Should Bitcoin Follow Ethereum and Adopt Proof-of-Stake?
Ethereum’s transition to Proof-of-Stake has sparked the debate if Bitcoin should follow Ethereum’s footsteps or stick to Proof-of-Work.
The Merge upgrade transited Ethereum to the Proof-of-Stake consensus mechanism on Sep 15. It reduced the energy consumption of Ethereum by 99.95%
According to a Cambridge University study, Bitcoin uses 108.4 TWh per year, which is more power usage than the entire country of Pakistan or Kazakhstan. Bitcoin’s Proof-of-Work (PoW) mechanism is energy intensive because it uses high-powered computers to validate the transactions on the blockchain. The high energy usage of Bitcoin has raised concerns about the environment.
Should Bitcoin shift to Proof-of-Stake?
According to Alex De Vries, founder of Digiconomist, if Bitcoin uses PoS, it can probably get away with using 10,000X less power than PoW. Charles Hoskinson, the co-founder of Cardano, believes that PoS can actually work for Bitcoin.
PoS compromises on Decentralization?
Post-merge, Ethereum is now more centralized because five major entities dominate the blockchain. Staking solution Lido Finance controls more than 30% of staked ETH. The crypto Twitter believes that PoS will turn out to be worse for Ethereum in the long run. The PoS will just make Ethereum more censored and centralized.
Jack Mallers, the founder and CEO of Strike, believes that:
Proof of Work is like, “We finally got an airplane to fly,” and Proof of Stake is like, “We know how to make it cheaper, faster, and less carbon efficient just by not flying.”
Among Bitcoin and PoW supporters, there is a widespread belief that “Bitcoin’s Proof-of-Work is a feature, not a bug.”
The community widely believes that Bitcoin holds value because miners are spread worldwide. The nodes are not centralized, with few entities alone.
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