PoS is replacing PoW, but some domestic mining pools have voiced resistance

The launch of the Ethereum 2.0 upgrade has led to a trend of public chain consensus mechanism transforming from PoW to PoS. Whether this shift is a development trend has not yet been determined, but voices of resistance have emerged in the industry.

Recently, at a developer conference held in Beijing, the heads of CoinIn Mining Pool, Ant Pool and OK Pool had a big debate on the same stage.

“PoS will not replace PoW, because the PoW business itself can be profitable. Looking back at the history of PoS, it will rise in almost every bull-bear transition cycle, but it will not ultimately replace PoW.” Zhu Yu, co-founder of CoinIn Mining Pool, said at the meeting that PoW will still be the mainstream.

Tian Xin, co-founder of Ant Pool, pointed out that PoW and PoS will eventually merge. Both are ways to understand blockchain, and there is no question of one killing the other.

However, Alina , the head of OK Mining Pool, believes that PoS and PoW are not substitutes. The development of PoS in recent years is an iteration in the blockchain field, and it is currently impossible to predict the future trends of PoS and PoW.

Whose cheese is moved when PoS replaces PoW?

According to statistics from Interchain Pulse, among the top 10 public chains in the world by market value, 7 of them, including Bitcoin, use the PoW consensus mechanism, which shows the status of PoW in the public chain world.

But if, in the near future, PoS replaces PoW and becomes the mainstream, whose interests will be harmed?

Needless to say, the first to bear the brunt are the miners and mines.

Tian Xin used a metaphor at the meeting, "In the mining circle, another name for mining machines is money printing machines. This does not mean that they are very profitable in themselves, but that their ability is to have continuous capabilities."

Once the consensus mechanism of the public chain is converted to PoS, it means that mining will no longer be required to produce blocks, and a large number of mining machines will face being scrapped, and those miners and large mining farms that have invested a lot of money in mining will face huge losses.

Secondly, a large number of mining machine manufacturers, represented by Bitmain, will exit the stage of history along with the mining industry under the impact of PoS transformation.

Finally, the interests of the public chain itself and community users will inevitably suffer losses. Changing the consensus mechanism of a public chain from PoW to PoS will inevitably cause joint resistance from miners, which will not only cause the division of the community, but the public chain itself will also face a fork and will inevitably be split into two chains.

Therefore, the shift of the public chain consensus mechanism from PoW to PoS is not as simple as just iterating the technical route, but also involves the interest game of multiple parties.

As the first Ethereum to switch from PoW to PoS consensus mechanism, it also has to face this risk.

In order to avoid the above situation, Ethereum adjusted the algorithm during the upgrade process and added the factor of difficulty bomb. Under the effect of the difficulty bomb, as the block height increases, the difficulty of mining increases exponentially, and it is difficult for miners to mine blocks, so they can only be "forced" to agree to switch to the PoS mechanism.

However, the conversion of Ethereum consensus mechanism was not as smooth as expected. PoW still encountered many problems in the process of converting to PoS, resulting in two postponements of the difficulty bomb. Currently, Ethereum has launched a PoW/PoS hybrid consensus mechanism Casper the Friendly Finality Gadget ("FFG")—aka"Vitalik's Casper" , which is still only the first step in the conversion of Ethereum consensus mechanism from PoW to PoS.

It is not a replacement but coexistence. The two will continue to love and hate each other.

Judging from the upgrade of Ethereum, the conversion of the consensus mechanism from PoW to PoS is a relatively long process. So will PoS eventually replace PoW?

According to Yang Guang, research director of Conflux, PoW has three major disadvantages: first, high energy consumption; second, the design of controlling the orphan block rate by the Pow consensus to ensure security leads to high latency, slow confirmation speed, and low throughput; third, the governance difficulties caused by the PoW consensus mechanism make it difficult to balance the interests of miners, users, and developers. The PoS consensus mechanism can perfectly solve all the shortcomings of the PoW consensus.

" On the premise that the security of PoS consensus can meet the needs of application scenarios, using PoS consensus instead of PoW consensus has more advantages than disadvantages." Yang Guang pointed out that another additional benefit of switching from PoW to PoS is that it avoids the problem of excessive concentration of tokens in the public chain of PoS consensus in the early stage of its release.

However, Zhu Yu, co-founder of CoinIn Mining Pool, holds a different view. “ PoS will not replace PoW, because the mining business related to PoW is profitable. PoS will definitely not be ‘killed’ by PoW. It still has strong vitality. On the contrary, looking back at the history of PoS, it will rise in almost every bull-bear transition cycle, but it will not eventually replace PoW. ”

In the view of Tian Xin, co-founder of Ant Mining Pool, PoW and PoS will eventually merge. Both are ways to understand blockchain, and there is no one killing the other. "Why is POS so popular? It's because the threshold of POW is very high, while POS has a relatively low threshold. In my opinion, PoW and PoS are two routes for the development of blockchain, and they can only coexist in love and hate each other in the future."

Alina, head of the OK mining pool, also believes that PoS and PoW are not substitutes. The development of PoS in recent years is an iteration in the blockchain field. It is impossible to predict the future trends of PoS and PoW now, because the blockchain industry has just started and various emerging consensus mechanisms have emerged. It will take time to prove which consensus can be recognized by users.

In fact, at present, there is no PoS consensus mechanism that is recognized as a safe alternative to the existing PoW in the public chain world. Ethereum is also very aware of this, so since the end of 2015 when Vitalik Buterin first proposed the plan to switch to PoS consensus, the PoS protocol designed for Ethereum upgrade has gone through repeated discussions and iterations of multiple versions, and currently plans to first adopt Casper FFG with PoW/PoS hybrid consensus, and then transition to Casper CBC with pure PoS consensus.

Even though the Staking mechanism, which emerged with the change of Ethereum consensus, is an optimized version of PoS mining, which takes into account the interests of miners and mining pools while reducing the participation of a large number of accounting nodes, the development of Staking is currently far below expectations.

Therefore, although there is a trend of PoS replacing PoS consensus mechanism in the public chain field, whether the two are alternative mechanisms still needs to be verified by time and the market. Before that, PoW and PoS consensus mechanisms will continue to coexist in the public chain world for a long time .