e-Cash Informer shared: Why is eCashOfficial integrating Avalanche Proof of Stake (PoS) on top of the existing Proof of Work (PoW) consensus layer? Mega Thread.

Proof of Work Environmental Concerns: One of the biggest criticisms of Bitcoin (and other cryptocurrencies that rely on proof of work) is that it’s bad for the environment.

You always hear how Bitcoin mining consumes as much electricity as this or that country, & the bigger #Bitcoin becomes, the more electricity it will consume.  As recently as today, EU parliamentarians pushed to limit Bitcoin use over energy concerns.

Another criticism! To mine Bitcoin, you need expensive hardware known as ASICs that can cost 10K+ USD a rig or more. Such a high barrier to entry limits the number of people who can participate, which can lead to the network becoming more & more centralized.

Other problems with only PoW. Proof of work is difficult to scale, can lead to high transaction fees, & is generally viewed as an inefficient way to process transactions.

The case of Ethereum… The above problems are the reasons that Ethereum is looking to abandon PoW in favor of PoS. Proof of stake is known to use significantly less energy, and also makes it easier for anyone to become a validator & share in the block rewards.

But the proof of stake is known to have its own set of challenges. For example, one potential problem is that large stakeholders can have too much influence on the network.

While you could argue that large PoW miners can lead to the same result, the difference is that miners are ultimately beholden to holders who give coins value. In PoS, the miners & holders are essentially the same, & the system lacks the same kind of checks & balances.

Also, with PoW mining the significant hardware & electricity costs previously mentioned meaning that miners aren’t able to just sit on their holdings indefinitely.

PoS consensus mechanisms also face other challenges. One is that they are inherently self-referential. While you can measure the total accumulated PoW that’s been performed on a given chain to determine which one is valid, you can’t do the same with proof of stake.

Whereas the PoW can’t be faked (due to the high cost of generating valid hashes), with proof of stake it’s easy for anyone to create a fake chain and say it’s the valid one. Moreover, PoS simply hasn’t been as battle-tested as PoW, which has been around much longer.

The point is, both PoW & PoS have their fair share of pros & cons. But what would happen if you were to leverage both #consensus mechanisms to take advantage of what they are good at while also compensating for each of their weaknesses?

That’s exactly what the eCashOfficial network is trying to achieve by layering Avalanche on top of PoW. Avalanche will enable more efficient transaction processing & make it so users no longer have to wait for slow block confirmations to achieve transaction finality.

By using both consensus mechanisms, eCash will also drastically reduce the total amount of energy the network consumes. This is because a portion of the mining rewards will be allocated to staking nodes that burn much less electricity.

Surprisingly, this approach will lead to a higher level of security rather than the opposite because any attackers would now need both the necessary hash power as well as the necessary stake to take control of the network.

Simply put, Avalanche will make eCash transactions both faster & more secure. Because the eCash network will still run on PoW, the challenges that normal proof of stake chains face are made irrelevant. You get the benefits of PoS with none of the drawbacks.

eCash is about using elegant solutions to solve real problems to move the technology forward. The engineers at Bitcoin_ABC are taking what Satoshi Nakamoto introduced to the world and making it better.