Bitcoin is a protocol that uses Proof-of-Work (PoW) as its consensus mechanism. This is a mechanism that involves significant power consumption that increases as the value of BTC rises, but at the same time, it guarantees the high immutability of its blockchain.
Other cryptocurrency protocols, on the other hand, use Proof-of-Stake (PoS) because it is a less energy-intensive mechanism and allows for faster block generation. It is, however, somewhat less secure than PoW.
For example, Ethereum was born with PoW, but then over the years decided to switch to PoS. Could something similar happen to Bitcoin?
What if Bitcoin becomes a PoS system?
As of today, the answer is definitely no.
In fact, no one has the power to arbitrarily change the Bitcoin protocol, and right now there is not a large majority of Bitcoin users who would accept such a radical change to it.
To switch from PoW to PoS requires a complete change in the system by which blocks are created, so much so that, for example, Ethereum even had to create a new PoS-based blockchain, deciding to abandon the old PoW-based one once the final switch is made.
Perhaps, the conditional is a must, in the relatively distant future even for Bitcoin a strong majority of users could arise, who would approve of such a radical change, but as of today, we cannot even glimpse this scenario.
Moreover, although some argue that Bitcoin’s energy consumption will continue to increase at a high rate until the switch to PoS becomes necessary, in reality, however, in the long run, Bitcoin mining’s energy consumption is likely to go down, due to the continued halving of miner rewards once every 4 years.
That said, no one, however, forbids imagining purely theoretically what Bitcoin’s move to PoS might entail.
In reality, it is not that difficult. In fact, should the decision be made to replace PoW with PoS on Bitcoin as well, the process could even be very similar to that done by Ethereum.
However, PoW allows the block time, on which Bitcoin’s monetary policy depends, to be kept very constant over the years: a block is formed every 10 minutes or so, and a halving of the BTC in premium every 210,000 blocks, or just under 4 years. With PoS it may be more difficult to keep this monetary policy fixed and rigid.
The disadvantages of Proof of Stake
The move to PoS then would create significant differences between nodes with more BTC in staking and the others. Right now, however, Bitcoin’s 10,000 or so public nodes are all the same, all with the same power. PoS, on the other hand, inevitably leads some nodes to handle more tokens, in effect making them somewhat more “powerful.”
It would certainly make miners disappear since PoS does not involve mining. This would suddenly and dramatically reduce energy consumption, which is currently perhaps the single biggest problem for Bitcoin.
The fact that PoS turns out to give slightly less security than PoW, on the other hand, might not even be that significant, because the current level of security is so high that even a slightly lower degree perhaps could be considered tolerable.
Instead, the fact that PoS protocols are often less decentralized could be a problem for Bitcoin, for example, if a few large nodes with immense amounts of BTC immobilized in staking, and thus from great decision-making power, were to be formed.
Perhaps this is one of the main reasons why the majority of Bitcoin users do not want changes in the underlying protocol, because Bitcoin’s high degree of decentralization is precisely one of its greatest strengths, to be protected and maintained as much as possible.