Post Ethereum-Merge, environmentalists call for Bitcoin to follow Ethereum's lead

Image: Shutterstock

As of September 15, the Ethereum blockchain has transitioned over to a PoS or proof-of-stake consensus algorithm, detaching itself from its previous PoW (proof-of-work) system. Now that Ethereum has shown the way, environmentalists are calling for Bitcoin to go through a similar transition. 

Reportedly, transforming the Ethereum blockchain into a PoS one has reduced its energy consumption by over 99 percent, and climate activists are claiming Bitcoin can do the same to fulfill its part in protecting the environment from the ‘harmful’ effects of mining. 

In a notice that came right after the Ethereum Merge took place, the US-based EWG (Environmental Working Group) stated that it would start a $1-million campaign to prompt Bitcoin into “going green” like Ethereum, and halt the use of an “outdated” system like PoW. As Micheal Brune, the director of the EWG campaign, says it: “Other cryptocurrency protocols have operated on efficient consensus mechanisms for years, … Bitcoin has become the outlier, defiantly refusing to accept its climate responsibility.”

The environmental activist group Greenpeace has also filed a petition at Fidelity Investments to facilitate the shift into a PoS system. 

Scott Faber, the EWG senior vice president of government affairs, thinks that the Merge was a good move towards environmental sustainability. As he says, the Merge essentially proves that changing the code is possible for older crypto assets: “The Merge proves that digital assets that rely on proof-of-work can change to proof-of-stake and use far less electricity… We’re hopeful that the Bitcoin community will follow Ethereum’s lead.”

Faber believes the regulators can not simply stand by and hope the best happens, and instead they need to take action as early as possible, what with the climate crisis. He also says that he would support any rules laid out by the White House to set energy standards that affect crypto miners. 

Meanwhile, some industry leaders have actually spoken out against Bitcoin’s potential transition to PoS. Their reasons include the security factor and the possibly negative effect on the Bitcoin blockchain’s decentralization. As MicroStrategy co-founder Michael Saylor stated, PoW is the “only proven technique for creating a digital commodity” like Bitcoin. He further said that regulators and legal experts have already said many times that PoS crypto assets are more like securities than commodities, and while “PoS Crypto Securities may be appropriate for certain applications, but they are not suitable to serve as global, open, fair money or a global open settlement network. Therefore, it makes no sense to compare proof-of-stake networks to Bitcoin.”

Many lawmakers from across the globe- including countries like the US and China- have targeted Bitcoin mining over the years. While their environmental concerns may be valid, the point still stands that PoW has created a decentralized monetary system that has proven to stay strong for over a decade now, and PoS has a long way to go to prove its abilities to that extent yet.

Shashank is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash