One of the biggest threats that concern the people most in relation to Bitcoin is the amount of energy and this time it is been highlighted by one of the giants of the crypto market.
Yesterday co-founder and executive chairman of Ripple Labs; Chris Larsen, published a blog on Medium in which he, essentially, discussed the idea of potential shifting of cryptocurrencies from proof-of-work (pow) to proof-of-stake or Federated Consensus.
He argued that though the proof-of-work is brilliantly designed technology, it is outdated for today’s world. He stated that the outdated pow does not make any cryptocurrency outdated too, nevertheless “their widespread adoption speaks for itself”. But, to secure their ledgers, coins using the pow concept are needed to move on from the prototype concept to the one that would be well-suited for the environment, low in energy consumption, and also in the emission of carbon (which are two of the biggest threats that our climate is currently prone to).
He claimed that currently bitcoin uses 132 TWh (terawatts) annually and releases an estimated 63 million tons of Carbon each year too, which is already unsustainably high. He conceded that though other coins also use the pow concept the bitcoin solely utilizes the for 98% of all coins’ hash rate. He asserted:
“With more individual investors and corporations taking significant bitcoin positions — PoW is heading for levels society will find tough to tolerate as the world works to avert a climate disaster.”
Larsen further put forward XRP as an example as he wrote that XRP has been operating on Federated Consensus to validate transactions and secure its public ledger for the last nine years, which has helped them prevent the excessive energy use, and currently, he claimed, XRP merely uses energy which equals to the energy consumption of 50 US homes annually and it is already Co2 neutral too.
He also stated that Binance has been recently using a version of pos that has assisted the coin (BNB) to maintain the market cap at $80 billion and the Ethereum community, he praised, is also switching from pow to pos.
He stated:
“While PoS and Federated Consensus are slightly newer than PoW, these technologies are battle-tested and proven to be decentralized.”