The chairman of Ripple has introduced new Bitcoin mining proposals that will transaction the crypto mining process to a more eco-friendly one. This statement came as Bitcoin prices crashed, with $500 billion worth of crypto being wiped off the market in the past week.
Bitcoin has been criticized in recent years over the high-energy consumption of Bitcoin mining activities. The energy consumed during the mining process is also expected to grow as the crypto prices also surge.
Over the past year, the price of Bitcoin has increased by almost 500%. However, the recent price fluctuations in the past week have pushed Bitcoin prices down, with over $500 billion being wiped off the crypto market cap following the market crash.
Proposal for Bitcoin to embrace PoS
The competition among cryptocurrencies has pushed some developers to shift to mining methods that are fast and efficient. Ripple’s co-founder, Chris Larsen, has urged Bitcoin to follow the trend and shift to eco-friendly models. According to Larsen, the shift will enable Bitcoin to maintain its dominance in the market.
Bitcoin’s mining process currently depends on a proof-of-work system that uses high amounts of power. Miners use energy to validate transactions and calculate the hash rate for which they are paid with Bitcoin.
Ethereum, the second-largest cryptocurrency, is launching the Eth2 upgrade, which is expected to switch to a proof-of-stake model. This upgrade will reduce the mining fee and transaction fees as miners will be removed from the blockchain.
Ripple’s XRP uses, the fourth largest cryptocurrency in terms of market cap, uses a federated consensus model to verify transactions and secure its ledger. Larsen pointed out that a change by Bitcoin was paramount given the effects that Bitcoin mining has on the climate. Larsen stated that the average annual energy used by Bitcoin for mining is 123 TWh, which can power 12 million U.S. homes. Bitcoin mining also emits 63 million tonnes of CO2 each year.
Bitcoin’s causing environmental damage
Chris Larsen is not the only major player who has pointed out the immense energy consumption by Bitcoin. Bill Gates recently stated that Bitcoin was not suitable for the climate, while Janet Yellen, the U.S. Treasury secretary, stated that Bitcoin’s energy consumption was astonishing.
However, the Bitcoin community has strongly refuted the claims that Bitcoin is bad for the environment. Recently, two prominent crypto supporters, Ark Invest and Square, released a white paper showing how Bitcoin mining can benefit the renewable energy sector. According to the whitepaper, relying on solar and wind energy for Bitcoin use will enhance the renewable energy sector, which struggles with balancing demand and supply.