The Bitcoin blockchain has long supported the Proof of Work (PoW) consensus, which protects Bitcoin transactions on the network. However, because PoW is an energy-intensive protocol, it has received significant criticism. Chris Larsen, Executive Chairman and Co-Founder of Ripple Labs, made an Interesting proposition for Bitcoin miners.
Ripple Co-founder Believes the Move Will Positive for Bitcoin Miners Longevity
In his latest blog post on December 9, Larsen suggested that Bitcoin miners move from the existing Proof of Work (PoW) algorithm to the Proof of Stake (PoS) protocol. He called this move “a net positive for their longevity”.
The Bitcoin blockchain uses the energy consumed by approximately 12 million American households each year. Therefore, other PoW platforms such as Ethereum are also working on the switch to the PoS protocol. Ripple manager Chris Larsen in his published blog post said:
“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.”
However, Larson’s proposal will definitely be criticized by Bitcoin miners who rely heavily on PoW for their income. Additionally, bitcoin mining companies have invested millions of dollars in buying more hardware. However, Larson also made them an interesting suggestion.
Chris Larsen Suggested a Way to Reward Bitcoin Miners
Ripple executives suggested an equitable distribution of bitcoin, with “900 bitcoins per day” being distributed to bitcoin miners from block rewards. According to this calculation, this means that “by 2140, approximately 2.1 million bitcoins will be redistributed.”
He also proposed a “minimally destructive” approach to Bitcoin’s energy dilemma. Chris Larson wrote:
“Take a snapshot of the current hash rate of existing miners and then reward miners on a pro-rata hash power basis. Existing miners would simply have rights to future Bitcoin rewards without the need to expend additional energy or make additional investments in mining rigs.”
Ripple executives added that his plan will bring “additional economic benefits” and “rich benefits” to miners. He pointed out that the same income means less running costs into their utility bills. Larson further added:
Future rewards […] could be held and tokenized,” concluding that “while the process to enact these plans with consensus across the Bitcoin community will take time, the benefits far outweigh the risks.
These assets can be very profitable for existing miners, especially as Bitcoin transforms from the current climate catastrophe state into a true green financial technology in the future.
Chris Larsen also mentioned some of the leading crypto mining companies that could benefit from the proposal.