Brad Garlinghouse, chief executive officer of financial technology company Ripple, is a Bitcoin investor despite his belief that the leading cryptocurrency is a wasteful energy hog.
But that doesn’t mean he thinks the king of crypto is perfect. In a new tweet, Garlinghouse says the amount of energy consumed by the Bitcoin and Ethereum networks is a mind blow.
Energy consumption for BTC and ETH mining is a massive waste and there’s no incentive to take responsibility for the carbon footprint. Absolutely 🤯 that this isn’t high on the agenda for the growing climate crisis… https://t.co/psR77m78Ua
— Brad Garlinghouse (@bgarlinghouse) March 4, 2020
Garlinghouse cites an article from The Telegraph that tackles the amount of energy used in Bitcoin transactions. According to the report, the amount of energy needed to run the cryptocurrency is now comparable to the electrical consumption of Chile.
“The carbon footprint of a single transaction is the same as 780,650 Visa transactions or spending 52,043 hours watching YouTube, according to calculations by Alex de Vries, a blockchain specialist, at PWC.”
In response to Garlinghouse, Gabor Gurbacs, digital asset strategy director of investment management firm VanEck, says the energy Bitcoin uses is necessary to sustain a secure and decentralized network. He also notes that it’s not just the cryptocurrency industry that consumes large amounts of energy, but also the network of banks, and payments firms that act as financial middlemen around the world.
1. Mining energy consumption is a necessary feature (not a bug) for #Bitcoin's POW consensus algorithm which makes Bitcoin secure, permissionless and decentralized.
2. Banks and payments firms use huge amounts of energy.
3. Let's not green-wash things. https://t.co/IBETWyUDoY
— Gabor Gurbacs (@gaborgurbacs) March 4, 2020
Ripple owns more than half of the total supply of the third-largest cryptocurrency by market cap, XRP. The digital asset is far greener than Bitcoin, but debates on how decentralized it is have raged for years, considering Ripple’s control of more than 50 billion coins. The total supply of XRP is just shy of 100 billion.
Despite concerns and criticism, a recent research paper from digital asset management firm Coinshares shows that most of the energy Bitcoin consumes comes from renewable sources.
“Bitcoin mining is mainly located in global regions where there are ample supplies of renewable electricity available.
We calculate a conservative estimate of the renewables penetration in the energy mix powering the Bitcoin mining network at 74.1%, making Bitcoin mining more renewables-driven than almost every other large-scale industry in the world.”
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