The Environmental Myth Of Proof Of Stake

This is an opinion editorial by Level39, a researcher focused on Bitcoin, technology, history, ethics and energy.

The notion that Ethereum’s recent “Merge,” from proof of work to proof of stake, reduces energy consumption by 99.95% is a myth. Nevermind that this calculation excludes expensive enterprise server farms, corporations and the increased work involved in completing proof of stake transactions on a global scale. Follow the money — the cost to make a transaction has not plummeted. Fees aren’t expected to decrease, and any part of the security budget that was previously used to purchase energy for machines will instead be used to purchase energy for Ethereum’s ruling class — negating much of its lower energy bill.

Unlike proof of work, which fosters renewable energy innovation and reduces waste methane emissions, there is no environmental advantage to proof of stake other than that it obscures the energy purchases made by the people that enable its validating infrastructure. The environmental myth of proof of stake is underscored by a neo-Luddite belief that replacing inefficient humans and their infrastructure with economical and energy-intensive machines is a net negative — an ideology that harkens back to the early days of the Industrial Revolution.

The Age Of Luddites

During the Luddite Rebellion (1811 to 1816), Ned Ludd inspired a movement of highly-skilled English textile workers to resist modernization and destroy a particular kind of mechanized textile machine that would be “hurtful to commonality.” Commonality referred to the common good, as in the tradition of the commons. The machines were seen as a threat to communities and the jobs that were destined to become obsolete. These new textile machines could work harder, faster and cheaper than any group of skilled artisans. It was feared that the machines would also lead to mass unemployment in the community and further unequal power relations. The Luddites protested this technological advancement, sabotaged the machinery and attacked its owners.

Source: Penny Magazine, 1884

Over time, Luddite fears were proven wrong. Mechanized technology would not destroy employment. On the contrary, it freed up humans to do more productive and creative things with their time. The vast increase in raw materials translated into even more work for creating increasingly elaborate and cost-effective products. Economic energy-powered technology improves living standards, increases wealth and offers more opportunities for employment.

Benefits From Automation

Automating human effort with energy-intensive machinery is an age-old practice. In 1582, the English merchant fleet had a carrying capacity of 68,000 tons and required 16,000 sailors. Commercial fees were used to purchase energy by way of acquiring food, ale, clothing, heat and medicine for tens of thousands of sailors and their families. Security, efficiency, safety and reliability were common issues for these fleets.

Today, global shipping uses energy-intensive machines but involves relatively very few humans. The container ship OOCL Hong Kong was the largest container ship ever built, at the time of its 2017 delivery, and can carry 200,000 tons while requiring a crew of only 22. Rather than sourcing power to sustain populations of sailors, we build machines that burn energy and liberate humans from mundane and mechanical tasks. This allows humans to do more productive tasks, which in turn unleashes human flourishing.

Modern, energy-intensive container ships are orders of magnitude more efficient and reliable than the merchant fleets of the Middle Ages. It would be thoughtless to assume container ships are wasteful simply because they use more energy than sailing ships. Machines, while energy intensive, replace the energy-intensive requirements of humans who are better suited to do other tasks.