Leading Blockchain Participants Come Together to Form the Proof of Stake Alliance
Amid regulatory uncertainties, the Proof of Stake Alliance forms to help educate legislators, regulators and other stakeholders on the benefits of the Proof of Stake consensus algorithm.
(Washington DC, August 1st) A number of leading projects, service providers and industry organizations joined together to form the Proof of Stake Alliance (“POSA”). The primary mission of POSA is to educate regulators and lawmakers about the benefits of Proof of Stake, a consensus mechanism that is more efficient, decentralized, and environmentally friendly than Proof of Work, as well as to address regulatory uncertainty that could limit this innovation.
POSA members will proactively collaborate with stakeholders to address a number of key issues, such as the following:
- Representing Proof of Stake protocols’ and related projects’ unique interests in Congress and to regulatory agencies;
- Educating those both in and outside of the government on the benefits of Proof of Stake;
- Serving as a platform for the staking industry to voice and create a forum to develop best practices;
- Helping shape the legal and regulatory framework around stakeable assets to spur the already fast-growing sector of the blockchain industry while also protecting token holders, stakeholders, and consumers;
- Working on the key areas of regulatory uncertainty including the tax treatment of Proof of Stake assets and securities law matters.
The benefits of Proof of Stake networks are clear. It offers efficiency, environmental and economic benefits. Proof of Stake networks offer a significantly lower barrier to entry and do not require specialized mining hardware or substantial energy usage to operate. In addition, the distribution of stakeable assets is highly encouraged by Proof of Stake projects, as the security of the network depends heavily on having a decentralized group of network participants, instead of a handful of powerful mining pools.
Proof of Stake is not a technology which has been developed on the fringes. Major Proof of Stake based protocols have been developed by researchers at leading American research institutions, such as MIT, Stanford, Cornell, and UC Berkeley. And many leading Proof of Stake networks are the products of engineers who previously worked at leading American technology firms, such as Apple, Google, Amazon, and Facebook.
Adoption of Proof of Stake has been accelerating since 2018, with new Proof of Stake based protocols such as Tezos and Cosmos seeing increased usage and more than a dozen staking-based blockchain networks set to launch by 2020. Ethereum, the second-largest cryptocurrency by market capitalization, aims to begin its transition to Proof of Stake in 2020.
Regulatory uncertainty has the potential to slow the growth and adoption of Proof of Stake networks putting the United States at a competitive disadvantage on a global basis. The United States simply can not compete with China, Eastern Europe, and Nordic countries where the rewards to mining (i.e. Proof of Work consensus mechanisms) disproportionately accrue.
Billions of dollars have already left the United States — along with talent and innovation — into other areas of the world because there is no clear regulatory framework for blockchain networks and their related assets. The Proof of Stake Alliance believes that this is the time for action. With proper education and the development of a clear regulatory framework that addresses the relevant risks, a decentralized staking industry can thrive in the United States. This will benefit consumers, assist in the development of a new, important sector of the blockchain industry, and bolster the US economy with organic GDP and job growth.
The following projects and organizations have joined the alliance as the inaugural members:
POSA has an open membership and invites new members who are interested in furthering the shared mission. For more information, please visit proofofstakealliance.org
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