Ripple Co-Founder Chris Larsen Suggests Transitioning Bitcoin Network to PoS Protocol
Bitcoin mining’s most vocal detractors have long cited energy usage as a disadvantage of crypto currency mining, and Ripple co-founder Chris Larsen believes he may have a fix in his most recent column. Larsen, who is also the CEO of Ripple Labs, advises that Bitcoin miners switch from the current, energy-intensive proof-of-work (PoW) method to the highly energy-efficient proof-of-stake (PoS) protocol.
He stated that these miners should consider his proposal as a “net positive for their long-term viability,” while also providing his perspective on how the changeover may help mining corporations. Larsen emphasizes that the only available method to establish a low-energy consensus is via a modification to the network’s code – a move that would fundamentally alter the Bitcoin network’s structure.
Proof-of-work is the consensus method that enables the blockchain to secure Bitcoin transactions. While the Bitcoin network is the safest and trustworthy, the amount of energy required for Bitcoin mining is a point of contention in the cryptocurrency community.
“The least intrusive option would just take a screenshot of existing miners’ hash rates and then compensate miners on a pro-rata hash power basis until 2140,” Larsen said on Medium. “Existing miners would simply acquire the right to prospective Bitcoin earnings without needing to invest in new mining systems. Larsen believes his idea is fair since it compensates miners for their years of labor securing the Bitcoin network with lower operational expenses. “Under such a scheme, miners would profit economically by generating the same income while incurring much lower operational expenses,” he said.
Larsen says that the concept may be amended to incorporate a staking process for increased network security. Additionally, the billionaire argued that the network may tokenize future mining incentives. According to him, such an update would benefit miners, particularly when the whole network switches to fully green financial technology.
This idea has a very little possibility of being adopted, since it would result in significant income loss for Bitcoin mining corporations who are currently intending to expand their share of the hash rate. Numerous US mining companies are already investigating the usage of renewable energy sources, and switching to PoS would make little sense for them.
There is another fundamental flaw with the proof-of-stake concept, and that is its influence on the blockchain’s security, a problem that has no remedy until Larsen’s proposed adjustment is readily available.
You may have seen me and others advocate for Bitcoin to move away from PoW to address energy consumption long term. A common pushback is that miners would never get on board with this. Well today I’m proposing a solution to that! 1/2 https://t.co/U8YstHPZOA
— Chris Larsen (@chrislarsensf) December 9, 2021