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- In a blogpost the chairman of Ripple, Chirs Larsen suggested that it could be beneficial if the proof of work mechanism can be ditched
- Instead Larsen suggested that it would be beneficial if Bitcoin could could adopt proof of stake mechanism which could be profitable for miners & mining companies
- It could reduce operational costs and solve the energy & in turn climate concerns in and around the tokens.
The Bitcoin & crypto community has been facing wrath from regulators & environmentalists over energy consumption and its sources of the same for quite a while.The energy demand for Bitcoin has only been on the rise since 2013 to 130 terawatts per year as of 2021. The data is assimilated by Cambridge Bitcoin Electricity Consumption Index (CBEC)
In solution to this, The co- founder & chairman of Ripple, Chirs Larsen in a blog post shared his opinions where he happened to give insights on what were the possible events occurring if Bitcoin ditched the Proof of work system. According to larsen in addition to solving various problems, it could also help the mining stocks to skyrocket.
The proof of work consensus is a mechanism that validates & secure Bitcoin transactions on the blockchain. Larsen pointed out that as an emerging solution to concerns by climate experts, the code for Bitcoin needs to be changed in regards to a low energy in similarity to all other protocols
A Solution for everyone
Proceeding further, the chairman also pointed out that bitcoin needs to adopt proof of stake mechanism which could also help miners & deal with climate critiques as it costs less energy and should be perceived as a net positive of their longevity. Such a situation where PoW ceases to exist could also help mining companies to be better off staking their coins which consequently would result in increase in their share prices.
Larsen’s least frictional solution includes a code which would take the current particular hashrate in accordance with the time of mining of existing miners & reward them on a pro-rata basis through 2140. This means that existing miners would have access to future bitcoin rewards without spending additional energy or investments in mining rigs.
Under such a scheme miners would get a surplus economic benefit as the revenue stands the same with operation costs being minimized. However such changes could take leaps of consensus across the bitcoin community which consequently would take more time. However, according to Larsen, the benefits outweigh the risks.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
