The current big question in the battle between bitcoin and Ethereum, as ETH plans to move from Proof of Work to Proof of Stake, is which works best: PoW or PoS. although it has been an ongoing argument, it has been given some fresh prominence due to the steps Ethereum is taking to speed up the move.
Simon Chandler asks: “While the Ethereum developers have decided that PoS is the best way forward for Ethereum, the question remains as to whether it might offer advantages to Bitcoin, which, as a store of value, has different aims.”
According to Chandler opinion is quite divided in the crypto community: those supporting PoW believe that it is better fro Bitcoin, because it offers greater stability and security. The PoS supporters say that PoS offers similar security, and that it provides more simplicity and scalability, which is very important.
It also has less of an impact on the environment compared with transactions on the Bitcoin blockchain. Pierre Rochard commenting on Twitter wrote, “When Ethereum switches from proof-of-work mining to proof-of-stake, they’re going to push the “green” anti-Bitcoin narrative *hard*. It’s going to be well funded and highly coordinated. If you thought the 2017 scaling debate was ugly, this is going to be much much nastier.” Needless to say, the tweet brought up a lot of differing responses.
Chandler contacted a confirmed Bitcoiner who responded by saying the PoW vs. PoS debate isn’t even worth addressing, adding, “I don’t use shitcoins.” Those who are less partisan see both Proofs as having their own strengths and weaknesses, although it would seem ther is a consensus that PoW is better for Bitcoin.
The main ‘weakness’ with the PoS model is that it is “theoretically more prone to centralization and has the inherent security issue of using the native tokens of a blockchain to decide the future of those tokens or the blockchain,” according to Mike Collyer, CEO at Foundry, a crypto mining finance company. And even those who support Ethereum acknowledge that PoW has its strengths. Lex Sokolin, co-head at Ethereum-focused major blockchain company ConsenSys said, “One of the strongest advantages of proof of work is that it has worked as the chassis for cryptographic security for over 10 years, and now secures a trillion in value. It is technically and economically complex, which plays a role in attracting specialized mining companies to the work of maintaining the network.”
However, Sokolin also said, “Proof of stake is an easier-to-understand system, which allows easier participation through the staking of capital. It is also able to achieve similar security outcomes without the electricity consumption of the proof of work mechanism, and has been proven to work through a number of smaller but functional crypto economic networks.” He also explained why PoS is better for the Ethereum network, which is aiming to provide the digital infrastructure for a future decentralized/crypto-based financial system. “The blockchain-based economic activity that we see is now far above and beyond moving one type of value around on a single protocol. Rather, we see software executed by a global network across payments, lending, banking, investing, and insurance substitutes,” Sokolin said, and stated that this is the main reason Ethereum needs to move to PoS. But it seems that this is a debate that will rage on in the crypto community for some time to come.