Bryce “Zooko” Wilcox, the creator of the cryptocurrency Zcash, told us that he wanted the privacy-focused coin to abandon the proof of work (PoW) consensus mechanism. Wilcox believes that Zcash must transition to proof of stake in the same way that Ethereum has (PoS). Proof of work (PoW), the underlying technology of Bitcoin, rewards miners for solving complex mathematical problems and creating new coins. This consensus mechanism is frequently chastised for requiring a large amount of energy to keep the network operational. Proof of stake (PoS), on the other hand, does not involve any mining at all. Rather, network participants are compensated for holding (or staking) cryptocurrencies. According to Wilcox, proof of stake (PoS) is not only environmentally friendly, but it also provides superior security:
I believe proof-of-work has some security flaws, as evidenced by the 51 percent of attacks that have occurred (when a miner controls a majority of computing power on the network and can steal tokens). And I believe that proof-of-stake can provide much more powerful security at a lower cost.
However, such claims are widely contested within the Bitcoin community, whose members are adamant that proof-of-stake blockchains cannot compete with the king’s level of security. Furthermore, the algorithm is constantly chastised for facilitating power concentration by fostering a natural plutocracy.
Wilcox, who has previously communicated with the pseudonymous Bitcoin creator Satoshi Nakamoto, cited successful proof of stake (PoS) projects such as Cardano and Tezos as examples.
Will Bitcoin do the same?
Some crypto luminaries have urged the Bitcoin community to switch to proof of stake, including Niklas Nikolajsen, founder of Switzerland-based crypto broker Bitcoin Suisse, and Chris Larsen, co-founder of Ripple (PoS). Larson believes that such a switch is required for Bitcoin to maintain its dominance in the cryptocurrency market. Because of how conservative the protocol is, Bitcoin has a snowball’s chance in hell of transitioning to proof of stake (PoS). Furthermore, as previously stated, key members of the community have been harshly critical of proof of stake (PoS). Adam Back, CEO of Blockstream and a prominent Satoshi Nakamoto candidate, stated that the consensus mechanism had some “fundamental issues.”