Crypto executive Chris Larsen has urged Bitcoin miners to shift from the PoW system to ensure they don’t phase out. The Ripple executive said this as he disclosed his plan to phase Bitcoin mining away from the PoW system. The executive noted that he was proposing a change in code but felt that the rise in share prices due to the shift could be motivation enough.
The PoW system is the confirmation algorithm that prevents people from faking transactions on the ledger. The system remains trustworthy and dependable, but the energy it consumes has generated a lot of bad press for cryptocurrencies. The executive in November had written in a blog that climate experts believe the code had to be rewritten to use a more energy-efficient confirmation system used by many protocols today.
Ethereum, with its Ethereum 2.0 project, is edging closer to the proof-of-stake system. The change will make Bitcoin the last project still running on the proof-of-work system. Chris Larsen, however, understands that Bitcoin mining companies are at the moment not receptive to such a switch.
Incentives For Miners
He proffers an approach that will allow equitable distribution of the daily block rewards and the mining of the remaining 2.1 million Bitcoin till about 2140. The executive recommended that records be kept of the current hash rate of miners and that the miners be rewarded proportional hash power. The miners will claim future Bitcoin rewards without additional cost or energy expenditure.
The business mogul believes that his plan poses better mining returns. He believes that the system will allow miners to maintain their reward stream while reducing utility expenses. He agrees that it will be a lengthy process but that the rewards are worth it. He believes it will be necessary to change the narrative and make it the future currency.
It is quite unlikely, however, just as he admits that miners will accept his proposed plan. At the moment, many miners have goals to increase the hash rate, and as such, increase their earnings. The proposed plan could come between them and their preferred profits.
The Rate Of Mining Is Bouncing Back
In the meantime, Bitcoin mining is almost back at record highs. The rate dropped after the strict enforcement of the cryptocurrency ban in China diminished and forced many cryptocurrency companies, including miners, out of the country. The hash rate is used to identify the rate at which Bitcoin is being mined. In the summer, the hash rate dropped to 85 million terahashes per second, with increased efforts by the Chinese government based on environmental concerns.
Before May of this year, the hash rate hit around 180 million terahashes per second which was a record high. At the time, China was host to the largest mining pools, mining over 60% of the pool. The venture was sucking up electricity to the tune of 86 terawatt-hours (TWh).
The rate is now close to 180 million terahashes per second again. It seems the Bitcoin community has moved past the challenges encountered with the Chinese ban. A professor at Cambridge University, David Reiner, says that the community has shown commendable flexibility.
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