Zcash was developed to offer everyone financial (and social!) independence. The Electric Coin Co. (ECC) has been considering whether transitioning from Proof of Work (PoW) to Proof of Stake (PoS) would help them achieve that goal more effectively.
First and foremost, such choices are not made by the ECC. The ECC makes scientific breakthroughs. It develops cutting-edge technologies, and designs software to put it all together. Whether Zcash changes depends on whether the Zcash society decides to execute the program. Eventually, whether people all across the world embrace and value the ZEC tokens that the software allows.
From its very start, Zcash has been PoW, resulting in the widespread circulation of ZEC to individuals around the world. Previously, GPU owners could mine new ZEC, but Bitmain launched specialized Zcash equipment miners (ASICs) in 2018, rendering GPU miners ineffective. The Zcash Foundation initiated discussions with the public. People ultimately opted against making improvements to the network that would make it impervious to ASICs. However, Zcash mining is believed to practically using ASIC miners today.
While many individuals prefer PoW, I feel PoS would make ZEC more desirable to a wider range of people! The advantages are substantial, and they significantly trump the downsides and hazards.
Converting to PoS: What does it do?
This is significant because ZEC is the engine that drives the long-term growth required to provide economic and social freedom to all. Since the ZEC coin binds everyone around a single objective, no competitor can pay off the Zcash ecosystem. None also manipulate Zcash to suit their own specific interests.
Miners must sell the tokens they have acquired to recoup their expenses in PoW. This indicates that the value of ZEC is under constant decreasing pressure. In addition, the expense of electricity and ASICs is under persistent rising pressure. In some ways, the economics of PoW require all miners to ultimately become ASIC-and-electricity maximalists. Each day, Zcash’s PoW miners earn $300,000 in coins, nearly all of which they must sell. This amounts to around $100 million throughout the course of a year. Stakers in PoS can keep their coins and become long-term investors (“ZEC holders”). This would add a lot of fuel to the fire of our common goal.
PoS gives ZEC more utility by providing people with another thing to do with it. People now use ZEC to purchase goods and services at over 500,000 retail locations throughout the world. For the reason that people needs to save their money from inflation and squandering central banks, to contribute to decentralized social networking sites. Moreover, to trade encrypted love messages on the blockchain. Staking would introduce a new opportunity to make a contribution to the public benefit by processing and verifying the encrypted transactions of others in exchange for a payment. The greater the utility of ZEC, the higher the demand for it.
PoW mining contributes to Global Warming
Numerous people, together with many of us in the Zcash community, have differing views on whether PoW has a harmful impact on the environment. Whatever your feelings on the subject, a sizable portion of the population will constantly refuse to acknowledge or utilize a coin founded on PoW when better energy-efficient options are available. And, in order for Zcash to achieve its full potential as a global currency, it must be accepted and useful by as many users as possible.
PoS gives greater security and performance at low cost
In PoW, the community would only have two alternatives if miners defected and attacked the system rather than supporting it: It is either 1) sucking it up and letting them get away with it—as has happened numerous times with PoW coins in practice, culminating in irreversible theft cases from their users—or 2) destroying the significance of all mining ASICs in the world by modifying the PoW mining algorithm, thereby punishing both loyal PoW miners and attackers, which has also occurred with PoW coins. Unlike PoS, if stakers target the system, the community can only slice (decimate) the coins of those stakers who took part in the attack.
As a result, because it cannot realistically threaten to penalize defecting miners, the community in PoW mining must overpay for security. To keep the miners faithful, they must instead promise them big future benefits. PoS provides superior security—particularly economic finality. This ensures that you will receive a payment securely. Importantly and efficiency at a lower cost to the community.
PoS: more decentralized, resistant to attack and takeover, and egalitarian
Only the largest and best-financed mining operations can regularly earn a profit in PoW mining. They push out smaller players. Even a new ZEC holder can participate in PoS and earn — without revealing their location or name to anyone!
In my opinion, converting Zcash from PoW to PoS greatly improves the utility, security, and decentralization of the Zcash network, as well as the utility and demand for the ZEC coin.
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