Ripple Chief and co-founder Chris Larsen have revealed his plans to have Bitcoin (BTC) miners migrate from Proof of Work (PoW). According to him, the miners should consider the move as one that is aimed at aiding their longevity.
Furthermore, he shared his beliefs that this could be a major step towards improving the share prices of listed mining firms. Rightfully so though, because any new code proposal would most likely be coming in with very attractive incentives if they are hoping to get their support.
Ripple Chief Proposing a PoW to PoS Switch
PoW is a decentralized consensus mechanism used widely in cryptocurrency mining, for validating transactions and mining new tokens. In short, PoW helps to secure Bitcoin (BTC) transactions on the blockchain. But despite the Bitcoin network being quite secure and reasonably reliable, the amount of energy expended to mine BTC has been a major cause of concern for all crypto stakeholders.
On November 10, Larsen talked about the solution that is being thought out by climate experts. In the post, Larsen mentioned how experts are looking at the possibility of changing Bitcoin’s code to a low energy consensus algorithm, just like most other crypto protocols
If this is truly achieved, it could mean that the energy of about 22 million U.S homes that Bitcoin currently uses, could be brought down to that of around 100 homes using other methods.
Meanwhile, Ethereum has already begun its own migration to Proof of Stake and Larsen believes it would make Bitcoin an “outlier”, though he admits that most Bitcoin mining firms will not be exactly open to such changes.
Larsen’s Suggested Solution To The Energy Challenge
Ripple Chief Chris Larsen has put forward a number of suggestions that he thinks can solve the persistent energy problem facing the mining industry.
Firstly, he shares that the “least disruptive” solution might be to take a snapshot of the present hash rate of existing miners and then reward them on a pro-rata hash power basis. This simply implies that the existing miners would have rights to future Bitcoin rewards without having to use more energy or make additional investments in mining rigs.
According to the businessman, his plan would ensure that miners gain virtually the same revenue, with lower operating costs, thus giving them robust gains and even more economic benefit.
He went on to suggest how the future rewards can be held and tokenized, admitting that while the processes involved in implementing these plans might take a long time, the benefits outweigh the risks by a very long shot.
In his post, Larsen referenced a number of U.S. mining stocks including Marathon Digital Mining (MARA), Stronghold Digital Mining (SDIG), Bit Digital (BTBT), Hive Blockchain Technologies (HIVE), Riot Blockchain (RIOT), BIT Mining (BTCM), and Bitfarms (BITF).
Seems really obvious that most miners would frown at these ambitious plans, especially those who are looking to increase their share of the hashrate, because the plan would mean that they miss out on any additional revenue.