On Wednesday, May 25th, a Bitcoin researcher shared a few reasons why Bitcoiners should reject the Proof-of-stake mechanism for transaction validation. Namcios shared the result of his research and excerpts from the Oslo freedom forum two days ago.
Bitcoin currently uses the proof-of-work model for validating transactions. This consensus mechanism secures the Bitcoin network and helps to achieve decentralization. However, it is energy-intensive, and the transactions are processed at a relatively slow pace.
Many crypto fans have suggested migrating from PoW to PoS for the Bitcoin network, just like Ethereum. While this sounds rational, it may disrupt the network’s activities and may not turn out well eventually. Here are the top reasons Bitcoin should reject PoS and stick with PoW.
The Proof-of-Stake Consensus Model Limits Decentralization
The PoS model has an architecture that allows governing members to vote for or against significant decisions related to the protocol. Governing members have a stake, and the holders of the highest volume of staked tokens typically have more voting power. This pattern is similar to legacy systems and limits decentralization. Namcios argued that digital money or Bitcoin should not be politicized.
Bitcoin’s Triple Entry Ledger
Financial records are usually recorded with a double-entry ledger. This helps to validate records and limit manipulation. However, the Bitcoin network is even more secure as the protocol is a triple entry ledger. The ledger self-audits and records transactions on-chain. Interestingly, Bitcoin’s immutable ledger can only be built with the Proof-of-Work framework. According to Darin Feinstein, the triple entry ledger is the best accounting technology ever created by man.
Intensive Energy can be Advantageous.
The creation of Bitcoin and validation of transactions on the Bitcoin blockchain requires a vast amount of energy. The high energy requirements minimize human governance. According to Lyn Alden, Bitcoin without power is like airplanes with the flight removed. It’s like taking out the key innovation of what makes it valuable.
It would be unfair to turn deaf ears to several concerns about the proof-of-work validation model and Bitcoin mining. However, decentralization and the security of a protocol cannot be compromised. Interestingly, Bitcoin miners are already turning to renewable energy sources to reduce the damage caused by mining to the ecosystem. More so, layer two scaling solutions like the Bitcoin lightning network can be adopted to make transactions on the Bitcoin network faster.