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Ethereum upgrades Proof of Interest, Why not Bitcoin?

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There is no technical barrier to Bitcoin's conversion to proof of equity, just a social one.

原文标题：《以太坊升级权益证明，为什么比特币不能？》

Original article by Amy Castorarchive

This is a Block unicorn

Last year, Ethereum went green. The world's second most popular crypto blockchain transitioned to Proof of Equity (POS), an energy-efficient framework for adding new transaction blocks, NFT and other information to the blockchain. When Ethereum was upgraded last September, known as a "merger," it directly reduced energy consumption by 99 percent. Meanwhile, Bitcoin, which continues to grow, consumes as much energy as the entire country of the Philippines.

Bitcoin mining, a computationally intensive process through which new bitcoins are created and calculated, has become a global concern. After China cracked down on the process in mid-2021, miners began looking for other cheap sources of energy around the world, but not necessarily environmentally friendly ones. In places like Kazakhstan, miners have strained power grids that rely heavily on carbon-intensive coal-fired power stations, causing partial blackouts and sparking civil unrest. In upstate New York, where miners have taken over shuttered factories and empty warehouses, locals complain about rising energy bills and the high-frequency hum of data center fans, and worry about the environmental damage caused by mining, the United States now hosts more than 38 percent of Bitcoin mining.

A single Bitcoin exchange consumes as much energy as an American household in nearly a month. But does it have to be? The bitcoin community has historically fiercely resisted change, but pressure from regulators and environmentalists fed up with Bitcoin's large carbon footprint may force them to rethink that stance.

Various other countries, including Kazakhstan, Iran and Singapore, have also placed restrictions on cryptocurrency mining. In April 2023, the European Parliament will pass a landmark cryptocurrency bill called "Crypto Asset Markets" (MiCA), which will require cryptocurrency companies to disclose environmental information and is expected to come into force sometime in 2024.

This may just be the beginning for the EU: The ECB has previously said it can't imagine governments banning gasoline-powered cars in favor of electric vehicles, but taking no action on Bitcoin's continued carbon dioxide emissions. "Some members of the European Parliament are already wondering why Bitcoin hasn't followed Ethereum," Alex de Vries, the data scientist behind Digiconomist, a website that tracks cryptocurrency energy use, told MIT Technology Review.

Efforts to crack down on Bitcoin's energy waste have also been growing in the United States. In November, New York became the first state to enact a temporary ban on new cryptocurrency mining licenses in fossil fuel plants, and the new law also requires the state to study the impact of cryptocurrency mining in an effort to reduce greenhouse gas emissions.

So what can be done to change things?

Proof of Work (POW) and Proof of Interest (POS)

Cryptocurrencies don't have a central guardian to oversee their public ledgers like banks do -- data for every transaction on the blockchain is shared across the chain. Instead, they rely on consensus mechanisms to agree updates.

In the proof-of-work method on which bitcoin relies, a worldwide network of computers known as "miners" consume electricity in order to be rewarded with bitcoin, and whoever solves the cryptographic puzzle first gets to add the next block, collecting new bitcoins in the process. The chances of winning bitcoin are directly proportional to the miner's computational power (the more computational power, the better the chance of being rewarded, i.e. the more mining machines, the better the chance of being rewarded with bitcoin). So there are a lot of Bitcoin nodes around the world, and they are scrambling to get Bitcoin rewards.

以太坊现在使用的权益证明证明方法，取消了工作证明的大规模能源消耗。质押验证系统不使用矿工，而是使用大量的「验证者」。要成为一个验证者，你必须存入或「质押」一定数量的Token——32 个以太坊，在以太坊的情况下。质押验证系统让验证者有机会检查新的交易区块，并将它们添加到区块链上，这样他们就可以在其质押的 Token 上获得奖励。你押的 Token 越多，你被选中将下一个交易区块添加到链上的几率就越大。

这两个系统都在努力实现相同的目标，一个系统（比特币）使用了一个国家的电力，而另一个系统（以太坊）只需要参与者质押 Token 。两者在理论上都是去中心化的，但在实践中不是。今天绝大多数的比特币挖矿是由五个主要的矿池完成的；在权益证明（POS）中，拥有大多数 Token 的人控制着区块链。

Ethereum faces different pressures

Bitcoin is just a cryptocurrency. It has a team of developers and a team of miners. But Ethereum is a smart contract platform for decentralized applications, with many projects, cryptocurrencies, NFT and NFT platforms running on top of it.

Vitalik Buterin, the founder of Ethereum, has long wanted Ethereum to use proof of interest. But when Buterin realized that developing a proof-of-equity algorithm to implement a meaningful decentralized system was "very important" - so much so that some people said it was impossible, he once wrote - he decided to let Ethereum use proof-of-work while he gradually worked through the problem, which ultimately took seven years.

Many major projects on Ethereum, including cryptocurrency trading platform Coinbase, stablecoin companies Circle and Tether, as well as NFT projects Yuga Labs and OpenSea, have publicly supported Ethereum's shift to proof of equity. It has the advantage of being attractive over proof of work. In addition to being more environmentally friendly, online transaction costs will also be lower. When Ethereum finally migrated, these projects led the way. The battle was won before the Ethereum Foundation, the nonprofit that helps oversee the platform, hit the red button.

以太坊矿工创建竞争链并保持工作量证明版本，始终存在风险。当前链上存在的所有智能合约、 Token 和 NFT 将自动「分叉」或复制到原先的链上。但是，尽管有一些人努力来创建以太坊的竞争版本，但这些努力都没有获得关注，权益证明版本胜出。

There is a political problem

In principle, a small group of people could take control and convert Bitcoins into proof of interest. Since it is an open-source project, Bitcoin's growth depends on decisions made by the community, which in theory includes anyone who wants to participate. But updates to the bitcoin code are actually controlled by a small core team of developers known as "maintainers," whose salaries are privately funded by influential groups such as bitcoin startup Blockstream; Coinbase is the largest cryptocurrency trading platform in the United States; And the MIT Digital Currency Initiative, a research project hosted by the MIT Media Lab.

These maintainers can switch like Ethereum, but they are a conservative bunch. Bitcoin is the original proof-of-work cryptocurrency. While Bitcoin's code has been tweaked and updated, it has changed little since its original vision in 2009.

Emin Gn Sirer, the founder of Ethereum rival Avalanche, told MIT Technology Review that among Bitcoin purists, there are fears of fundamental change. "Part of that fear comes from not wanting to take any risks, and part comes from the fear that this change could end up eroding confidence in the limits of other algorithms," he said. The limits include other basic features, such as the maximum number of bitcoins that can be mined, which was initially fixed at 21 million.

Jorge Stolfi, a computer science professor at the State University of Campinas in Brazil, who has followed bitcoin closely since its early days, explained to MIT Technology Review that "there proved to be no technical barriers to converting bitcoin into equity."

But Stolfi says core maintainers can't do the conversion alone. They need the support of miners, who currently collect 900 new Bitcoins a day (worth more than $20 million) plus transaction fees for the new blocks they mine. "Faced with the possibility of abandoning this business model, miners may try to keep the proof-of-work branch of Bitcoin and insist that they are the real Bitcoin and the proof-of-equity branch is just another junk coin," Stolfi said.

"At the end of the day, the battle between the new proof-of-equity branch and the" traditional "proof-of-work branch will be determined by how the price of bitcoin is divided between the two currencies, and it all depends on marketing," Stolfi said.

Bitcoin Cash (BCH) : A history lesson

The last time anyone tried to make a significant change to bitcoin was Bitcoin Cash, an effort to increase the block size so that bitcoin could expand and become a more useful actual currency.

Since 2015, Bitcoin's one-megabyte block has been filled with transactions. Networks are becoming crowded and, as a result, transactions are taking longer to process and transaction fees are increasing. A group of developers and miners have come up with a simple solution: increase the size of transaction blocks to 2 or 8 megabytes so that Bitcoin can process more transactions per second.

But that's easier said than done. As David Gerard, author of 51% Attacks on Blockchain, writes, "Even this simple suggestion led to community splits, code forks, retaliatory DDOS attacks, death threats, a split between Chinese miners and core American programmers, And other evidence that this and other issues in the Bitcoin protocol will never be resolved through the consensus process."

In August 2017, Bitcoin Cash was launched as a branch of Bitcoin software. But most miners and developers stuck with the traditional Bitcoin blockchain, and Bitcoin Cash became another derivative of Bitcoin. Even today, bitcoin OG refers to Bitcoin Cash as a "rebellion" and a "corporate takeover" rather than a sincere effort to improve the usability of bitcoin.

The proof of interest would represent a bigger change, and on the face of it, there seems little reason to expect Bitcoin to adopt it. Nicholas Weaver, a researcher at the University of California, Berkeley, and an outspoken critic of cryptocurrencies, doesn't think that will ever happen. Weaver says bitcoin miners will choose proof-of-work as long as they can profit from it: "The only way to reduce the criminal energy consumption of bitcoin is to destroy the value of bitcoin itself. If Bitcoin becomes worthless, then bitcoin mining will stop."

Bitcoin may not want to change, but if it doesn't, governments and communities may become increasingly intolerant of its waste of energy, and it may be forced to become irrelevant.

"Those who will never change Bitcoin are fighting a losing battle, and the sooner they realize that, the sooner we will all benefit," Digiconomist's Devries said.