Not content with fighting the American regulatory Securities and Exchange Commission over the nature of the XRP token, the heads of Ripple have picked a fight with bitcoin (BTC) advocates – attacking the Bitcoin network’s often-maligned proof-of-work (PoW) consensus mechanism.
In an interview with TechRadar, the Ripple Chief Technical Officer David Schwartz claimed that the PoW has been touted as a “secret sauce” but showed “cracks” right from the outset, adding that the design of the Bitcoin PoW consensus mechanism was “such that true decentralization and disintermediation was never a possibility.”
“A cryptocurrency should be a one-sided market; the users want a store of value and a means of exchange. But what Bitcoin did was turn it into a two-sided market. Miners have historically fought for high transaction fees, because that’s their revenue. The reality is that you have another set of stakeholders who are trying to charge the highest fees they can get away with, and that’s not much different from the way payments work at a bank.”
The media outlet quoted Schwartz as stating that bitcoin was “doomed to fail its most important mission: to deliver a system whereby people can transact freely with one another, without the involvement of any intermediary.”
Meanwhile, the Ripple CEO Brad Garlinghouse also questioned Bitcoin’s carbon credentials.
He conceded that BTC was “an exceptional store of value,” but attacked its payment potential, writing,
“It’s just not ideal as a payments mechanism [because] of PoW energy costs/carbon dioxide emitted – estimates show a weighted average carbon intensity of 480-500 [grams of carbon dioxide equivalent] per kWh.”
“It’s great to see more and more individual players taking action to address climate change/use renewables for mining, but we need consensus (no pun intended) across the entire industry to make all cryptos 100% renewable,” he added.
Bitcoin defenders reacted with incredulity, with one observer quipping in a Twitter reply,
“So when will legislators/authorities utilize carbon-neutral tech such as XRP to facilitate instant, cross-border payments?”
Bitcoin critics have repeatedly attacked the network’s PoW model, with much evidence to suggest that a number of powerful mining pools rely on cheap, arcane and highly polluting coal-powered energy stations in China and elsewhere.
But even from the outset, defenders – including founder Satoshi Nakamoto himself all the way back in 2010 – have sought to justify PoW and its energy usage model.
And late last month, Lyn Alden, the founder of Lyn Alden Investment Strategy defended PoW and the Bitcoin network, pointing out that Bitcoin’s “total energy usage is determined primarily from market capitalization and difficulty adjustments, not transaction volume” – which means that “marginal bitcoin transaction/spending choice has virtually no impact on” the network’s total energy usage.
She added that much of the energy now being used in BTC mining was now coming from renewable sources and concluded,
“A lot of energy concerns directed at Bitcoin start with the presupposition that it is useless. A trillion dollars in market cap disagrees. Little concern is given to worldwide washing machine energy usage, for example, because we understand the value.”
At the time of writing (08:32 UTC), BTC trades at USD 59,256 and is up by 3% in a day and 13% in a week.
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