Do PoW based cryptocurrencies have a future?
In the long term, probably not. No matter how much Bitcoin, Monero, Dogecoin, Litecoin, Zcash, Kadena, and a hundred others may not want it. The trends are not favorable. We have all seen the rise in energy prices, heard politicians’ predictions on climate change, and personal CO2 figures. And it is only a matter of time before cryptocurrencies based on the PoW mechanism will be fully engaged. In my opinion, there are several ways to change the future:
1. Renewable energy. Bitcoin mining already uses more than 58% of renewable energy. If we could achieve 90–95%, there would be little to hang on to and moralize about. But this is all about energy. C02 is another argument, and politicians have enough stupidity to go around. Be sure.
2. PoW can be replaced by uPoW. In my search for information, I found this document: https://eprint.iacr.org/2017/203.pdf In a complex technical document, it is noted that it is possible to complement the PoW mechanism with useful calculations. Chapter 7 answers the question of how this applies to the Bitcoin blockchain a little more clearly. The sentence starts with the word “Unfortunately”. It requires the approval of a majority of the “Mainers” to change the current system to the uPoW. I have no idea how this could be done in practice. But it could be the hope.
3. Move to a PoS mechanism, as Ethereum does. I believe that Litecoin, Monero, Dogecoin, and others could do this. But what about BTC? There is no organization behind this blockchain. It might be possible to do it somehow, but only in theory for now. It would be very much like changing the foundation of a house and hoping that the building would hang in the air somehow.
4. Can mining equipment use less energy? Maybe it could. The aim is to earn more with fewer expenses. It just takes “a small step” to do the same thing with less energy. I do not doubt that people with double brains think how to do that.
In summary, it is difficult to see any clear solution. Later this year, we will hear from world leaders whether Bitcoin is doomed or not. Not everything, indeed, depends on them, but certainly a lot. Remember Nokia’s history? The mobile phone giant ignored its competitors, look where it is now. Whether Bitcoin will be dethroned is a very difficult question, and one that can only be answered by “I believe” or “I do not believe”. If you think it has come forever, congratulations, you are in the crypto sect.
