ETC Proof of Work Course: 37. POW Is Not Inefficient nor Wastes Energy
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In the previous class, 36, we explained that it is not the work in proof of work (POW) that makes blockchains unscalable, and we talked about the elements that make these kinds of networks limited in this dimension.
In a similar vein, in this class, 37, we will explain that POW blockchains are not inefficient because they require so much computing power and electricity to achieve consensus.
Indeed, the high cost of producing the cryptographic stamp is precisely the point of these systems!
This is because proof of work is the only mechanism that enables consensus with the highest security guaranty known to man.
Debunking the Supposed Inefficiency of POW
After the invention of Bitcoin, people with no understanding started to falsely question the “inefficiency” and “waste of energy” of the POW consensus mechanism. The fallacy that proof of work is inefficient is debunked by two arguments:
The high cost of producing the cryptographic stamp is precisely the whole point of the method. Without that work done, then there would be no information available for participants worldwide to discern which is the correct block or chain in the network in their complete isolation.
The true inefficiency is NOT proof of work. As we said in the previous class, proof of work and proof of stake are equally inefficient in terms of scalability because the rule of full replication of the data is what obligates the protocol design to create smaller blocks that fit less transactions per block.
Debunking the POW Waste of Energy Fallacy
The fallacy that proof of work wastes energy is debunked by four arguments:
As we taught in previous classes, POW enables consensus between all computers in a global permissionless peer-to-peer network with the highest security guaranty known to man.
POW provides a focal point for entry, exit, and reentry of any participant in their world in their complete isolation without any certification, license, special interest dispensation, or authority approval.
POW protects all the history of transactions of the ledger by forming a practically inviolable cryptographic wall.
POW creates hard money because the cost of creating blocks is equal to the cost of creating the cryptocurrency, just like gold in the physical world.
All these benefits combined have unprecedented value for human action globally, which is hardly an inefficiency or waste.
Proof of work is good for the world.
Thank you for reading this article!
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