Bitcoin is now facing the ire of climate groups for its increasing carbon footprint. Greenpeace has joined several other environmental organizations in pushing the network to cut its emissions in a new campaign.
The campaign is hoping to push Bitcoin to change the way transactions are verified in favor of a more energy-efficient and green option. Just to give you a rough idea of how energy-intensive Bitcoin is, the blockchain uses more energy per year than all the energy used to mine gold around the world.
Also, the total energy consumption by the Bitcoin network is higher than the entire annual consumption of Norway. It has also been reported that most of this energy is often fueled by fossil fuels which lead to massive greenhouse gasses. There have been a lot of innovations though to try to cut the carbon footprints associated with crypto. Most blockchains are using proof of stake validation mechanisms which use a fraction of the energy used by the Proof of Work model in Bitcoin.
There has also been a similar push by Ethereum to try and reduce its energy cost by migrating its network from a Proof of Work model to a proof of stake. It seems Bitcoin is about to face major pressure about its carbon footprint.
But how does Bitcoin use so much energy? Well, to better understand this, it's first of all important to know how the Bitcoin blockchain verifies transactions. The Bitcoin blockchain is a chain of computers that solve complex computer puzzles to verify transactions. These computers require a lot of processing power and energy to be able to do this. The reward for solving the puzzles is Bitcoin and this process is called mining.
The biggest challenge is that many computers engage in this puzzle-solving process and yet only some will be able to get that one single Bitcoin. It means that the energy used to mine just one Bitcoin is so high because the process is very inefficient. This is what is known as the Proof of Work consensus and many blockchains have been ditching it simply because of the high operational costs.
Greenpeace and other environmental groups see this as a huge threat since Bitcoin has become huge. As such, there is growing pressure for crypto and Bitcoin, in particular, to see what they can do to shift from the Proof of Work model to something less energy-intensive. But the biggest challenge is that Bitcoin miners have already invested heavily in the proof of work method.
It’s going to be very difficult to tell them to shift since this will mean that a lot of expensive tech infrastructure will become worthless. Also, the proof of work process is seen as the most secure way to verify transactions in the blockchain ledger.
This, therefore, means that there will be little incentive for Bitcoin fans to push towards a shift. Nonetheless, Greenpeace is trying to enlist big names in tech as part of its coalition against Bitcoin pollution. People like Jack Dorsey, the CEO of Twitter, have been mentioned as possible partners.