When environmentalist groups in March unveiled a campaign to move Bitcoin’s code away from the energy-intensive proof-of-work (PoW) model, many bitcoiners scoffed at the idea.

Setting aside the question of whether proof-of-work mining is the environmental peril the activists claim it is, many cryptocurrency veterans doubt the strategy could work.

That strategy hinges on persuading a limited number of firms or people who, the campaigners claim, have the power to make the change or at least convince a critical mass of people to support it.

To old hands, this plan seems ignorant of Bitcoin’s history – specifically the block size wars of 2015-2017, including the debate over the Segregated Witness (SegWit) upgrade, in which one of two proposed alterations pushed by the biggest companies failed in the face of widespread user opposition.

The leaders of the campaign to “Change the code, not the climate” say they are aware of this history and even take it as a sign that change is indeed possible.

Interpreting Bitcoin history

The block size wars and the SegWit update “serve as a case in point” to show that “changes can be made,” Faber, senior vice president, Government Affairs at Environmental Working Group (EWG), one of the groups spearheading the campaign, told CoinDesk. Whether these changes come as “a hard fork or a soft fork,” they can indeed be made “when there's general consensus within the Bitcoin community,” he said.

Read more: What is SegWit?

Rolf Skar is a special projects manager at Greenpeace USA, an environmental protection organization that is part of the campaign. According to Skar, there are two key questions as to whether the network can change; first, whether it is technically feasible. The 2017 SegWit update “shows that it is, quite obviously, technically feasible to do so,” Skar said to CoinDesk. But, he added, the second question is “whether a proposed change could be supported enough to be adopted.”

“Despite skepticism,” the campaigners don’t see a good reason why enough support will not be eventually garnered, said Skar. “Solutions will need to be developed and tested to address valid concerns of the community. If effective solutions are not developed we understand that uptake of new code would be unlikely,” Skar said.

Considering how industries have scoffed at other environmental campaigns, such as electric trucks, which were initially ridiculed but then sales soared, a change away from PoW may not seem so impossible, according to the campaigners.

Ken Cook, founder and CEO of EWG, said that, based on his conversations with various insiders within the Bitcoin industry, he thinks Bitcoin’s governance has changed, such that there is now an “inexorable concentration of power and control.”

The “notion that this was as democratic as it was originally conceived is gone,” he said.

Skar similarly said of Bitcoin in an interview: “Although it's a decentralized system, there are key players within it.”

EWG’s Cook pointed to an October 2021 paper from the U.S. National Bureau of Economic Research, which found, “The top 50% of miners control almost all mining capacity. Top 10% control 90% and just 0.1% control close to 50%” and that “the largest 55-60 miners controlled at least half of all bitcoin mining capacity.”

Faber said that he doesn’t think the decision will literally be made by 50 people, but if leaders in the Bitcoin community “raise their voices, they can help start the conversation that could ultimately lead to the changes needed.”

Who controls Bitcoin?

A debate around how to improve the Bitcoin network’s scalability picked up steam in 2015. Some developers and stakeholders called for an increase to the size of blocks, whereas others thought that would harm decentralization.

After two years of controversy, an update to the Bitcoin network called Segregated Witness (SegWit) was adopted through a soft fork, meaning users could still keep running the old version of the software. SegWit increased the number of transactions the network could handle by changing the way data is stored on the chain. Unlike other proposals to increase the block size, SegWit enjoyed widespread user support.

Around the same time, another proposal to increase the block size met the opposite fate. An agreement was signed by 58 companies, representing 83.28% of the network’s computing power, in New York at CoinDesk’s 2017 Consensus conference. The agreement called for a doubling of Bitcoin’s maximum block size to two megabytes. Four of the companies were directly involved in mining, one of them being CoinDesk’s parent company, Digital Currency Group (DCG), which also owns U.S. miner Foundry. Another seven signatories were mining pools.

But, six months later, the supposedly powerful signatories backed down and called off the hard fork, or backward-incompatible code change, citing lack of sufficient consensus. Some big-block supporters started a splinter network called Bitcoin Cash.

Asked about the controversy around block sizes and the fact that some changes were never implemented, Skar said that “five years is a long time in Bitcoin’s relatively short history. Things are different now, as are the issues at hand.” It’s up to the people and players in the Bitcoin social ecosystem to determine how change will occur, he said.

SegWit was implemented because the Bitcoin community understood it was key to the network’s success, Faber said. Now, Bitcoin faces another threat: regulation, according to the EWG vice president.

For now, “the decision about how to reduce the electricity used by PoW and the resulting climate pollution is in the hands of the Bitcoin community. But only for the moment. Regulators are not going to stand by as the climate crisis grows worse and worse and digital currencies like bitcoin use more and more electricity, and produce more and more greenhouse gas emissions,” Faber said.

The challenge of changing Bitcoin by consensus

Even if it were possible, implementing a change to the protocol is not the whole story. Jonas Nick, a Bitcoin developer with Blockstream who was involved in another major protocol update that was implemented last year, known as Taproot, said that achieving a “rough community consensus” was an important step for the upgrade to be implemented.

But the key to changing Bitcoin is to convince “an overwhelming majority of economic activity on Bitcoin to use” the new code, Nick said. “You can always change the rules of chess, but you may have to play alone,” the developer said.

One measure of bitcoin’s decentralization is the number of reachable nodes that comprise the Bitcoin network. Since the end of 2017, the number of reachable Bitcoin nodes has increased by 27.5%. The blocksize wars indicated that users control the direction of the protocol, which means that more coordination is needed to be undertaken to make wholesale changes to the network.

Asked whether shifting Bitcoin away from PoW is possible, Nick said that the consensus in the Bitcoin community is that PoW “is the only known consensus algorithm that can power a decentralized currency.”

When Consensus 2022 kicks off Thursday, behind the scenes, a complex choreography of wallet identity checks and payment swaps will work to keep DESK, CoinDesk’s social token, circulating through a crowd expected to top 15,000 attendees. “This is probably the largest crypto media experiment so far. No organization of CoinDesk’s size has done it before,” said Jenil Thakker, CEO of Coinvise, a startup that builds tokenization and community experiences for brands, including CoinDesk. CoinDesk is rebooting DESK for this year’s Consensus – the media and events company’s first in-person conference since 2019 – in an effort to bring crypto-savvy conference-goers closer to the brand, while also getting hands-on with the tech.

Part experiment, part revamp, DESK will make its debut at the conference in Austin, Texas, Wednesday. There, it will (the organizers hope) become an airline miles-esque rewards program that Consensus attendees can earn by engaging with panels and talks, and then spend on anything from swag to drinks to non-fungible tokens (NFT).

“It’s a tokenized festival experience that’s designed to reward you for the depth of your engagement as you go throughout the festival,” said Luke Layden, CoinDesk’s program manager for DESK. “You will be rewarded for your curiosity.”

CoinDesk’s tech experiment brought on a litany of third parties to help make DESK sing. The token’s transactions will be fee-free using Biconomy, a firm that aims to simplify Web 3 for everyday users. Biconomy’s service allows third parties to pay on-chain computation, or gas, fees, on users’ behalf; in this case, CoinDesk is that third party footing the bill.

DESK will also have a dedicated marketplace for NFTs developed by NFTify; the token will exist as an in-conference payment option on Flexa’s transaction rails; and it emanates from a mint contract set up by Coinvise.

The vision for DESK

Conference cryptocurrencies aren’t entirely new. ETHDenver has for years given attendees iterations of set amounts of tokens as a form of a meal ticket. But CoinDesk’s vision for DESK is larger.

It starts with DESK’s acquisition experience. In-person conference-goers will start amassing the social token by checking in at various panels. It's sort of like a treasure hunt in which the booty gets better the more you pay attention to the map. DESK owners can turn their tokens into grub at food trucks, or swag at booths, or NFTs online.

“It’s just a matter of [the merchant thinking] ‘I want to accept crypto instead of cash,’'' said Trevor Filter, co-founder of Flexa, builder of DESK’s payments rails. “And so you just choose a different button with the point-of-sale terminal [where shoppers normally swipe a card] and then out comes the QR code for the customer to scan.”

Filter’s company will help the merchants accept DESK while still taking home cash they can use. For most cryptocurrencies, Flexa accomplishes this by swapping, say, the customer’s bitcoin for dollars that the merchant can deposit in their bank. DESK isn’t like most cryptos, however.

“Because there’s no public market or exchange that gives us a fair market value for those tokens,” Flexa has to work 'directly with CoinDesk' on the transaction, Filter said. “It’s the same that we would do with an airline miles provider, for example. This is the first time that we’ve made a conference token spendable on our network."

He sees the project as an “experiment” with upside. If it works well, he can use DESK as a proof-of-concept for pitching hotels and airlines on the evolution of loyalty points.

Origin of DESK

It’s not the first time a crypto thingamabob called DESK has reared its head at Consensus.

Last year, CoinDesk’s COVID-19-era ZoomCon gave DESK to virtual attendees. They too could use the engage-to-earn token on swag purchases and not much else. Built on the Rinkeby testnet, DESK 1.0 was at best crypto-lite: a tease at what CoinDesk conference coins could be.

The new DESK, by contrast, is a real-life crypto token. It lives atop the Polygon mainnet. It has an initial issuance of 5 billion. It was built following the ERC-20 token standard, and its holders – there are already nearly 6,000 – can do with their DESK as they please. So long as they don’t trade DESK on exchanges; that’s against the terms of service.

“Because it’s a non-monetized social token, DESK’s value does not come from its value on secondary markets,” Layden explained. “It comes from the value that we provide.”

CoinDesk’s value proposition for DESK holders is something akin to Disney Dollars: It has value within the brand ecosystem but is valueless everywhere else. Like airline miles, it rewards committed users with an alternative means to access in-house perks. Unlike airline miles, it lives on a public blockchain where transactions are irreversible and beyond the issuer’s control.

“It’s an experiment of ours to basically eat our own dog food and see the current state of blockchain tech,” Layden said.

CoinDesk is itself looking to DESK as a big bet, Layden said. He hinted at future potential integrations on the website and beyond. For now, the focus is on Consensus.

A new academic paper claims that Bitcoin (BTC) in its first two years was more centralized and fragile than has been widely recognized.

The cryptocurrency survived and thrived thanks to a small group of pioneers who chose not to attack the network when they easily could have, says the study, which was co-authored by nine researchers from six universities around the globe. (The academics’ names and affiliations are listed at the bottom of this article; one of them, Alyssa Blackburn, will speak at Consensus 2022 in Austin, Texas, this week.)

Bitcoin’s formative years thus offer an interesting window into cooperation between anonymous parties. “Anonymity can interfere with the cooperative mechanisms of reciprocity, relatedness and reputation and is thus believed to reduce cooperation in general,” the paper notes. Yet counterintuitively, the data shows that even though 64 parties controlled most of the computing power during this era, they all acted in the best interest of the network. Even when they didn’t know each other.

To be clear: The study makes no concrete claims about the security of the Bitcoin network today, more than a decade after the end of the period analyzed.

“We sought to understand the socioeconomic process by which bitcoin transitioned from a digital object with no market, to a functional medium of exchange,” researcher Erez Lieberman Aiden told CoinDesk. “We therefore chose to study the period between launch and price parity with the U.S. dollar: the 25 months after Bitcoin's launch.”

Aiden noted that the forms of data leakage that the research is focused on were selected because of their usefulness in studying that defined 25-month time frame.

“In the end, we found that there was a lot of data leakage that we could exploit, which made our study possible,” he said. “Now, obviously Bitcoin has been through extensive changes since 2011! So some forms of data leakage may work less well now, and some may work better.”

On the other hand, he also noted that the project “was able to succeed because of a high degree of metadata leakage from the blockchain during the period we studied. There's no particular reason to believe that the data leakage is limited to the period of time we studied.”

Nevertheless, the paper, which the New York Times has covered, is likely to provoke heated discussions about longstanding challenges to Bitcoin network users’ privacy, given the novel address-linking techniques the researchers employed – and, more broadly, about the motivations that enable decentralized networks to function.