Privacy-enabled coins ftw! All commodities require energy. Since crypto is a commodity it can serve as global digital money. The economic function is to provide property rights to 8B people as well as a global settlement network that has already cleared $17T in 2022. https://www.youtube.com/watch?v=FIj-r7kR6N4 https://preview.redd.it/o04z31jyocn81.jpg?width=1199&format=pjpg&auto=webp&s=86e73f13b0b3f2001b27b1a61facccb2aa29432d Proof of Work is the most important innovation within blockchains and why blocks in blockchains even exist. The key aspects as to why Proof of work is so important and cannot be replaced by PoS are: 1) Fair Coin Distribution No scammy ICO , premine or instamine is created and miners are forced to sell most of their coins to cover the expense (mainly ASICs + electricity) which allows a fair distribution and competition in the minting process. 2) long term incentives With coins that have premines/instamines/ICOs the incentives are such that the creators benefit from pumping and dumping and creating more altcoins/ICOs to "fundraise" more rather than miners who have sunk infrastructure costs on mining a particular algo(The more we approach Moore's cliff the longer these time preferences become as we have been seeing) 3) Decentralization of Minting Since mining BTC is so competitive, profit margins are typically thin and thus new entrants that either use a better tool to mine (ASIC) or find cheaper sources of power(typically green due to the economics) can quickly gain market share making lasting monopolies difficult. Even if a main ASIC manufacturer appears to have a large market share we can see this quickly change due to a single malinvestment or a mistake when developing the newest ASIC. Power is a resource that comes from many sources and allows many locations around the world to remain competitive for unique reasons. 4) Sybil resistant Proof of work allows miners to order transactions where there are real tangible costs to transaction selection and fake nodes cannot simply flood the ecosystem in order to attack the network 5) Game Theory The game theory of Bitcoin is such that it is more profitable to mine bitcoin and secure the network than attack it because any attempt at a 51% attack or reorg the chain would quickly be caught once the attack was executed and the loss in resources would be profound. 6) Objective Security - Proof of work gives us an objective and measurable degree of security where risk assessments can be made with greater precision that isn't afforded with more subjective forms of security. 6) Less Regulatory Scrutiny - One critical aspect to how securities are defined and regulated by governments(for the USA research into "Howey Test" but other countries have similar regulations) deals with who controls the money/investment and a common enterprise profiting from it. Because Proof of work allows anyone to become a bank that mints and secures the network that no-one can control courts have already determined that Bitcoin cannot be considered a "security" and thus would not fall under those regulations like other coins/ICOs that lack Proof of Work. PoW alone is not the only determining factor on defining what is and isn't a security but an important one. 7) Incentives to resist centralization The game theory and incentives of Proof of stake all lead to centralization because there is no external need to compete for energy and efficiencies. The creators or large whales who buy into the coin will all form a controlling oligopoly who can simply collect taxes (fees) for no effort and censor with no effort unlike with proof of work Proof is stake has nothing at stake. They all try to somehow artificially make up for the fact there's no cost to attack. They're all basically trying to fake work without doing work. The slashing or whatever the preminers are calling it is after the fact. After the rich guys have forked off, which they can do because they're both producers and validators, they don't care about the value of that other chain left behind. The majority staked coins have already decided what's the main chain. Now if you want to overrule them, the CEO of that blockchain is going to need to repeatedly roll back and convince everyone to stick to the chain he decides by his authority as the valid chain. This has already been done after an embarrassing smart contract hack where the premine gang lost their coins. Proof of work attack cost is upfront cost and easily identifiable so the rogue miners will have lost money doing nothing except attempt a single double spend before nodes reject their blocks. Yes they can carry on attack for a long time and publish a long reorg which would have massive cost but a small fork choice change to automatically reject reorgs past certain number of blocks including any double spend will fix that. All it takes to overpower rogue miners in bitcoin is $50 rasp-pi rig. When security of blockchain depends on the coin created by itself and only people with staked coins can validate blocks, you're FUBAR when someone with enough coins wants to attack the chain or force changes to their own benefit. Moores cliff means old ASICs do not become obsolete as quickly. The newest ASICs are already down to 3nm , to put things in perspective Intels most expensive retail chips are still at 10nm , there really isn't that much more room for BTC ASICs to shrink which means decentralization of mining . There are also many fundamental misunderstandings people have towards the advantageous and disadvantageous in industrial mining. A few things you need to understand about mining – Chipmakers like TSMC and Samsung as 2 examples (Soon to add intel to this list) are the ones that are commissioned to make most ASIC chips(not the full assembled ASIC miner) based upon designs from Bitcoin ASIC manufactures. These foundries are involved in diverse chip making and obviously aren't directly involved in Bitcoin or its politics but fulfilling large orders from whoever commissions them. The most popular ASIC manufacturers for Bitcoin right now are Whatsminer, Innosilicon, Bitmain, Caanan, Ebit, and Ebang. Many more ASIC manufacturers exist but they come and go based upon merit in a highly competitive race. For example Bitfury used to be one of the best manufacturers , and now has very little market share. Bitmain used to dominate , and than made some poor design decisions (lead engineer left them) and now competes with at least 4 others for the most efficient ASICs. This is a highly competitive and changing ecosystem. Large miners main advantage is economies of scale over smaller miners. If you are an ASIC manufacturer you have large advantage over others because you can premine off your newest hardware and sell you last generation ASICs to others. This does occur , but is simplistic view and not the full picture. The reality is ASIC manufacturers Sell their newest ASICs with partners for industrial mining , sell their latest hardware to smaller miners for a premium, and mine themselves, while at the same time selling older ASICs on the market. Why do they do this? Because ASIC manufacturing is highly competitive and they need to hedge their investments as quickly as possible and de-risk from regulatory concerns as well. Amateur mining doesn't come with many risks of manufacturers who come and go (they are forced to make huge investments in ASIC orders and have long development pipelines fraught with risks) Amateur mining does not have the overhead of employees , security, regulatory compliance, building costs, tax liabilities , etc... Now here is what is interesting, this last generation of ASICs that went from 7nm to 5nm in size did not have the same efficiency jumps as previous drops. This is because 5nm is already at the edge of what can be done with silicone, we can possibly shrink down to 2-3nm but it gets extremely difficult as the gates start to get the size of a few atoms wide and quantum concerns and heat become a very big concern. Why is any of this important? In the past when ASICs went from 14nm to 12nm there was larger improvements in efficiencies which gave an advantage towards those who could manufacture and mine themselves and their partners. ASICs would become obsolete sooner 8 months to 1 year at times which makes it difficult for amateur miners to recoup their investment in an ASIC especially those that by the slightly older generation equipment. As moore's cliff approaches (we are already there as I don't see 2nm anytime soon) this means that this latest generation of ASICs will have a much longer shelf life which means the variable above is much less important and the greater importance is a complex mix of what sort of electrical rates you can get - overhead costs. Now remember what I said about the advantageous of amateur mining. Industrial mining has other advantageous too like economies of scale and specialization but many disadvantageous as well. What this ultimately means is we are entering a period of commoditization in mining(the opposite of centralization). The economics force this direction. industrial miners will still exist but more and more amateur miners will enter the ecosystem. Eventually new companies will be also created that create products to recycle the waste heat (already exists , but prices will start to drop considerably for consumers) In POS, as far as I understand, any small time player can stake and get the same return on investment a huge whale would get. The largest whales will always get more and more stake for 0 effort due to collected fees from staking which is proportional to their stake . Thus even if you equally distribute all the stake initially it will become centralized over time. https://youtu.be/bBC-nXj3Ng4 https://youtu.be/ncPyMUfNyVM The "environmental impact of using electricity" seems very pedantic and cherry picks cases for criticism. There are countless other uses of electricity in the world which no one is talking about which provide very little contribution to societies. People are so brainwashed it's sad, when presented with a system to move away from the global rot of fiat currencies and central banks, as well as solving the unbanked crisis (to name but 2 crucial benefits). All they can talk about is energy use. Nothing of value can exist without energy. "Physics of value". How much energy do sport events use and environmental damage do they cause, for entertainment purposes. God forbid humanity uses some of it's electricity so countries can have financial security and protection from the countless financial crashes imposed on the populous. No let's stick with the same corrupt and limiting system which only serves the 1% I.e. those living furthest up stream and closest to the source. Excellent logic, at least you'll all be able to blame your respective governments for the continued increase in cost of living, lack of access to education, housing, food and energy. Because of course....these issues couldn't possibly be linked to the current system for value exchange and "wealth preservation". No let's stick with the debasement of fiat currencies and the completely unbalanced distribution of economic gain leading us to war and social unrest. Yeah that sounds so much better for the planet. Our children will be eternally thankful we were too manipulated to create a better future. Privileged middle and upper class people living in the developed world can easily ask; "Yeah, but, do we need to use so much energy for something that presently provides so little benefit?" But try asking someone in Africa, South America and any of the other financially ravaged countries where people have their fiat savings taken away by governments the same question. I think you'll get a far better answer from them than you will on Reddit. As for energy think of how much energy countries, people and creatures require to protect themselves. Is the amount of military spending carried out by America and Europe useful energy consumption. I would argue yes, you cannot protect your way of life without energy and force. Again, physics, energy and force. You require energy for protection, most things require energy to exist. You are falling straight into the elitist trap of daring to tell people what they can use their energy for which they either create or purchase. Very slippery slope which will not end at Bitcoin mining. The Bitcoin network requires energy to protect itself, the energy to protect it's network participants stake. It's never been hacked. The most secure digital network with a non biased approach to users and participants, accessible 24/7, border-less and with no single point of failure. No to think about it, you're completely correct, there's no benefit to such a digital facility in an ever increasing digital age with debasement of fiat and soaring inflation. This narrative will be proven baseless eventually like so many other misinterpretations of positive developments in human history. The lies and manipulation always get uncovered in the end, just a shame so many people have to suffer as a consequence of propaganda and conformist indoctrination. Those opposing it are supporting oppression on the unbanked and those impoverished by their centralised currencies and governments. But Bitcoiners are the ones being questioned on their ethics and morals. How beautifully ironic this tale currently is.