In this week’s episode, CoinDesk’s Christine Kim and Consensys’ Ben Edgington discuss the future of cryptocurrency mining and staking with former CoinDesk Market Reporter Will Foxley.
“I’m pro both proof-of-stake and proof-of-work. I don’t know which one wins out over the years [but] to me it comes down to capital costs,” said Foxley. “Both have capital costs no matter what and both use energy just in different ways.”
To Foxley, the new editorial director at Compass Mining, these two seemingly opposing blockchain systems are really two sides of the same coins. Both rely on computers to devote a certain amount of energy towards securing and maintaining a decentralized digital ledger.
While mining does require comparatively more computing power than staking, validators in proof-of-stake networks do still rely on energy expenditure in some form, according to Foxley.
The key question is how we define where energy comes from.
From Edgington’s viewpoint, the matter isn’t quite so ill-defined.
“Proof-of-stake for me wins heavily here,” says Edgington, “because the amount of energy needed to secure the network is something like one ten-thousandth of what Ethereum is currently using for proof-of-work mining and that’s not a small difference. That’s a material difference to the heat emissions and CO2 emissions on the planet.”
The long-run sustainability of either system depends on the types of users that will be most incentivized to participate either as a miner or staker. While miners are becoming increasingly professionalized and centralized, the more lucrative a cryptocurrency becomes, the more people will be incentivized to become validators in a proof-of-stake network and greater numbers of users will engage in staking.
For the full commentary on this topic of mining versus staking, check out this week’s episode of "Mapping Out Eth 2.0: Ethereum" as it was meant to be. Starting next week, Edgington and Kim will take over as show co-hosts.
To follow Foxley on his new voyage into the industry of cryptocurrency mining, subscribe to his new newsletter, Compass Mining Memo.
Links mentioned in this podcast:
- Justin Drake Bankless Podcast Episode (https://www.youtube.com/watch?v=bWqhn1hXvVc)
- Rayonism Hackathon (https://rayonism.io/)
- What’s New In Eth2 (www.eth2.news)
- Valid Points (https://www.coindesk.com/newsletter/valid-points)
