XRP 57,000 times greener than Bitcoin
Brad Garlinghouse, CEO of Ripple, has criticized Bitcoin for its high energy consumption during mining. Now, Ripple points out in a new blog post that the real problem is the Bitcoin Proof of Work (PoW) consensus mechanism, as it takes a lot of energy to process transactions. According to Ripple, XRP is 57, 000 times more environmentally friendly than Bitcoin, making it a sustainable cryptocurrency. Bitcoin’s high energy consumption is due to the work of proving consensus mechanisms and the necessity of mining.
The PoW algorithm is used by Bitcoin to
validate transactions. In order to process the transactions, enormous power
capacities for mining are required 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 new, powerful miner can cost as much as
$6,000 per year.
A study carried out in 2018 showed that
hundreds of thousands of mining devices consume the same amount of electricity
as Ireland within one year. Currently, Bitcoin’s estimated energy consumption
per year is just under 60,890 TWh and has fallen from 77,207 to the new level
since the halving in May this year.
Bitcoin consumes as much electricity as
Chile does per year. According to Digiconomist, Bitcoin’s carbon footprint is
36.95 million tons of CO2, comparable to New Zealand. According to the report,
after the all-time high in 2018, energy consumption initially dropped
significantly, but then rose sharply again (freely translated):
(…) when the Bitcoin bubble burst in 2018, sending prices tumbling from a high of almost $20,000 (£15,600) at the end of 2017 to below $4,000 (£3,135), consumption also crashed and has only recently started soaring again….
Ripple argues that XRP is a sustainable and
“green crypto currency” because the entire XRP supply already exists and does
not have to be produced by mining. Therefore no additional energy is needed,
far from the energy needed to process transactions. According to Ripple, the
unsustainable mining practices of Bitcoin and Ethereum are a major obstacle to
the adaptation of crypto currencies into the mainstream.
If one million transactions were processed
with XRP, 79,000 light bulbs could be supplied with electricity for one year.
With Bitcoin, more than 4.51 billion light bulbs could be powered for one year
per 1 million transactions. Ripple therefore states that XRP is 57,000 times
more efficient in terms of energy consumption and thus more environmentally
friendly than Bitcoin. The high energy consumption is a major problem that
needs to be solved for a far-reaching adaptation:
Energy consumption is a critical side
effect of the blockchain, and as we see greater adoption and use of this new
technology throughout the global financial system, this is an issue that needs
to be addressed to ensure a sustainable future for our planet and the global
XRP price increases 14% in 7 days
The XRP price has risen by more than 14 %
to USD 0.2047 within the last 14 days, thus showing a significantly better
performance than BTC (+1.81 %) and ETH (+ 6.44 %). The market capitalization
has risen to $9.06 billion and is thus not far from Tether ($9.79 billion).
Author : Collin Brown