Most cryptocurrencies like Bitcoin still use an energy-intensive mechanism known as proof of work. In September 2022 the rival cryptocurrency Ethereum switched from proof of work to proof of stake, which vastly reduces the amount of computational work and therefore energy involved in earning new coins. (Photos: Bitcoin: Komers Real, Flickr CC BY 2.0. Ethereum: Quote Catalog, Flickr CC BY 2.0)
Cryptocurrencies like Bitcoin can take a huge toll on electricity rates and the climate. That’s because “mining” cryptocurrencies typically involves massive amounts of computation, which takes lots of energy that’s mostly sourced from burning fossil fuels. But now there’s a far more efficient way to earn new coins if cryptocurrency managers decide to adopt it. Alex deVries is the founder of Digiconomist and a PhD candidate in Economics at Vrije University in Amsterdam and joins Living on Earth’s Jenni Doering to discuss.