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After Ethereum (ETH), This Cryptocurrency Could Switch to Proof-of-Stake

coingape.com 04 August 2021 12:08, UTC
Reading time: ~2 m

Ethereum (ETH), the world’s second-largest cryptocurrency by market cap is moving from a Proof-of-Work (PoW) mining consensus to Proof-Of-Stake (PoS) with ETH 2.0. The decision for the major upgrade was taken in light of growing scalability issues on the blockchain. Now another PoW cryptocurrency is considering switching to PoS.

ZCash (ZEC), the privacy-focused cryptocurrency may become the next digital asset to move to PoS. Electric Coin Company (ECC) that developed ZEC published a blog post on Tuesday titled, “Should Zcash switch from Proof of Work to Proof of Stake?” In the blog post, the firm talked about various aspects of the PoS consensus and how it could help ZEC become more valuable.

The firm made it clear that the decision to make the switch would be solely in the hands of the community, but they believe PoS would help the blockchain become more useful and valuable.

“While there are many who prefer PoW, I believe that PoS would make ZEC more valuable to more people! The benefits are great, and they far outweigh the drawbacks and risks. Switching to PoS eliminates the downward pressure on the price of ZEC and adds additional utility for ZEC.”

PoS Blockchain in Demand After Bitcoin Mining FUD

The recent FUD around Bitcoin mining which uses the PoW algorithm has also played a part in other blockchain networks wanting to make a switch to PoS. ECC also cited it as one of the reasons while mentioning they don’t believe in the common perception but do believe PoS offers much better security and performance at a lower cost.

ECC claimed PoS mining would allow miners to do more in the network compared to PoW where all their mining revenue goes towards mitigating expenditure. With PoS, miners won’t have to sell as they can stake and become long-term investors.

“With PoW, miners must sell the coins they’ve earned to pay their costs (electricity and ASICs). This means there is constant downward pressure on the price of ZEC and a matching upward pressure on the price of electricity and ASICs. . In PoS, stakers can keep the coins they’ve earned and become long-term investors (“ZEC holders”). This would greatly add fuel to the fire of our shared mission.”

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