Tuesday, 30 May 2023

Crypto News

Bitcoin and proof-of-stake have natural ‘synergy’: Bitcoin Builders 2023

Bitcoin and proof-of-stake have natural ‘synergy’: Bitcoin Builders 2023

Less than a year after proof-of-stake (PoS) became the consensus mechanism for the Ethereum blockchain — the industry’s largest blockchain network — researchers have found that PoS can complement Bitcoin. 

Stanford University professor David Tsè spoke to Cointelegraph at the 2023 Bitcoin Builders conference in Miami, Florida, about his team’s findings on Bitcoin, PoS, security and energy consumption. 

Cointelegraph reporter Joe Hall and Stanford University professor David Tsè at Bitcoin Builders 2023. Source: Cointelegraph

Tsè facilitates a research lab specializing in blockchain consensus protocols at Stanford University in California. He said the first consensus protocol it looked into was Bitcoin’s proof-of-work (PoW) protocol.

“Bitcoin was like our first love,” he said. Through this “deep understanding” of Bitcoin and then an understanding of PoS protocols, he continued to say that his team found a “very natural synergy” between the two.

“By building an extra layer of protocol that shares the security between Bitcoin and PoS, we find that it will become very strong, giving you a very strong security property.”

Tsè pointed out that on its own, the PoS blockchain has two major limitations: Due to it being based on proof of “stake,” or capital, it’s hard to start a new blockchain due to the need to attract stakers. He said, “If you don’t have capital, you don’t have enough security.”

In addition to security and capital being intertwined, the Stanford professor also highlighted that security is what he calls “short range” on PoS, whereas Bitcoin is the opposite, with stronger “long-range” security, making them “the perfect complement to each other.”

He wants it so that people can build distributed ledger applications in a more simple way:

“Security is very important, but instead of everyone trying to fragment and compete for limited capital, take capital from a huge reservoir which is Bitcoin, and use it as economic security for all these chains.”

In such a method, Tsè envisions developers being able to focus on building the application, which is the core purpose of creating a blockchain network, rather than on recruiting the stake to secure the chain.

Related: Bitcoin self-custody advocate explains why on-ramps are key to adoption

One of the major pushbacks toward building on Bitcoin — and PoW systems in general — has been the energy consumption associated with such protocols. Tsè said that…

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