Executive Chairman and cofounder of Ripple Chris Larsen introduced a plan for Bitcoin miners to switch from Proof of Work (PoW), stating the change should be seen as “a net positive for their longevity.” PoW secures Bitcoin transactions on the blockchain, CoinTelegraph wrote. The amount of energy required by Bitcoin mining is a perpetual source of controversy in the crypto space even though there is no doubt that the Bitcoin network is the most secure and reliable.
Billionaire Chris Larsen wrote in a blog post today:
The emerging solution among climate experts is that Bitcoin’s code needs to be changed to a low energy consensus algorithm like those used by nearly all other major crypto protocols. For example, while Bitcoin uses the energy of approximately 12 million US homes per year, other methods could drive that to fewer than 100 US homes. Any new code proposal would almost certainly have to include lucrative incentives to gain mining firms’ support.
Opposition from miners expected
Ethereum, the second-largest cryptocurrency by market cap, is well on its way to switching to Proof of Stake. Still, Larsen admits most Bitcoin mining companies would oppose this change. He suggested distributing the “900 Bitcoin per day” from block rewards fairly. Around 2.1 million additional Bitcoin will have been distributed by 2140 in his opinion.
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He proposes looking at existing miners’ current hashrate and then rewarding then on a pro-rata hash power basis as the “least disruptive” solution to Bitcoin’s energy issues:
Existing miners would simply have rights to future Bitcoin rewards without the need to expend additional energy or make additional investments in mining rigs.
According to the businessman, this plan would provide miners with further economic benefit and “lucrative gains” as it would lower operating costs, but not affect revenue. He proposes holding and tokenizing future rewards, concluding as follows:
While the process to enact these plans with consensus across the Bitcoin community will take time, the benefits far outweigh the risks. These assets could be extremely lucrative to existing miners, especially as Bitcoin goes from its current climate disaster status to a truly green financial technology of the future.
Bitcoin holders not likely to welcome proposal
Neither Bitcoin holders nor miners are likely to welcome such a plan. Miners want to increase their hashrate share, so this plan would cause them to miss out on extra revenue. The proposal would result in a PoW fork judging by the controversy over the idea of changing block size.