Ripple co-founder Suggests Changes to Proof-of-Work Model
Many business experts have gradually discussed sustainability and how the existing Bitcoin network can be tweaked to achieve better energy efficiency. With the introduction of cryptocurrencies into mainstream finance and as a viable asset class.
Although several market leaders have shifted to a proof-of-stake model, which is more energy-efficient and scalable, others continue to use the traditional proof-of-work model, which is the underlying consensus mechanism behind Bitcoin.
Chris Larsen, a co-founder of Ripple, addressed the issue and stated that it might be troublesome, especially given how Bitcoin has been appreciating and gaining popularity. If Bitcoin wants to “remain the world’s dominant cryptocurrency,” Larsen believes it needs to turn to a proof-of-stake or Federated Consensus model.
Larsen continues by reminding the crypto community that Bitcoin has evolved dramatically since its launch in 2009. According to the Ripple co-report, the founder’s Bitcoin absorbs an average of 132 TWh per year, which is approximately equal to the energy consumption of 12 million US homes.
It emits an estimated 63 million tonnes of CO2 per year, and Bitcoin accounts for 98 percent of the hash rate among coins using the proof-of-stake protocol. Meanwhile, Ripple uses a federated consensus model to verify its transactions and execute cross-border transfers with XRP to achieve crypto sustainability.
Recently, the fintech firm joined the Crypto Climate Accord, a group of crypto industry leaders including ConsenSys and CoinShares. They aim to advance the dialogue about creating solutions that improve the crypto sector’s sustainability and scalability while also generating value.
XRP was “designed with sustainability in mind,” according to a previous Ripple blog post, and the fintech company claims that the cryptocurrency is intrinsically green. Unlike Bitcoin, which has a finite supply that must be mined, all XRP has already been mined. So, no additional mining processes – which consume energy – would be needed to produce more.