Why Proof of Work Rather Than Proof of Stake Is The Path To A Green Infrastructure
By on ALTCOIN MAGAZINE
One of the go-to arguments to support Proof of Stake is the assertion that it would allow people to verify transactions without the expenditure of such a high amount of energy, and therefore be more eco-friendly.
Energy spent on bitcoin mining is rising, and for many of the people reading this article, it is only expected to increase constantly, if not exponentially. The price of graphics cards are rising and miners are moving their rigs to Iceland to reduce cooling costs and to take advantage of geothermal energy. Others are setting up shop in China or Russia, aiming to use cheaper energy derived from coal. Either way, these moves are about maximizing profit margin. It’s all about reducing expenditure on energy and letting block rewards roll in.
On its face, verifying transactions without computer work would do wonders for reducing energy consumption and in turn create a greener block-chain. However, among other arguments against PoS, including my opinion that it lays the foundation for a far less robust financial democracy in the event of mass adoption, I, in fact, believe that PoW could be a catalyst to the adoption of sustainable energy sources, and ultimately be better for the environment.
Is Sustainable Energy a Better Long Term Investment than Traditional Fuels?
This article would be greatly improved if I had some data about the energy production of a $5000 solar panel over a month vs the energy production of $5000 of coal, but I can’t seem to find such data. Also even if I could, solar panels are just one form of sustainable energy, and the cost and energy output and complications of each form will vary wildly. So instead I’d like to look at the bigger picture
As time goes on, more and more of the finite (or maybe not finite but very slowly regenerating) supply of fossil fuels will be extracted and burnt. If we look 100 years(or likely less) down the road, it’s conceivable to think that extracting these resources will become increasingly expensive, as they will be harder to locate and more scarce.
The combination of growing scarcity and more money being spent on their extraction will result in a gradual increase in price. This effect will be perpetual as long as the demand for energy remains the same (and it may well increase if the population continues to rise and we become more and more reliant on machines). At some point, it must surely be more cost-effective to turn to some form of renewable energy where the cost is mostly upfront with some money being spent on maintenance. If this isn’t currently the case, by my thesis, it will be at some point.
If you don’t buy the idea that fossil fuel prices will rise as time goes on for the reasons I mentioned, or for a different reason that I haven’t mentioned, then consider this: it’s conceivable to believe that the price of obtaining energy through renewable means will decrease as time goes on due to the general improvement of science and technology. By one scenario or the other (or likely a combination of the two), the price of obtaining 1 unit of energy via green means will eventually fall below the price of obtaining one unit of energy via fossil fuels.
Side-note: on top of this, renewable energy requires a lot less upfront investment than fossil fuels and is easier for people to get involved with. If I wanted to start mining bitcoin with my own energy, it would be easier and cheaper for me to buy some solar panels or use a watermill if I lived near a river, etc… and use that energy for mining. To produce and use my own fossil fuels would be a far more convoluted and expensive process. This has the added effect of helping to decentralize energy production, which will sound like a huge benefit for many crypto-heads as it is consistent with the philosophy of block-chain.
What is the Best Way to Catalyze Green Energy Adoption?
It is my belief that we can’t trust the morals of politicians and CEO’s to make a significant effort to use green energy. The backlash against the Green New deal (simply an acknowledgment of the problem of climate change, and a suggestion of how workers could be protected against green energy adoption) has added to my distrust in government pertaining to this issue.
Though voting for environment-conscious candidates, and protesting against reckless CEO’s and science-ignorant politicians do make some difference, the best bet for a driving force for green energy adoption is a positive impact on the bottom line. Greed is one of the most significant consistencies in the human race. If it’s profitable for business then it will be adopted, and the more adoption that happens, the cheaper green energy will become, leading in turn to more adoption.
I see green energy adoption as a cycle for which there needs to be a business catalyst. That catalyst could be the crypto mining industry investing in green energy. If Bitfury, Bitmain, and other big mining firms saw the potential for renewable energy in maximizing profit and started to purchase windmill rigs and solar farms, that would drive more money into the green energy industry, as well as create more competition in the industry. Competition in the industry is almost always good for the consumer, as technology improves to gain an edge over other competitors, while prices typically decrease. These two things would help to drive green energy adoption elsewhere, and the effect would compound itself. The importance of the crypto mining industry in making this move will be more significant the bigger crypto becomes.
To conclude
To reiterate the introduction, miners care about decreasing expenditure on energy in order to increase profit margin. If this could be done by using green energy sources (and according to my thesis, it will be), then miners will simply follow the money and start investing in green energy, which could drive the renewable energy industry forward and create a knock-on effect. Proof of Stake simply removes the need for energy to add blocks to the blockchain and doesn’t do anything to participate in the push for green infrastructure.
If we want a new financial system, why not support it with a new energy system, one that fits in with one of the philosophies of crypto and block-chain; security for the masses. It’s apparent to me that the crypto community is one of the best-suited communities to adopt this challenge. The community is tech-savvy, future-facing, and most importantly receptive to new technology and new approaches to problems.
