To recap, Proof-of-Work (PoW) is a Bitcoin network security algorithm that relies on performing a complex mathematical task to "find" new blocks and thus confirm the work done by the miner. Every year the complexity of mining increases due to the growing popularity of the major cryptocurrency, so the energy consumption of the Bitcoin network is constantly growing. This is seen by many crypto critics as a direct threat to the environment. Therefore, experts have taken it upon themselves to popularise the switch to a different consensus algorithm.

In spring, China banned the mining of cryptocurrencies using computing equipment, which prompted a rash of criticism from the mining industry. The situation has not improved since then. This week, in particular, the idea of mining BTC using energy from a volcano in El Salvador was the subject of negative comments.

What will happen to Bitcoin mining?

Conservation of the environment is the key motive behind Larsen’s statement. Here is his quote published in Cointelegraph, in which a cryptocurrency industry representative shares his vision of the situation.

The new solution, created among climate experts, is that Bitcoin’s code needs to be changed to adopt a low-energy consensus algorithm. That is, analogous to those algorithms used in many other popular cryptocurrencies. While Bitcoin’s current energy consumption per year is about 12 million US households, it could be reduced by hundreds of thousands of times using other methods.

In other words, Chris is primarily thinking about how to reduce the energy consumption of this activity. Remember, it can indeed cause problems at times. For example, mass influx of Chinese miners in Kazakhstan became a reason for concern of authorities about possible power supply disruptions. Read more about this story in a separate article.

Ripple co-founder Chris Larsen

For example, Etherium is already on its way to a full transition to Proof-of-Stake, which according to the developers’ plans should take place next year. Although Larsen is confident that applying PoS to Bitcoin and Etherium will increase competition between the projects, he still considers the aforementioned measure necessary.

His main proposal is to move to a daily distribution model of around 900 BTC per day in blockchain rewards, and then set “a clear issuance level until 2140”. As a reminder, that’s the year miners will have to mine the last bitcoin of the makim 21 million BTC. Read about what will happen to the cryptocurrency network after the last BTC is mined.

Another Bitcoin problem is the disposal of electronic waste

But how exactly to distribute the coins? Larsen suggested fixing the current ratio of miners’ equipment capacity and distribute BTCs based on it. In this way, the network would supposedly be maintained with the existing economic incentives for miners.

Bitcoin hash rate dynamics

Moreover, “future rewards for miners can be tokenised” for business convenience. A major plus for the miners themselves will be the fact that they will no longer need to spend a huge amount of capital to buy new equipment and maintain it.

ASIC miner for cryptocurrency mining

Larsen’s proposal is unlikely to be taken positively by Bitcoin-maximalists or miners. Yes, such an innovation would bring the network’s power consumption down to almost zero, but it would also destroy most of the economic incentives already in place. In other words, mining could not only lose popularity, it could become a stagnant industry.


We believe that in general the proposal to move Bitcoin to PoS cannot be taken seriously given the work that needs to be done to do such a thing. An example here is Etherium, which was going to be moved to a new consensus mechanism as soon as it launched, something that has not been done for several years. But with BTC, it will be even more difficult, as Etherium has several test networks to test such changes.

Miners are more likely to support the idea of switching to clean energy sources than to want to make changes to Satoshi Nakamoto's code. In addition, such global fixes create security risks for the project - and no one is interested in that.


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