Ripple co-founder Chris Larsen is once again pushing for Bitcoin to ditch Proof-of-Work for something more “green,” but still hasn’t put forward a viable suggestion for how it should be done.
It’s Larsen’s latest effort to inspire Bitcoin to switch to a less energy-intensive consensus algorithm. Larsen wants to buy ad space in a number of big-name publications to propel the idea.
The former Ripple Labs chief exec says he has support from climate activist groups, including the Environmental Working Group and Greenpeace.
The crux of Larsen’s message is that Bitcoin could easily move to a more sustainable model. That’s if those with the power — primarily Bitcoin miners and other node operators — were incentivized to do so.
However, given this isn’t the first time Larsen has tried to influence how the world’s leading crypto works, it’s odd that he still hasn’t done the one thing you’d expect: submit an official Bitcoin Improvement Proposal (BIP).
Bitcoin Improvement Proposals aren’t rocket science
What makes Larsen’s inaction particularly puzzling is the fact that submitting a BIP is a relatively simple process.
Bitcoin is an open source system, meaning that anybody — whatever their standing in the community — can submit one.
- BIPs start as informal suggestions that bounce around community forums.
- If and when they gain support, ideas are assigned an official BIP number and graduate to the Bitcoin Core GitHub BIP repository.
- The proposal is then discussed by developers and community members and any proposed changes to Bitcoin’s code are tested.
Of course, any major objections raised by the Bitcoin community — in this case there are loads — would see the proposal scrapped completely.
However, should an idea have merit, the Bitcoin network organically decides exactly how to move it forward with decentralization in mind.
Larsen instead seems more content to throw his money behind a politically-charged marketing campaign that boasts little utility beyond attracting headlines.
Instead of submitting a BIP, Larsen appeared on Bitcoin influencer Anthony Pompliano’s widely distributed podcast to raise awareness about the “environmental impact” of Bitcoin’s Proof-of-Work algorithm.
Larsen opened with an admission that “Proof-of-Work is brilliant, no doubt about it.” He recognized that Bitcoiners do not support a complete change of Bitcoin’s algorithm.
Nevertheless, he believes that Proof-of-Work could be hard-forked to create a “carbon neutral, or even net negative” version of Bitcoin. Larsen purported that someone can somehow accomplish all this without sacrificing security.
He clarified that the $5 million he donated came out of his own fortune and not Ripple’s funds.
- Larsen advocates changing Bitcoin’s algorithm from Proof-of-Work to Proof-of-Stake (this would require a non-backwards compatible hard fork).
- He alleges that changing Bitcoin’s algorithm could somehow reduce Bitcoin’s energy usage by 99.9%. When pressed for details, he admitted that he has no idea how this could be accomplished. He simply believes that someone in the world could somehow invent this methodology.
- In a summary of the podcast episode, Pompliano said he disagrees with Larsen. According to Pompliano, Larsen misses some details surrounding the amount of energy used for Bitcoin mining.
Pompliano also disputed Larsen’s claim that Bitcoin mining uses as much as 0.4% of the world’s electricity. The Bitcoin Mining Council has found the network consumes 0.14% of global energy output.
The podcaster also criticized Larsen’s decision to fund an awareness campaign rather than fork Bitcoin’s code himself.
Is it possible Larsen doesn’t actually care about Bitcoin?
There are those who think there’s actually a very good, very simple reason for Larsen’s reluctance to submit a BIP: his Bitcoin meddling is nothing but a cynical PR stunt.
Those critics may have a point. After all, it would likely benefit XRP if Bitcoin were more centralized; powered by a smaller group of block producers akin to XRP’s 35 trusted validators (of which Ripple controls six).
Since late 2020, Ripple’s XRP token has been embroiled in a bitter war with the Securities and Exchange Commission (SEC).
The SEC effectively sued Ripple and its execs for raising more than $1 billion via an unregistered, ongoing digital asset securities offering through sale of its XRP token.
The regulator claims that XRP’s centralized nature makes it a security. To not register XRP with the SEC violates US securities law, so goes the ongoing case.
US finance regulators consider Ripple rivals Bitcoin and Ethereum to be decentralized, and therefore not subject to the same regulations.
Larsen himself maintains that he doesn’t want to destroy Bitcoin to amplify Ripple. He’s insisted that he “wants Bitcoin to succeed” and claimed he owns Bitcoin.
“If I was concerned about Bitcoin as a competitor, probably the best thing I could do is let it continue on this path,” he said (via Bloomberg). “This is just an unsustainable path.”
Crypto insiders blast Ripple exec’s anti-Bitcoin mining campaign
Other crypto insiders accused Larsen of hypocrisy. Castle Island Ventures’ Carter simply asked how much fuel Larsen’s jet used in the past year.
Larsen responded by saying that he purchases direct carbon air removal credits in Iceland to offset his globetrotting lifestyle.
Carter pointed out that Greenpeace’s promotional campaigns rely on debunked modeling for Bitcoin’s energy usage.
Messari’s Ryan Selkis went harder, telling his followers that “the Ripple execs are scum” and that Larsen “in a just society would be in jail for the bad faith investor misrepresentations he and his team made regarding their XRP sales.”
University of Cambridge research published last year showed that 66% of Bitcoin’s energy usage in North America came from renewable energy sources, but that figure dropped to 40% when looking at Bitcoin’s global usage.
Bitcoin miners have a history of seeking inexpensive energy sources, including renewable sources like hydropower, off-peak (nighttime) energy, stranded energy, wasted natural gas, and abandoned mines.
CNBC reported last July that the shifting locations of Bitcoin mining activity might help reduce Bitcoin’s carbon footprint as Bitcoin participants escape countries like China, which still sources much of its energy from fossil fuels.
University of Cambridge data suggests that the US increased its share of Bitcoin’s hashrate to as much as 35% in the wake of China’s latest mining crackdown.
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