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Ripple chair’s pay-off plan to convince BTC miners to adopt proof-of-stake

Ripple chair’s pay-off plan to convince BTC miners to adopt proof-of-stake
Written by publisher team

Ripple’s CEO and co-founder Chris Larsen has revealed his plan for Bitcoin (BTC) miners to move away from Proof of Work (PoW), saying they should view it as a “net positive for their longevity.”

He argues that it could provide a significant boost to the stock prices of listed miners, “because any proposal for a new token would almost certainly have to include lucrative incentives to win their support.”

PoW is the consensus algorithm that secures Bitcoin transactions on the blockchain. While the Bitcoin network is the most secure and reliable, the amount of energy it takes to mine BTC is causing endless debate in the crypto space. In a November 10 blog post, Larsen wrote:

“An emerging solution among climate experts is that the Bitcoin code needs to be changed to a low-power consensus algorithm like that used by nearly all other major cryptographic protocols. For example, while Bitcoin uses the power of nearly 12 million homes in the United States annually, the Other methods can push that into fewer than 100 homes in the United States.”

Ethereum is already halfway through the transition to Proof of Stake. While Larsen said that this would make Bitcoin an “anomalous”, he acknowledged that any such change would be opposed by most Bitcoin miners.

However, he proposed a solution to fairly distribute “900 bitcoins per day” from block rewards and “approximately an additional 2.1 million bitcoins.” [that] It will be distributed during the year 2140.”

He suggests that the “least disruptive” solution to Bitcoin’s power problem is to “take a snapshot of the current miners’ current hash rate and then reward miners on a proportional basis of hash power.”

“Existing miners will simply have the right to receive future bitcoin rewards without having to spend additional energy or make additional investments in mining rigs.”

The billionaire businessman explained that his plan would give miners an “extra economic benefit” and “profitable earnings” because they would get the same revenue with lower operating costs that go to their electricity bills.

Suggest ‘future rewards […] can be held and tokenized,” he concluded, concluding that “while the process of enacting these plans by consensus across the Bitcoin community will take time, the benefits far outweigh the risks.”

“These assets could prove to be very profitable for today’s miners, especially as Bitcoin transitions from the current climate catastrophe state to the green financial technology of the future.”

Larsen specifically referred to several US mining stocks, including Stronghold Digital Mining (SDIG), Hive Blockchain Technologies (HIVE), Canaan (CAN), Riot Blockchain (RIOT), BIT Mining (BTCM), and Bit Digital (BTBT), Bitfarms (BITF), and Marathon Digital Mining (MARA).

Related: Proof of Stake vs Proof of Work: Explaining the Differences

Needless to say, the proposals are unlikely to be welcomed by Bitcoiners – or miners who have ambitious plans to increase their share of the hash rate and will lose additional revenue through this scheme. And based on the controversy surrounding block sizing, if the proposal gets some support, it will almost certainly lead to PoW forking.