Proof-of-Stake for Bitcoin and EthereumDavid Kemp
According to some prominent brokers and analysts, Bitcoin will soon follow Ethereum. The crypto will move to PoS. As soon as the ETH network has demonstrated the algorithm’s success, Bitcoin will switch to the newly developed concept called Proof-of-Stake. How true their predictions are will soon be clear.
The current consensus algorithm that the crypto uses is PoW (Proof-of-Work). The concept appeared long before Bitcoin. However, the algorithm has proved to be inseparable from BTC. Analysts strongly doubt yet admit that this will possibly change in the nearest future.
Those interested in the latest events may have seen a documentary filmed for German television and showed more than a year ago, in which Nikolajsen gave an interview and commented that BTC’s wasn’t planning to move to PoS. However, Ether was the currency that was completely ready to move to this concept. He explained that the demand for electricity would then significantly decrease. And that would take merely a few months. He also added that Bitcoin would be another cryptocurrency that would be willing and ready to adapt to the new concept and superior system as well. He was looking forward to the technology being soon proven. PoS should operate well and work better than PoW.
The Major Points
All want to know what might be at stake. Nodes in blockchain networks relying on a PoS concept usually engage in validating blocks – they hardly mine them, opposite to PoW concept that allows it. There is an algorithm in PoS that determines validators depending on the amount of tokens a certain node has staked in the wallet. Tokens should be collaterally deposited. This will let the system add the following block to the existing chain.
Nikolajsen predicted that BTC will surely move to a PoS alternative. He made his predictions taking into consideration the high levels of electricity that the network required in order to sustain and provide further mining opportunities.
Nikolajsen disagrees with those claiming that mining BTC needs amounts of electricity similar to that used by smaller nations. He also pointed out that the issue is of less importance. What matters is where the required energy is produced. He also mentioned the sustainability issues.
The crypto’s predecessors, such as gold production, consume incredible amounts of electricity. And so do technology industry and banking system. This is the fact that many people refuse to acknowledge.
Banking towers consist of hundreds departments where thousands of clerks work 24/7. Server rooms, computers and offices need electricity and consume it non-stop. At nights, all those structures start glowing. Facebook is another source that keeps pumping tons of electricity. The corporation has over twenty data centers all around the world and that’s far more than what Bitcoin owns. The level of energy that the banking system consumes is way higher.
Concepts Stay Competitive
Right now the concepts are going head-to-head. Most proponents of sustainable energy critique the common perception. They do not believe in BTC’s high energy consumption. Their priority is to emphasize the importance of the sources that energy comes from and they do not consider the levels of consumption of the utmost importance. Besides the described issue, the two algorithms raise debates over their barriers to entry. What bothers them is economic fairness. They focus on decentralization and network security, too.
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