- Ripple states that XRP is 57,000 times more environmentally friendly than Bitcoin, making it a sustainable cryptocurrency.
- The high energy consumption of Bitcoin is due to the Proof of Work consensus mechanism and the necessity of mining.
Bitcoin has already been criticized in the past by Ripple CEO Brad Garlinghouse for its enormously 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, since enormous amounts of energy are consumed for the processing of transactions.
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….
XRP 57,000 times greener than Bitcoin
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 economy.
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).