake, a move expected to reduce energy use by 99%.

Larsen, whose ripple runs on neither PoW nor PoS, insists he is not targeting bitcoin, but noted in an interview with Bloomberg that "now with Ethereum changing, bitcoin really is the outlier."

Michael Brune, campaign adviser and former executive director of the Sierra Club, said in a statement that "we are calling on the bitcoin community to change to a low-energy code. This could mean switching to proof of stake, federated consensus, or even changing proof of work to use far less energy. We won't prescribe the exact solution, but we demand urgent action to save our climate and future."

Ken Cook, president of the Environmental Working Group, said that "the 'currency of the future' is dragging us into the past when it comes to the urgent battle to save the climate. Our planet can't afford bitcoin's excessive and unnecessary energy use and associated pollution."