Bitcoin has already been criticized in the past by Ripple CEO Brad Garlinghouse for its extremely high energy consumption for mining. Now, in a new blog post, Ripple states that the real problem lies in Bitcoin's Proof of Work (PoW) consensus mechanism, as huge amounts of energy are consumed for transaction processing.
The PoW algorithm is used by Bitcoin to validate transactions. In order to process transactions, huge energy capacities for mining are needed to mine new Bitcoins. Ripple describes that an application-specific device, an ASIC miner, has an environmental cost of $ 1,500 per year for mining, and a powerful new miner can cost up to $ 6,000 per year.
A 2018 study found that hundreds of thousands of mining devices consume the same amount of electricity as Ireland in a year. Currently, Bitcoin's estimated annual power consumption is slightly less than 60,890 TWh and has gone from 77,207 to the new level since halving in May this year.
Source: https://digiconomist.net/bitcoin-energy-consumption
Bitcoin consumes as much electricity as Chile per year. According to Digiconomist, Bitcoin's carbon footprint is 36.95 million tonnes of CO2, comparable to New Zealand. According to the report, after the historic peak of 2018, energy consumption initially dropped significantly, but then increased sharply again:
(…) When the Bitcoin bubble burst in 2018, causing prices to drop from a peak of nearly $ 20,000 (? 15,600) at the end of 2017 to less than $ 4,000 (? 3,135), consumption also collapsed and only started to skyrocket recently.
XRP 57,000 times greener than Bitcoin
Ripple argues that XRP is a sustainable "green cryptocurrency" because the entire XRP offering already exists and does not have to be produced by mining. No additional energy is therefore required, far from the energy necessary to process transactions. According to Ripple, the unsustainable mining practices of Bitcoin and Ethereum are a major obstacle to the adaptation of cryptocurrencies to the mainstream.
If one million transactions were processed with XRP , 79,000 bulbs could be supplied with electricity for a year. With Bitcoin , more than 4.51 billion light bulbs could be powered for a year for 1 million transactions. Ripple therefore claims that XRP is 57,000 times more efficient in terms of energy consumption and therefore more environmentally friendly than Bitcoin . The high energy consumption is a major problem that must be resolved for a large-scale adaptation:
Energy consumption is a critical side effect of blockchain, and as we see increased adoption and use of this new technology across the global financial system, it is a problem that needs to be addressed to secure a future sustainable for our planet and the global economy. .
