Mozilla stops accepting cryptocurrency, Wikipedia may be next: Are dominos falling?

Mozilla announced a donation pause after co-founder Jamie Zawinski tweeted his opposition. Will more organizations follow suit and take the environmental impact of cryptocurrencies into account?

When the Mozilla Foundation took to Twitter on New Year’s Eve to announce it was going to begin accepting cryptocurrency donations, it likely didn’t think about potential blowback from one of its founders, but that’s what it got. In response, Mozilla has said it’s pausing cryptocurrency donations.

More about Innovation

In his blog, Mozilla co-founder Jamie Zawinski, writer of the original tweet, said he’s glad if he played even a small part “in getting them to rescind that terrible decision.” Zawinski has long been critical of blockchain technology and cryptocurrencies, making note on his blog of Bitcoin’s negative aspects as far back as 2013.

SEE: Artificial Intelligence Ethics Policy (TechRepublic Premium)

“Anyone involved in cryptocurrencies in any way is either a grifter or a mark,” Zawinski told me. “It is 100% a con. There is no legitimacy,” he said.

Suffice it to say, Zawinski has strong feelings about blockchain technology and the cryptocurrencies and NFTs that make use of it. He’s not alone in that sentiment, either: Shortly after Zawinski’s tweet and Mozilla’s change of heart, Wikipedia editor GorillaWarfare opened a request for comment on Wikimedia’s meta-wiki calling for the organization to stop accepting cryptocurrency donations, citing Zawinski’s tweet and Mozilla’s reaction.

Zawinski has read the Wikipedia talk page about the discussion and says he hopes it indicates the beginning of a trend. “I’m actually a bit surprised (and pleased) to see that the conversation seemed to be going in an anti-cryptocurrency direction. Good for them,” Zawinski said.

Why are people mad about cryptocurrency donations?

The original tweet from Mozilla mentioned three forms of cryptocurrency: the two main players, Bitcoin and Ethereum, and Dogecoin , all three of which use a system called proof of work (PoW) in order to add an entry to their respective blockchains. It’s here we find the first big sticking point: what Zawinski describes as “planet-incinerating” levels of energy use.

The proof of work problem has been known for a while, as has the ever-increasing carbon footprint of the Bitcoin and Ethereum blockchain, the cause of which is the growing energy needs of their PoW networks.

As of this writing, a single transaction on the Bitcoin blockchain eats up the same amount of energy as the average US household in a 77.8-day, or roughly two and a half month, period. Ethereum, though nowhere near as large, still eats up the same amount of energy that a US household does in eight days.

The Ethereum network originally proposed a move from proof of work to proof of stake (PoS), an alternative system by which owners of a currency stake their own holdings in order to act as blockchain validators. The move has been delayed more than once, with the Ethereum Foundation now planning for a shift in mid-2022. It remains to be seen if the deadline is met, or whether Zawinski is correct in his assessment of Ethereum’s plan: “Fox promises hen house upgrade real soon now.”

Are the winds shifting for cryptocurrency?

There’s been a global love affair going on with cryptocurrency in the past few years, and it’s arguable that it finally entered the zeitgeist in 2021 with the rise in popularity of NFTs.

As the concept of digital ownership moves beyond JPGs and into other industries like gaming and entertainment, it’s important to assess whether the advantages of growing these sorts of technologies outweigh their potential harms.

SEE: Metaverse cheat sheet: Everything you need to know (free PDF) (TechRepublic)

Mozilla isn’t the first organization to respond to concerns over the environmental impact of cryptocurrencies. Tesla CEO Elon Musk said that the company would stop accepting Bitcoin in May 2021, though he did say it was likely Bitcoin purchases of Teslas would return if the Bitcoin network shows more work toward renewable energy usage. Environmental charity Greenpeace announced it would stop accepting cryptocurrency donations in May 2021 as well, citing its energy usage as untenable in the face of climate change.

As PoW-based cryptocurrencies like Bitcoin and Ethereum continue to grow, their energy requirements will do so as well. 2021 brought both the potential and cost of cryptocurrencies into public consciousness, but we’re still in the early days. Organizations like Mozilla and Tesla may be the ones setting the agenda in the near term, but don’t expect governments to sit by for long.