Bitcoin and Ethereum miners defended the power consumption in the proof of work.
According to the exponent who defended the proof of stake, mining is inefficient.
Bitcoin and Ethereum 2.0 or, rather, their consensus algorithms, stepped into the ring at Blockchain Summit Latam 2021. In a panel discussion, mining and staking specialists explained what they believe is the best way to validate transactions on a blockchain and issue new coins.
As advocates of proof of work (PoW) and mining
, Aníbal Garrido, who defines himself as a “cryptofinance consultant” and Sebastián Nill, CEO of Aeternam Broker, put forward their arguments. Both have experience in Bitcoin and Ethereum mining, respectively.
On the Proof of Stake (PoS) and staking
side, the apologist was J. J. Campuzano, CEO of Lex Cryptographica. He was introduced as an early Ethereum investor and it was mentioned that he runs his own Ethereum 2.0 validator node.
took place in a cordial framework in which each speaker respectfully made their arguments known and listened to those of their opponents. The moderation was in charge of Hannah Perez, who works as a journalist for DiarioBitcoin.
Proof of work: becoming valuable to generate more value
The question that started the exchange of ideas was what criteria to consider when evaluating and qualifying a consensus mechanism
as better than another.
For bitcoiner Aníbal Garrido, the key to a consensus mechanism is immutability. “To guarantee that immutability, the conditions of decentralization and security must be met,” he argues.
Therefore, according to him, “the consensus mechanism must guarantee decentralization in decision-making and be secure, in such a way that it can prevent the modification of these decisions in the future”.
With this in mind, Campuzano chooses the proof of work as the ideal consensus mechanism: “the proof of work not only guarantees decentralization through the requirement of a computational power, but this computational power, which you have to deliver to solve a problem, forces you to follow the guidelines or the rules of the game instead of having to break them. All of this in order to get the reward at the end.”
miner adds that, as a consequence of what has been explained so far, “new members join the network and, consequently, it becomes more secure and decentralized”. <blockquote class=”wp-block-qu
Here’s the beauty of the proof of work: its execution requires an investment that translates into hardware, infrastructure, human personnel and the payment of services, for example, electricity
In other words, it requires making value in order to generate more value. That is why I position the proof of work as the consensus mechanism that occupies the place of honor.
Aníbal Garrido, Bitcoin miner.
In closing his opinions, Garrido expressed that “proof of work was the past, is the present and will be the future” because “Bitcoin is the way out”.
In reading sense: Hannah Perez, Anibal Garrido, Sebastian Nill and J. J. Campuzano, participants of Blockchain Summmit Latam. Source: Youtube.
Ethereum 2.0 and proof of stake will have “an incredible development
, at present. Recall that the latter network is on its way to fully implementing its 2.0 version. When it does, it will leave mining behind and turn entirely to proof of stake.
According to this investor, the change that will take place in Ethereum “is as complex as having an airplane going 500 kilometers per hour, which you have to remove the turbines in mid-flight and change them, all without crashing”. Although he calls it “an extremely complicated process,” he is convinced that it will be accomplished before the end of 2021.
According to the etherean
exponent, proof of participation is 10,000 times more efficient than proof of work, in terms of resource usage.
I have a validator node, which makes no noise and is extremely easy to maintain. I only have to have one computer on. (…) Bitcoin is still the number one, that is something that must be emphasized, but there are other castles that are being remodeled in a brutal way and we will see a very important technological advance in the next five years.
JJ Campuzano, CEO of Lex Cryptographica.
“The consensus algorithm of the future is not going to be either of these two
During his turn, Sebastian Nill took the opportunity to say that, according to him, “the consensus algorithm of the future is not going to be either of these two”: neither proof-of-work nor proof-of-stake. He thinks it is “spectacular that there are several alternatives in terms of consensus algorithms”.
For Bitcoin’s initial model to be the model that lasts into the future, it would have to be too perfect. I think consensus algorithms have to evolve, and we’re probably just seeing a small part of what the future holds.
In fact, new consensus algorithms are coming out. There’s a coin that’s become very popular lately called Chia. This coin uses a test to prove that it’s a
This gives another alternative to the range of possibilities that blockchains offer.
Sebastian Nill, CEO of Aeternam Broker.
Anyway, Nill does not hide that, of the currently existing consensus algorithms, he prefers proof-of-work, which is the one currently used by Bitcoin and Ethereum’s main chain.
“When Ethereum moves to the PoS algorithm, I don’t know what will happen to the baseline value of creating new coins,” the panelist points out. “All that hardware invested [in mining], that infrastructure, the people, the constant development, having to liquidate cryptocurrencies to pay for light, rent the utilities… [with the switch] it’s going to tend to centralize,” he adds.
He concludes Nill by emphasizing those points he doesn’t like about Proof of Stake. “With PoS, if I want to accumulate, I can accumulate to infinity because I don’t need to spend the coins,” he argues.
The topic of the year: the energy expenditure of Bitcoin and mining
In a conversation of these characteristics could not miss the mention of one of the topics that dominated part of 2021 in terms of news from the field of cryptocurrencies: the energy consumption of Bitcoin
As reported by CryptoNews, Tesla, the company of billionaire Elon Musk, stopped accepting bitcoin as a means of payment
in May this year. The reason given was the high electricity consumption of mining, which, according to the entrepreneur, comes mostly from non-renewable sources.
For J.J. Campuzano, the electricity consumption of mining is something that should be decreased and, he says, Ethereum is on the right track thanks to its transition to proof-of-stake.
He also sees the need for hardware to validate transactions and issue new coins as a negative.
“In Ethereum, GPU cards are now extremely hard to come by,” he says, by way of example. “Those cards could be used to do much more beneficial things for humanity. So, I feel that using all these resources in a proof-of-work network, I feel, is not very efficient and we can move towards other types of solutions,” he adds.
According to Campuzano, the graphics cards (photo) that are used for Ethereum mining, could be
better used for other areas, for example, artificial intelligence. Source: pixabay.
Sebastian Nill, on the other hand, appreciates that mining consumes electrical power and uses hardware. “I, as a miner, consider myself a good customer of the electrical system and what I contribute to that electrical system will give the system possibilities to update and grow,” he explains.
For him, “Bitcoin and the proof-of-work cryptocurrencies encourage research and the search for sustainable and renewable energies for the electricity system.
to be able to harness this energy over time in the most efficient way possible”.
Finally, Aníbal Garrido who, as mentioned, is also a miner, sought to refute some arguments that are often thrown against mining and proof of work. For this he mentioned the studies of the University of Cambridge, timely reported by CryptoNews, which indicate, among other things, that about 80% of Bitcoin miners use renewable sources of energy.
In addition, the bitcoiner indicated that the electricity consumption of Bitcoin mining is low compared to that of other industries such as gold mining, or the international banking system. “I didn’t hear about any Greenpeace protests, nor did I see people on the street going to protest against the energy consumption of banks,” he said, adding that, according to him, “it’s more of a media issue than anything else, what is being said about Bitcoin”.