Major Bitcoin & Crypto Companies Warn of 'Extreme' Risk in Proof-of-Stake Systems
The risk of corporate capture is extreme in proof-of-stake (PoS) systems as PoS transforms novel financial systems into pure plutocracies, dozens of US-based high-profile companies warned in a letter to the US Environmental Protection Agency.
The companies were firing back at the attack by Congressman Jared Huffman who recently described Bitcoin (BTC) mining as something that is “poisoning our communities,” and contributing to “air, water, and noise pollution.” According to the companies, Huffman's letter to the EPA is “premised on several misperceptions about bitcoin and digital asset mining, that have previously been debunked or conflate bitcoin mining with other industries.”
The two biggest cryptoassets by market capitalization - Bitcoin (BTC) and Ethereum (ETH) - are using the proof-of-work (PoW) consensus mechanism, while ETH is planning to switch to PoS.
While the letter was signed by multiple Bitcoin mining companies such as Core Scientific, Argo Blockchain, Foundry Digital, and others, including one of the biggest BTC holders, MicroStrategy, multiple other, more diversified major crypto players have also signed the rebuttal. The list includes Digital Currency Group, Galaxy Digital, Grayscale Investments, SBI Crypto, Bitgo, and others.
In his letter, Huffman wrote that "Less energy-intensive cryptocurrency mining technologies, such as PoS, are available and have 99.99 percent lower energy demands than PoW to validate transactions.”
However, according to the players in the BTC & crypto industry, the reason why PoS is unsuited as an alternative to Bitcoin’s energy-intensive PoW-based mining process is that it tends to accumulate too much power over the network in fewer hands. Many crypto owners opt to store their coins
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