Foundation/Cryptocurrency Donations: Difference between revisions

Foundation/Cryptocurrency Donations (view source)

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publishing the decision and results of the review

Mdthorne

canmove, Confirmed users, Bureaucrats and Sysops emeriti

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 '''Summary: this wiki page provides an overview of activities related to Mozilla Foundation’s 2022 review of its cryptocurrency donations policy.'''
-== About ==
+As of April 2022, the Mozilla Foundation are updating our donation policy to:
+# no longer accept proof-of-work cryptocurrencies, as their design requires increasing amounts of energy over time;
+# accept cryptocurrencies that use technologies like proof-of-stake that are designed to use less energy.
+We will develop an implementation plan including a list of cryptocurrencies we will accept by the end of Q2 2022. This wiki provides a summary of the decision, the history of the review, and more details on next steps.
+'''Last edited: April 7, 2022'''
+== Overview ==
 Mozilla Foundation has been accepting cryptocurrency donations [https://blog.mozilla.org/en/mozilla/mozilla-now-accepts-bitcoin/ since 2014]. In Q4 2021, Mozilla Foundation released [https://twitter.com/mozilla/status/1475515332651634690 a tweet] requesting cryptocurrency donations as part of the regular end-of-year donation drive. This sparked a discussion online and internally regarding the environmental impact of cryptocurrencies, whether that fits within Mozilla’s mission and ethos, and the future of cryptocurrency donation at Mozilla.
 This conversation highlighted Mozilla’s need to assess the environmental impact of its cryptocurrency donations, especially in light of our [https://blog.mozilla.org/en/mozilla/mozillas-climate-commitments/ climate commitments].
-On January 6, 2022 Mozilla [https://twitter.com/mozilla/status/1479143340159422468 paused] the ability to donate cryptocurrency and announced on Twitter that it will conduct a review and commit to a transparent process with regular updates. The Mozilla Foundation plans to '''complete the review by the end of Q1 2022.''' See timeline below. This wiki provides a summary of the review so far and next steps.
+On January 6, 2022 Mozilla [https://twitter.com/mozilla/status/1479143340159422468 paused] the ability to donate cryptocurrency and announced on Twitter that it will conduct a review and commit to a transparent process with regular updates. The Mozilla Foundation '''completed the review by the end of Q1 2022.'''
+== Context ==
+While all cryptocurrencies -- and all computing -- use electricity and have an associated carbon impact, the level and impact is varied. The two main approaches to securely verifying cryptocurrency transactions on the blockchain have very different energy use patterns:
+[https://en.wikipedia.org/wiki/Proof_of_work Proof-of-work]: Proof-of-work cryptocurrencies like Bitcoin are energy-intensive by design. Validators (aka miners) use specialized hardware to verify transactions, essentially trading energy used by their hardware for tokens. “It’s a process called “proof of work,” in which the energy used is sort of the price paid to verify transactions. The process is deliberately energy-intensive as a safety measure. The baked-in inefficiency is meant to discourage bad actors from manipulating the data because it [https://www.theverge.com/2022/3/29/22999715/climate-change-bitcoin-drop-energy-hungry-software-code-proof-of-work would cost a lot of energy to do so.]”
+[https://en.wikipedia.org/wiki/Proof_of_stake Proof-of-stake]: Conversely, proof-of-stake cryptocurrencies verify transactions through financial collateral. A miner ‘stakes’ their own tokens as proof that the transaction is accurate. Ethereum, which is currently running both proof-of-work and proof-of-stake chains in parallel, [https://fortune.com/2022/03/23/ethereum-merge-bitcoin/ estimates] that a shift to proof-of-stake would lower their energy consumption by 99%.
+== Decision ==
+Our cryptocurrency donation policy review resulted in a decision for us to make a distinction between proof-of-work cryptocurrencies and cryptocurrencies using proof-of-stake and other approaches that use less energy by design.
+More specifically:
+'''1. Mozilla will no longer accept proof-of-work cryptocurrencies, which use increasing amounts of energy over time.'''
+ ''[https://blog.mozilla.org/en/mozilla/mozillas-climate-commitments/ Related Mozilla climate commitment]: Mozilla will significantly reduce its GHG footprint year over year aligning to, and aiming to exceed, the net zero emissions commitment of the Paris Climate Agreement.''
+Given the energy intensive nature of their design and technological process, accepting donations in proof-of-work cryptocurrencies has the potential to significantly increase our GHG footprint. While we currently do not receive very many cryptocurrency donations, almost all of the ones we do get use proof-of-work. We have decided not to accept proof-of-work donations in order to ensure that our fundraising activities remain aligned with our commitment to moving towards net zero emissions. This includes Layer 2 cryptocurrencies built on top of proof-of-work networks as they rely on the same underlying energy consumption patterns.
+'''2. Mozilla will accept cryptocurrencies that use technologies like proof-of-stake that are designed to use less energy.'''
+  ''[https://blog.mozilla.org/en/mozilla/mozillas-climate-commitments/ Related Mozilla climate commitment]: Mozilla will explore approaches to develop, design, and improve products from a sustainability perspective, including seeking collaborations to further amplify impact.''
+In addition to making the above commitment to ourselves, and within our own products, we encourage others in the technology industry to develop more sustainable products. We see increasing use of less energy intensive methods of verifying blockchain transactions such as proof-of-stake as a positive development. While there are still questions and issues to be solved related to the evolution of cryptocurrency, we believe that accepting less energy intensive currencies is in line with our climate commitments. We also believe we can play a positive role in the industry by encouraging those cryptocurrencies that we do accept to be transparent about their energy consumption patterns.
+== Next Steps ==
+In Q2 2022, we will develop an implementation plan including a list of cryptocurrencies we will accept as part of our fundraising. It will also include developing a method to highlight which of the cryptocurrencies we accept have provided transparent information about their energy consumption patterns.
+Furthermore, Mozilla will:
+* '''Address our historic climate responsibility from cryptocurrency donations received over the last three years.''' More specifically, Mozilla will use the social cost of carbon to set a budget to offset emissions from the last three years of cryptocurrency donations.
+* '''Review our donations policy in the context of our climate commitments at a minimum each year and continue to publish what we learn.''' This will include a regular review of research on the state of energy consumption transparency practices by major cryptocurrencies.
+* '''Explore the role that Mozilla’s movement-building strategy could play in encouraging more environmentally sustainable and socially beneficial approaches to cryptocurrency.''' This could increase openness and transparency in assessing the environmental impact of digital products and services and encourage the development of less energy-intensive transaction networks.
+We will provide further updates on this wiki as they are available.
-'''Last edited: March 23, 2022'''
+== Archive ==
 === Decision Options ===