Will Bitcoin Follow Ethereum And Change To Proof-of-Stake?
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The founder of Bitcoin Suisse, a Bitcoin provider in Switzerland, Niklas Nikolajsen, says in an interview with Cointelegraph that he believes it will after Ethereum has proven the success of the model. He cites the vast energy use of Bitcoin as the reason.
I don't think it will ever happen. That's because high security is central to the value proposition of Bitcoin and because PoW is more secure than PoS. Consider the fact that Bitcoin's token distribution is very top heavy. Early miners control the supply. In Proof-of-Work, token holders and miners are two distinct sets of people, whereas in PoS, token holders have direct influence over network security. Bitcoin whales are anonymous. Nobody knows the actual number of the people who control the set of addresses with over 90% of all Bitcoin in them put together. Giving those people total power over network security would be downright dangerous. In contrast, the owners of the largest Bitcoin mining pools are very well known.
Bitcoin can scale using off-chain second-tier solutions like the Lightning Network. In contrast, Ethereum can't because it's a smart contract platform where the contracts are executed on chain. Sharding, sidechains or moving to PoS are the only ways Ethereum can scale. Moving to PoS makes a lot of sense for Ethereum. For Ethereum to succeed and achieve mass adoption as a decentralized finance platform, it must scale on chain. PoS is a valid way to do that. Ethereum also does not have a hard supply cap like Bitcoin, which helps mitigate the stake distribution centralization issue.
Bitcoin's massive energy usage is a fact and it cannot be mitigated to any meaningful degree. In PoW, energy used for mining is supposed to be wasted. The whole point of mining is to waste energy as a way to pay a price for being allowed to participate in signing blocks. That said, while energy is wasted in PoW, the environmental impact of that energy use in Bitcoin is not as horrific as many people have been led to believe. Much of the mining is done in China in remote areas where there is excessive hydroelectric generating capacity that would otherwise go completely unused. For the province of Sichuan, Bitcoin mining done using hydroelectric power too far from industrial centers to be efficiently utilized by them is a good source of tax revenue. Because the product of Bitcoin mining is information - valid hash values, Bitcoin can be mined anywhere on the planet, minimizing crowding out generating capacity needed for other uses or harmful environmental impact. Bitcoin could be mined using solar power in deserts far away from civilization or on remote islands in with optimal conditions for wind power. Bitcoin's carbon foot print is not coal black, despite claims to the contrary. (For more information, see Robert Sharrat's article in Hacker Noon. Sharrat is a former investment banker and an expert on the Chinese energy market with professional experience in modeling the market.)
