Ripple co-founder Chris Larsen advised Bitcoin developers to consider switching from Proof of Work (PoW) consensus to Proof of Stake (PoS).
Larsen “expressed concern” about the negative environmental impact of Bitcoin mining. Any cryptocurrency issuers using proof of work (PoW) consensus should consider moving to carbon neutral mechanisms such as PoS or federated consensus, the co-founder of Ripple said. Perhaps the developers will be able to create other energy efficient mining algorithms.
“These changes are critical for Bitcoin to continue to be the dominant cryptocurrency. PoW leaves an unacceptably high carbon footprint and is expensive. Bitcoin alone consumes an average of 132 TWh per year, and this energy can power 12 million homes in the United States. About 43% of altcoins no longer use PoW. It is clear in which direction the trend is heading, ”said Larsen.
He gave several examples. For example, XRP has been using federated consensus to secure its network and verify transactions for about nine years. At the same time, the energy consumed by XRP is equivalent to the annual electricity consumption of 50 US homes. Binance’s internal token, BNB, uses Proof of Stake. Ethereum has also begun a gradual transition to PoS – the Beacon Chain was already launched in December last year.
Larsen’s remarks came against the backdrop of declining dominance of bitcoin in the cryptocurrency market. In March, BTC’s dominance index fell below 60% for the first time since October 2020. On correction, the altcoin market often breaks ahead, and the first cryptocurrency loses its market share. So, today the bitcoin dominance index fell to the “critical” 50%.
The controversy between PoW and PoS proponents has been going on for many years. Proof of Work proponents argue that Proof of Stake cannot provide the level of security and decentralization that PoW offers. In turn, opponents of PoW believe that the main problem of this consensus method is too high energy costs and the inability to reduce the interval between blocks below a certain level.
Swiss cryptocurrency broker Bitcoin Suisse suggested that Bitcoin developers could switch to PoS if Ethereum is successfully upgraded to version 2.0.