- Ripple executive Chris Larsen has told Bitcoin miners that moving to the PoS could be a “net positive” in the long term.
- He proposes a plan as to how the Bitcoin mining firms and their investors can benefit from moving to PoS.
Chris Larsen, the executive chairman and co-founder of Ripple Labs has an interesting proposal for Bitcoin miners. In his latest blog post, Larsen proposes Bitcoin miners move away from the existing Proof-of-Work (PoW) algorithm to the Proof-of-Stake (PoS) protocol. He refers to this move as “a net positive for their longevity”.
For a long time, the Bitcoin blockchain has been supporting the Proof-of-Work (PoW) consensus that secures Bitcoin transactions on the network. However, it has met with major criticism as PoW has been an energy-intensive protocol.
Just for context, the Bitcoin blockchain uses energy consumed by approximately 12 million US homes per year. As a result, other PoW platforms like Ethereum are also working on a transition to PoS protocol. Last month on November 10, Ripple executive Chris Larsen published a blog post writing:
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, Larsen’s proposal might surely meet some criticism from Bitcoin miners who have been heavily relying on PoW for their earnings. Besides, Bitcoin mining companies have invested millions of dollars in buying more hardware. However, Larsen has an interesting proposal for them as well!
Chris Larsen proposes a way to reward Bitcoin miners
The Ripple executive has proposed a fair distribution of Bitcoin with “900 Bitcoin per day” going to the Bitcoin miners from block rewards. As per this calculation, it would mean “approximately 2.1 million additional Bitcoin are to be distributed through the year 2140.”
He further suggests a “least disruptive” way for Bitcoin’s energy woes. Chris Larsen 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.
The Ripple executive further added that his plan would give miners “additional economic benefits” and “lucrative gains”. He notes that the same revenue will substitute towards the less operating costs going to their power bills. Larsen 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 could be extremely lucrative to existing miners, especially as Bitcoin goes from its current climate disaster status to a truly green financial technology of the future.
Chris Larsen has also mentioned some of the top crypto mining firms that can benefit from this proposal.