Ripple founder Chris Larsen wants to make Bitcoin greener – Bitcoin supporters sense a double game

• Chris Larsen was at times the fifth richest man in the world
• Ripple founder Larsen now interested in greener Bitcoin
• Larsen is met with harsh criticism from Bitcoin entrepreneurs

CoinDesk recently reported on Chris Larsen’s latest $5 million investment in an advertising campaign that advocates for a greener way of creating Bitcoin. The announcement of this donation provoked heavy criticism – but why? A look at his CV is essential for this.

Larsen: Founder of Ripple with a dubious reputation

Silicon Valley veteran Larsen was considered the richest man in the crypto world for several years. According to data from Forbes, during the huge surge in Ripple coin XRP in early 2018, his wealth peaked at $59 billion – briefly making the crypto investor the fifth richest man in the world. But the significant drop in the price of Ripple coins, of which Larsen owns a large proportion, caused his fortune to melt away. Forbes currently estimates his fortune at around $2.5 billion.

Larsen founded several fintech companies and invested in many startups. But he is best known for founding Ripple Labs Inc. in 2012. In addition to the digital coin XRP, Ripple’s goal was to become a widely recognized digital peer-to-peer payment network based on blockchain technology. While XRP is still the eighth largest cryptocurrency in the world according to data from “CoinMarketCap” with a total volume of 37.3 billion US dollars (as of April 06, 2022), the peer-to-peer payment network was significantly less successful. In October 2021, Larsen also came into the crosshairs of the US Securities and Exchange Commission, as Ripple is said to have sold unregistered securities in the form of XRP tokens and in this way raised 1.3 billion US dollars.

Larsen supports greener Bitcoin ad campaign

According to CoinDesk, Larsen supports an advertising campaign with the motto “Change the code, not the climate” in cooperation with Greenpeace and other environmental organizations. The goal of the project, to which Larsen donated $5 million, is to raise awareness among the Bitcoin community about the massive amount of energy needed to generate the world’s largest cryptocurrency. The concrete solution proposed by Larsen and Co. is that the bitcoins are no longer generated using proof-of-work mining, which is considered to be secure but is very energy-intensive. Instead, the much more environmentally friendly proof-of-stake process is to be used for Bitcoin. However, this idea is not universally welcomed.

A majority of Bitcoin investors are opposed to switching to proof-of-stake methods

On the contrary: Many consider such a momentous change to be “extremely risky, completely impractical, perhaps even pointless,” according to David Morris in a “CoinDesk” article. Such a fundamental change can probably not be realized through a conventional “hard fork” (a split in the blockchain due to disagreements between the programmers), as was the case with the splitting off of bitcoin in August 2017 into the classic bitcoin and bitcoin cash as a result of the controversial upgrade was the case with the SegWit protocol extension. Rather, a switch to the proof-of-stake variant would probably lead to significantly more violent disputes. The proof-of-stake infrastructure runs over a completely different security architecture, so adapting this method would involve a complex switch from old wallets to a completely new network.

Such a program change seems extremely unlikely at the moment. The well-known Bitcoin enthusiast with the pseudonym Gigi wrote on Twitter: “Proof of Stake is not only more insecure, but completely pointless and insecure. Without PoW [Proof-of-Work, Anmerk. d. Red.]every system becomes political, conflict resolution is shifted to a quorum.” Nor is Larsen likely to receive any encouragement from the numerous Bitcoin miners who are investing millions of dollars in highly specialized chips called ASICs (application-specific integrated circuits) that are the proof-of In short, convincing the entire Bitcoin community to switch to proof-of-work is likely to be an “almost impossible task,” according to David Morris.

Industry experts are skeptical

The proposal is particularly unpopular because Larsen is an extremely controversial person in the cryptoverse. Many Bitcoin fans accuse him of having aimed his entire crypto career at harming Bitcoin – therefore they do not trust the apparently benevolent intentions regarding his initiative for greener Bitcoin. Some critics specifically complain that Larsen intentionally wants to bring about a “hard fork” in order to split the Bitcoin community and thus weaken it – especially since the world’s largest reserve currency can score with enormous network effects thanks to its international acceptance and security. Matt Walsh, manager of bitcoin company Castle Island Ventures, sneered on Twitter: “America… the only country in the world where you can offload billions of unregistered securities used for retail investors like Fidget Spinner [Handkreisel, vgl. Logo von Ripple, Anmerk. d. Red.] look, and then use the proceeds to educate actual entrepreneurs about their bitcoin businesses” – an obvious reference to Larsen.

America… the only country in the world where you can make billions dumping unregistered securities that look like fidget spinners on retail investors then use the proceeds to lecture actual entrepreneurs on their bitcoin businesses

– Matt Walsh (@MattWalshInBos) March 29, 2022

But Larsen defended himself in a “Bloomberg” interview against the vehement criticism from the Bitcoin community: “If I were worried about Bitcoin as a competitor, it would probably be the best thing I could do to continue on this path leave… It’s just an unsustainable way.” However, it remains to be seen whether the campaign supported by Larsens will have the desired effect.

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