2021 PoW Blockchain Wars: Bitcoin vs. Elon "Dogefather” Musk

Bitcoin’s PoW consumes 0.6% of the world electricity production. That's not enough! Let me explain you why…

For doing the Proof-of-Work you need resources: mainly Hardware and Electricity and as well as management and rent.

As of 15th of March 2021:

$919,009,970,863 Bitcoin marketcap

$68,502,504,421 Dogecoin marketcap

$21,748,287,094 Litecoin marketcap

Total Marketcap secured by PoW is sum of all coins marketcap and other digital assets secured by the PoW.

What is a 51% attack?

So called 51% attacks are reality in cryptocurrency land. Someone who controls more than the simple majority of the PoW power invested into the blockchain can mine on a hidden chain fork while sending coins one the public chain to an exchange. Next, the attacker sells the coins on the exchange for some other cryptocurrency and withdraws his new purchase. Then he releases the hidden chain where he kept all coins (not sending them to the exchange) to the public. The public accepts the longer chain as the correct one, since it is longer and has more PoW accumulated because the attacker had the majority of the mining power (even if just temporarily rented for the attack).

Why is Dogecoin way less secure than Bitcoin or Litecoin?

Bitcoin is mining 6.25 BTC every 10 minutes. 50k USD * 6.25 / 10 = 31,250 USD per minute (this is without fee reward which adds around 8% to this)

Bitcoin transaction security is around 1m USD per half an hour while Dogecoin and Litecoin security is only 200k USD for the same timeperiod.

The security of every PoW blockchain is always lower than the earnings for doing the PoW. Hardware manufacturers need time to produce the special hardware needed for doing the PoW. If cryptocurrencies were stable the resources spent on PoW would approach the earnings leaving just a small profit margin for the miners and driving them to become more and more efficient.

Further steps to secure the new PoW global ledgers and get most out of its PoW:

  • Drive competition to have a multitude of hardware manufacturers of ASICs so that no monopoly or oligopoly develops.
  • Have childchains in parallel. Each of them with additional child chains thus creating a tree of chains.
  • Having a rolling checkpointing mechanism implemented like with æternity blockchain which does not allow block-reorganizations longer than k blocks. This works as long as the nodes can be online every k*blocktime.
  • While Proof-of-Stake has been promoted by many new blockchain projects as the solution to the energy consumption it seems pretty clear: no matter what kind of "secure” PoS gets designed, it becomes more secure as soon as one adds PoW in a meaningful way to it. That's why æternity blockchain is working on PoW-PoS-hybrid "Hyperchains” consensus. Æternity hyperchains are making the best of both PoS and PoW worlds.
  • Ultimate solution: have a Proof of Human instead of Proof of Work where a 1:1 mapping of humans to cryptographic keys gets created. This way we could enter a new global democracy. Combining pseudonym parties with blockchain technology seems to be one way of doing it.

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