Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

POS might be the future, and if we find that it's impossible to predict which stakes will be doing validation, I'm all for Bitcoin upgrading to POS.

Its just not ready today. No one is going to risk their Bitcoin savings on trying POS.

Let ethereum test it, then BTC can adopt it after a few years.

> However you want to look at it, this coin looks crappy from both sides. Unless you're a miner.

Depends on what you are comparing to. For me, Bitcoin is easier to understand than the fiat system we are currently using, and that's why I'm heavily invested in to it.

In addition to miners making huge profits, there have been also cases where miner operations have turned sour, KnC Miner being one example.

Yes, there might be better systems out there. But BTC has very clear and simple protocol rules which are easy to understand, and it has properties which are very lucrative (permissionless, decentralized, limited supply, easily verifiable and transferable and so on). Other consensus mechanisms fail to deliver their promise in as effective way.

I wouldn't say BTC is fair, but it is clearly fairer. With PoS coins, it is clear that minting new coins will heavily centralize for exchanges and big holders. With BTC, miners are clearly categorized as separate economic actor, where the skillset and capital needed to mint new coins is very different from let's say operating an exchange.

> The granddaddy of all consensus mechanisms—behind Bitcoin, Litecoin, Monero, and (for the time being at least) Ethereum—is called proof of work. Essentially, PoW makes adding transactions to the blockchain computationally—and therefore financially—very expensive, so as to discourage fraudulent activity. ...

This passage reflects a deep-seated, widespread misunderstanding of how/why Bitcoin works. I suspect the author knows, but the brevity of the article prevents actually explaining the issue. This is a recurring problem in this space and has opened up a large fraud opportunity as every bottle of snake oil looks the same to those who don't do the deep technical dive.

Proof-of-work has nothing to do with ensuring the validity of transactions. Transactions contain all of the information needed to detect invalid transactions. Hashes, signatures, scripts, and amounts can all be checked and will be rejected if invalid. The validity of every transaction can be tested without proof-of-work. Systems like this had been developed prior to Bitcoin.

So it's possible to eliminate every kind of fraud through cryptography alone, except one.

The problem proof-of-work solves is double spending, a term you won't find in the article. A malicious actor can try to spend the same coin twice (or more). Both versions of the double spend transaction are valid, but a node can only accept one. Which one does it accept? It accepts the one on the block with the most cumulative proof-of-work ("strongest chain"). In the event of a tie, the node accepts the first version it saw. The strongest proof-of-work chain can therefore change from one moment to the next as blocks are received.

Proof-of-work imposes a non-recoverable cost to publishing a block of transactions. That cost and its finality discourage double spending by making the publication of double spending transactions permanently expensive. An attacker needs to out-spend the entire rest of the network to succeed, and loses everything spent if the attack fails. The cost of a failed attack can never be recovered.

So any scheme to replace proof-of-work needs to maintain that element of irrecoverable loss of value for a failed double spending attack. It hasn't been an easy nut to crack. A lot of projects claimed to have done it only to discover some flaw in the game mechanics or technology.

> Why should the least well off in society be part of a crypto-coin whose supply has been given to early adopters and insiders?

They shouldn't, what Bitcoin is enabling is the ability for whoever to use whatever kind of coin they want. Bitcoin opened the whole pandoras box where anyone can create their own coin if they want.

However, for each crypto coin there is clear incentive to make the coin more useful in transactions, both for those more well off and for those less fortunate. Typical BTC holder wants to make BTC useful for everyone, because that adds value for their holdings. That usefulness might add value to those less well-off. If not, they can use something else - in the end there is more choice in the marketplace which should (in theory) benefit everyone.