The XRP creator proposes an approach to get Bitcoin miners to quit Proof-of-Work.
Chris Larsen, creator of XRP and executive chairman of Ripple, came up with a proposal to convince bitcoin miners to move to a more environmentally responsible consensus process like Proof-of-Stake. Chris Larsen, XRP Creator and Ripple Executive Chairman
Larsen proposed methods that Bitcoin miners can use to reduce the power consumption of the network. He stated that miners should view the move to a low power consensus method, such as the one used by most of the leading crypto protocols, as “pure positive for their survival.”
The Bitcoin blockchain operates on an energy-intensive Proof-of-Work (PoW) consensus process. The pioneer cryptocurrency is often criticized by cynics who point out that the system requires a lot of energy every year and that it competes with the governments of most countries in the world. Many people believe that the rise of environmental, social and governance (ESG) issues is preventing several large corporations from adopting Bitcoin.
Larsen’s recommended “least destructive” method “will take a snapshot of the current hash rate of existing miners and then reward miners based on proportional hash power.” This will give current miners access to future BTC payments without requiring them to use more energy or invest in new mining hardware. In other words, his methodology will bring “additional economic benefits” to miners, since they will generate the same profit at significantly lower operating costs.
Larsen proposed the following system to explain how this might work:
“Consider Marathon Digital, which uses 8% of the current global hash rate, earning 75 BTC per day as of November 1, 2021. With this code change, Marathon will continue to earn 8% of daily bitcoin rewards, but will not need to. spend any energy to get this reward. ”
Proof of work
In addition, current miners will profit from a long-term stream of income as their rewards can be tokenized and sold to other market participants.
Ethereum, the world’s second largest cryptocurrency by market value, is currently undergoing a Proof-of-Stake transformation. This shift, according to Larsen, will make Bitcoin a “climate change.”
It is noteworthy that most of the people in the Bitcoin community support PoW because it is an excellent method of securing the network without compromising decentralization. It just goes to show that Larsen’s bold proposal is unlikely to win community acceptance.