Ripple co-founder proposes migration from proof-of-work to proof-of-stake consensus for Bitcoin

The energy requirements of the Bitcoin network are fueling so many debates in the crypto world, especially now amid growing climate change concerns. As the original cryptocurrency that started it all, Bitcoin uses a proof-of-work (PoW) consensus, which is considered to be the most secure and reliable of all the blockchains in existence. However, according to Ripple co-founder Chris Larsen, Bitcoin is also the largest energy consumer of all the cryptocoins, as mining equipment and farms can use up the amount of energy needed to power 12 million US households annually, whereas proof-of-stake (PoS) blockchains usually require less than the amount needed for 100 US households. In this respect, Larsen is now proposing a plan to migrate away from the PoW approach in order to reduce climate impact and increase network longevity.

A gradual switch to PoS could provide a substantial boost to the share prices of listed mining firms, as Larsen argues that “any new code proposal would almost certainly have to include lucrative incentives to gain their support.” Right now, Ethereum is going through a similar process, and quite a few miners are still against the proof-of-stake migration. Larsen believes that BTC miners will most likely right-out oppose his proposal, as well. Nevertheless, the Ripple co-founder thinks that the BTC code could be upgraded to incorporate a PoS consensus that would fairly distribute the “900 Bitcoin per day” from block rewards and the “approximately 2.1 million additional Bitcoin [that] are to be distributed through the year 2140.”

In order to reduce energy requirements as much as possible, the best solution from Larsen's perspective  would be to “take a snapshot of the current hash rate of existing miners and then reward miners on a pro-rata hash power basis through 2140. Existing miners would simply have rights to future Bitcoin rewards without the need to expend additional energy or make additional investments in mining rigs.” BTC mining firms would essentially gain the same revenue with less operating costs going into power expenditures. Larsen is aware that this process could take time to be embraced by the entire BTC community, but “the benefits far outweigh the risks.”

There is a very low chance that this proposal could get implemented, since Bitcoin mining firms that are now planning to increase their share of the hash rate would miss out on important revenue. Moreover, the PoS model would decrease the security of the blockchain, plus many U.S. mining firms are already looking to use as many green energy sources as possible. Coin Telegraph also points out that if this proposal were to get any support, it would probably lead to the creation of a proof-of-work fork, similar to how Bitcoin Cash was created in the block size debacle of 2017.

Buy the Ellipal Cold Wallet on Amazon