Hi,

In defense of PoW mechanism

(this is my personal opinion) Recently it seems everyone seems to be worried about the massive energy consumption of crypto and the impact on the planet. PoW is seen as this wasteful useless operation but It's more complicated than that.

Well crafted (ASIC resistant) PoW like Ravencoin or monero are actually way better than PoS for a couple of reasons and if you factor other parameters the energy spent for mining is not as wasteful as it seems, let's compare the two:

PoW with no premine is a fair way to distribute coins to users. The analogy of gold is often used and anyone with a computer can participate, to help secure the network and get rewarded for doing that. Let's see how the money flow in a system with PoW.

• It is relatively democratic, anyone can just start and earn a bit (especially if ASIC resistant coin).
• Sure there will be small solo miner to multi million dollars crypto farms. In the end in the worst case scenario if the value of the coin goes down you can get rid of your all your hardware or use it for something else.
• Yes this consume resources (mainly electronics and energy), but it provide a healthy break to avoid overheating the market, insuring a "controlled rush".
  • You cannot just easily double the amount of ASIC, GPU, etc. It requires real world investment and resources needs to be moved.
  • It also trigger massive R&D to improve efficiency of computers cheaper cleaner energy sources benefiting everyone.
• Currently the heat is mainly wasted and vented outside however there are multiple projects to use this byproduct further reducing the cost:
  • Residential heating
  • Use the heat for other process that require heat (like greenhouse, etc).

Now with PoS, it's, in a very simplified way you put money to get more and more money which you can stake and do again and again.

• There is a slightly pyramidal feel to it.
  • By staking your money you get nothing in return initially, you are not investing on more hardware, the only limit is how much you are willing to spend.
• This does not bring any value.
  • You are not spending real life resources to mine and secure the network just using your existing wealth to get more wealthy.
• The barrier to entry can be insane, you need a minimal amount to stake which can go up into the several $k depending on the crypto.
  • Sure one could argue the price of ASIC are also insanely expensive, but if your PoW is ASIC resistant this is not much of an issue.
• This could bring interesting regulatory issues:
  • In PoW, you could argue you are just buying massively powerful computers to crack complicated math, but in PoS your are just placing your money.
• It does not promote coin circulation, but just hoarding and keeping your coins in hopes it will bring more coin.

In conclusion despite all the bad press, I think PoW is a well designed system that is self regulatory and ensuring a fair distribution of coins. It uses real world resources thus partially tying the value of the coin to those resources.