Chris Larsen, Ripple’s Executive Chairman and Cofounder, has revealed his plan to allow Bitcoin miners out of Proof of Work (PoW). He said that they should see it as a “net positive” for their long-term success.
He believes it could boost the share price of listed mining companies, as any new code proposal would almost certainly need to include lucrative incentives for their support.
PoW is the consensus algorithm that protects Bitcoin (BTC), transactions on the blockchain. The Bitcoin network is most reliable and secure, but the amount of energy required to mine Bitcoin (BTC) has been the subject of endless debate. Larsen posted the following in a blog post on Nov. 10.
According to climate experts, the solution is to change Bitcoin’s code to a low-energy consensus algorithm similar to those used by most major crypto protocols. Bitcoin, for example, consumes the energy of about 12 million US homes each year. However, there are other ways to reduce that number to less than 100 US homes.
Ethereum is now halfway through the transition to Proof of Stake. Larsen claimed that this would make Bitcoin an “outlier”, but he acknowledges that most Bitcoin mining companies would oppose any similar change.
He has however proposed a way to distribute “900 Bitcoin per Day” from block rewards, and “roughly 2.1 Million additional Bitcoin,” through 2140.
He suggested that the best way to solve BTC’s energy problems is to take a snapshot at the current hash rate and reward miners according to their pro-rata hash power.
“Existing miners will simply have rights to future Bitcoin benefits without having to expend more energy or make additional investments into mining rigs.”
He explained to the billionaire businessman that his plan would provide miners with “an additional economic benefit” and “lucrative benefits” as they would earn the same revenue but have lower operating costs which would go towards their power bills.
He suggested that the future rewards […] could possibly be held and tokenized, concluding that while the process of enacting these plans with consensus from the Bitcoin community will take some time, the benefits outweigh any risks.
These assets could prove to be very lucrative for existing miners, particularly as Bitcoin moves from its current climate disaster status into a truly green financial technology in the future.
Larsen specifically mentioned several U.S. mining stocks, including Stronghold Digital Mining(SDIG), Hive Blockchain Technologies(HIVE), Canaan [CAN], Riot Blockchain[RIOT], Canaan (CAN), Riot Blockchain[RIOT], Riot Blockchain[RIOT], Riot Blockchain[RIOT], Canaan]), Canaan [CAN], Riot Blockchain[RIOT], Riot Blockchain[RIOT], Riot Blockchain[RIOT], BIT Mining[BTCM], Bit Digital (BTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTBTF], Marathon Digital Mining] and Marathon Digital Mining [MARA]).
Similar: Proof-ofstake vs proof-of work: Understanding the differences
The proposals will not be accepted by Bitcoiners or miners with ambitious plans to increase their hashrate share and lose out on additional revenue. A PoW fork would almost certainly result if the proposal gained some support, as evident by the blocksize controversy.
Eileen Wilson –Technology and Energy
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