Bitcoin (BTC) code contributors want to think about a move away from the cryptocurrency’s proof-of-work consensus mechanism, Ripple co-founder Chris Larsen argued.
In a Wednesday weblog submit, Larsen outlined main PoW-related vulnerabilities, noting rising considerations over Bitcoin’s carbon footprint. Based on the manager, PoW-based cash like Bitcoin should contemplate a code change to carbon-neutral validation strategies like proof-of-stake or federated consensus, or one thing but to be developed.
“I would argue that such a change is critically important for Bitcoin to remain the world’s dominant cryptocurrency. PoW’s current energy demands and carbon footprint are already unsustainably high, with Bitcoin alone consuming an average of 132 TWh a year — equivalent to roughly 12 million U.S. homes,” Larsen famous.
The co-founder identified that non-PoW altcoins — together with Ethereum’s anticipated swap to proof-of-stake — make up 43% of all cryptocurrencies by market capitalization, with many new cash selecting to keep away from PoW. “It’s clear which way the trend is moving,” he acknowledged.
Larsen talked about that the XRP ledger has been utilizing federated consensus to safe its community and validate transactions for about 9 years. “It’s closed 62+ million ledgers without downtime, uses the energy equivalent of just 50 U.S. homes per year,” he famous. Some new profitable altcoins like Binance’s native token Binance Coin (BNB) additionally function a model of PoS, Larsen stated.
Larsen’s remarks come amid a big drop in Bitcoin’s dominance on cryptocurrency markets. In March, the Bitcoin Dominance Index dropped beneath 60% for the primary time since October 2020. Because the altcoin market features momentum, Bitcoin continued to lose its share of the market, with the dominance index falling to 50.7% on April 21.
There was a long-running debate between proponents of PoW and PoS, with PoS advocates seeing mining power prices as the most important downside for PoW. The Bitcoin and Monero (XMR) group — a few of the largest PoW proponents — typically argue that PoS can’t attain the extent of safety and decentralization offered by PoW.
Niklas Nikolajsen, the founding father of Swiss crypto dealer Bitcoin Suisse, predicted that Bitcoin will shift to PoS as soon as the Ethereum community proves the algorithm’s success.