#892 Bitcoin & Climate Change w/ Chris Larsen

— Chris Larsen, co-founder of Ripple, is funding a $5 million ad campaign called "Change the Code, Not the Climate" that advocates for modifying Bitcoin's proof-of-work consensus mechanism to reduce energy consumption.

— Both speakers agree decentralized digital currencies solve real problems in legacy finance and that Bitcoin must remain secure, but disagree on whether the current energy consumption trajectory is sustainable or acceptable.

— Larsen argues Bitcoin's energy use will reach approximately 1% of global end-user electricity in five years if current trends continue, creating a breaking point for institutional adoption and regulatory tolerance.

— The campaign focuses on awareness-building and inspiring developers to innovate within proof-of-work rather than forcing a specific code change; Larsen emphasizes 50 "influential" miners, exchanges, and developers could convince the broader community, similar to the block size wars.

— Larsen contends the code currently incentivizes cheapest energy (often fossil fuels) rather than renewables, and advocates for proof-of-work modifications that could make mining carbon-negative or at least climate-neutral.

— Both agree markets are self-correcting but differ on whether Bitcoin's growth trajectory poses an unacceptable climate risk requiring proactive intervention before the market corrects it.

— Monitor how major miners, exchanges, and institutional custodians (Fidelity, BlackRock, etc.) respond to climate narratives; their adoption or rejection of modified proof-of-work mechanisms may determine Bitcoin's long-term regulatory and social license.

— Understand that Bitcoin's energy consumption is decoupled from transaction volume due to layer-two scaling (Lightning Network), meaning more users and transactions do not proportionally increase energy use—a key counterargument to Larsen's consumption growth projections.

— Consider the distinction between renewable energy adoption by individual miners (66% for Bitcoin Mining Council members) and protocol-level incentives; without code changes, the protocol will always favor the cheapest energy source, regardless of climate impact.