Ethereum’s Shanghai Update Opens a Rift in Crypto

This ideological battle, and the strength of the animosity between bitcoin evangelists and their critics, means that it’s hard to have a nuanced discussion about the industry, and both sides have become entrenched in their positions.

According to de Vries, it would be perfectly possible, from a technical perspective, for Bitcoin to follow in the footsteps of the Ethereum network. “Bitcoin could move to PoS, no problem,” he says. “But it’s a social challenge.”

De Vries is often attacked by bitcoiners, who claim he is incentivized by his affiliation with central banking to criticize bitcoin, that his data is incorrect, and that he fails to account for the nuances in bitcoin’s relationship with the environment.

Bitcoiners have locked horns with environmental charities. On March 23, activists at Greenpeace unveiled an art installation named the Skull of Satoshi, an allusion to the pseudonymous creator of bitcoin, Satoshi Nakamoto. Standing 11 feet tall, the skull is decorated with old motherboards, its eye sockets glow red, and chimneys eject smoke from the crown. The installation was intended to represent the dual contribution of crypto mining to carbon emissions and e-waste, says Rolf Skar, campaign director at Greenpeace USA. But the skull was quickly appropriated by bitcoin supporters on Twitter, who described the skull as “metal” and “badass.” Some used it as a new profile picture. 

“The reaction was predictable, but disappointing,” says Skar. “It’s not surprising, but it’s a bad look to trivialize these very real issues.”

The artist that designed the sculpture, Benjamin Von Wong, bore some of the backlash too. On March 25, he published a Twitter thread saying that he had revised his “black and white” assessment after conversations with bitcoiners. But he also pointed to the forces standing in the way of productive debate: “There are people on both sides who believe the other is naively optimistic, misguided and misinformed,” he wrote.

The Skull of Satoshi, which is being taken on a tour of US cities, is part of a broader Greenpeace campaign called “Change the Code, Not the Climate,” the purpose of which is to push for changes in the Bitcoin code base that would reduce the network’s emissions. Skar says the intention is to prevent fossil-fuel plants from “roaring back to life,” courtesy of bitcoin, but Bendiksen calls the effort a “smear campaign.”

Both parties also accuse the other of bad-faith misrepresentations of facts and data. The Greenpeace campaign, Pritzker and Bendiksen say, is funded in part by Chris Larsen, founder of Ripple, a company with interests in promoting XRP, a cryptocurrency that was launched as a direct competitor to bitcoin. But by the same token, says Howson, arguments in favor of bitcoin mining are often founded on data supplied by the Bitcoin Mining Council, a coalition of mining companies led by Michael Saylor, CEO of MicroStrategy, a business with hundreds of millions of dollars invested in bitcoin.

The impasse is worsened by the ideological opposition to PoS among bitcoiners, separate from the environmental considerations. Some find unthinkable the idea of tampering with Satoshi Nakamoto’s original invention, and others, like Bendiksen and Pritzker, believe PoS introduces greater risk of centralization and censorship—and therefore represents a threat to crypto’s founding principles. “PoS is essentially the fiat system,” says Pritzker, “because whoever has the gold makes the rules.” For this reason, explains Bendiksen, bitcoiners will “never agree” to a shift.

“Any attack on bitcoin is an attack on their morality, values, and often their net worth. This makes everything feel personal,” Von Wong told WIRED. “Because most people don’t see themselves as intrinsically bad, they feel misjudged and misunderstood, which is a terrible place to start a conversation.”

The result is a situation in which both parties lob insults across the void but register none of the legitimate or well-intentioned complaints. Any morsel of information that might be used to discredit the opposition is also seized upon. And Von Wong worries about becoming a morsel himself.

“The hardest part about being in the center of a controversy is feeling like a chess piece,” he says. “I don’t feel like I can speak freely in public without someone, somewhere, taking what I say out of context and trying to leverage it against the opposite side.”