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A Contentious Debate Erupts Over Whether Bitcoin Should Switch to PoS

18-Sep-2022 By: Sudeep Saxena
A Contentious Debate

Now that the much-anticipated network upgrade is complete, the crypto world is arguing heatedly over whether Bitcoin will follow Ethereum.

Thursday morning saw The Merge, a change to the way tokens are created and transactions are ordered on the Ethereum (ETH) blockchain. This suggests a change to the proof-of-stake model, which requires staking ETH in order to process transactions and create new coins.

It is expected that the update would make Ethereum 99 percent more energy efficient, which will greatly appease regulators and institutional investors who have long criticised the carbon intensity of crypto. On Thursday, Ethereum creator Vitalik Buterin retweeted a prediction that the combined network would lower global electricity use by 0.2%.

However, punk6529 (an actual user) stated that "the optimum conclusion for cryptocurrency at large at this moment is Bitcoin utilising Proof of Work and Ethereum using Proof of Stake." They think it'll be smarter to try out new things simultaneously with the two biggest ecosystems, giving themselves more potential outcomes.

Depending on how well Ethereum's new staking technique performs, authorities "may progressively require the proof-of-work cryptocurrencies to cut down energy use," according to Marion Laboure, a research analyst at Deutsche Bank.

She further speculated that "may present Ether as an alternative to bonds or commodities for institutional investors" due to the lucrative returns offered in exchange for staking Ethereum tokens to facilitate transactions.

By validating and rejecting transactions, miners earn Bitcoin tokens using the proof-of-work mechanism. In contrast, Ethereum's staking option is predicated on people buying a lot of Ether and then being trusted not to damage the network.

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