rippleCompany executives continue to hit Bitcoin (BTC) mining, this time by proposing a new idea that a mining expert has dubbed “the dumbest idea” of 2021.
Bitcoin should move away from the “climate catastrophe” of the Proof of Work (PoW) consensus mechanism, and instead embrace a model in which existing miners receive rewards without doing anything, Ripple President and Co-Founder Chris Larsen argues in a new proposal.
“An emerging solution among climate experts is that Bitcoin code needs to change to a low-power consensus algorithm like that used by nearly all other major crypto protocols,” Larsen called for the move to an alternative Proof of Stake (PoS) algorithm.
He added that the main challenge to making such a change is likely to be resistance from miners who have invested heavily in equipment, which would be worthless if the protocol moved to a point-of-sale model.
To solve this problem, Larsen suggested that all existing Bitcoin miners could instead earn a BTC reward based on their share of the current hash rate, without having to mine any coins using their power-hungry machines.
“Existing miners will simply have rights to receive future bitcoin rewards without having to spend additional energy or make additional investments in mining rigs,” Larsen wrote, adding that this may be subject to complexity rules to “increase network security.”
Finally, the Ripple chief argued that his proposal could transform the Bitcoin network from “the current climate catastrophe situation into the green financial technology of the future.”
The proposal has not been well received by Bitcoin, for example Nick Carter, co-founder of Currency Scales and co-founder of Castle Island Projects, also known for his analysis of bitcoin mining, calling it “the most stupid idea I’ve come across this year.”
“Hey, you know all those cool properties of PoW — non-falsifiable cost, validation pool lead, non-permanent validation feature? Let’s eliminate those,” Carter added.
Crypto Derivatives Exchange BitMEXIt also appears that his research team did not take the suggestion from Chris Larsen seriously:
Others expressed their support for the Proof of Work system as the best approach to maintaining network decentralization.
“Proof of Work is the only consensus mechanism we have today. Securing billions of dollars in bitcoins,” said Alejandro de la Torre of proof of workIt is a bitcoin mining consulting firm Cryptonews.com. “If you think you have a better consensus mechanism, build it. Otherwise, shut up.”
Meanwhile, other industry observers have pointed out that the problem actually lies in the way power is generated.
“Energy consumption is not the issue, but how it is currently generated. If BTC used all of solar energy, that wouldn’t be an issue,” a Twitter user books, adding that global energy generation needs to rise regardless of bitcoin.
Discussing the proposal on Reddit, several users described it as “stupid” to grant future rights to receive BTC based on the current hash rate. “[…] Another user asked “Is this some kind of chess move that I don’t see”.
Furthermore, concerns regarding the energy use of proof-of-work as a consensus mechanism have been repeatedly debunked in the past. According to Lyn Alden, founder of Lynn Alden Investment Strategy, many critics attacking Bitcoin’s energy use “begin with the assumption that it is useless”.
“The market value of a trillion dollars varies,” Alden said. books Earlier this year, she added, “Not much attention is paid to the energy use of washing machines around the world, for example, because we understand the value.”
This latest proposal from the head of Ripple, who is not the first representative of the company associated with the XRP token, proposed changes to the Bitcoin token.
The same thing also happened in March of this year, when Ripple chief technical officer David Schwartz criticized Bitcoin’s PoW consensus mechanism.
Schwartz said at the time that his design was “so that true decentralization and de-intermediation were never possible,” arguing that miners are key stakeholders “trying to charge the highest fees they can get away with.”
At the time, Ripple CEO Brad Garlinghouse offered his view on Bitcoin, saying that it is “not ideal as a payment mechanism” due to its energy costs and associated CO2 emissions.
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(Updated at 19:26 UTC with commentary from Alejandro de la Torre.)