If the Merge works (and PoS chains remain secure), then it'll be proof in practice that PoW is unnecessarily wasteful, so regulators have extra incentive to scrutinize Bitcoin.
Small coins can use merge mining if they really want to, most don't because they have some far-fetched idea on how PoW should work (like "ASIC resistance" and other tarpits)
Even if no existing coins switch to PoS (spoiler: many will), the PoS coins will suck up fee-paying users from the PoW coins, reducing the returns on mining, which will result in lower network hashpower. It may also bring a second-order effect of reducing the prices of PoW coins, which will reduce dollar-denominated block rewards on those networks, and that will bring hashpower down even farther.
It literally codefies "the rich gets richer" deep into the protocol. While I'm pro-eth, this makes it a lot less "fair" in my opinion.
With PoW, miners can't really hold on to the coins for very long, so they have to dump it to cover electricity and hardware costs which always creates supply whereas with PoS, a staker can just hold on to the coins they get forever at no cost and their share of the pie keeps getting larger and larger forever.
To be clear, I'm not complaining, if eth decides to pay me 5-10% per year based on my holdings for a simple cryptographic signature, I'm not gonna say no, but it definitely creates a weird dynamic where new entrants will have to buy at the price the stakers decide to sell, which could be sky high since we have no pressure to sell.
There is a far more eco-friendly alternative to proof-of-work (PoW) called proof-of-stake (PoS).
I wonder if a serious discussion will finally begin on moving Bitcoin to PoS. This will certainly have a strong opposition and will likely lead to a fork, i.e. two cryptocurrencies will exist at the same time, call them BTC-PoW and BTC-PoS.
In any case these news are a leap forward in the crypto space. IMO, replacing PoW by PoS is a bit like replacing incandescent light bulbs with LEDs at home.
There is a deeper problem with PoS, which is about where the value of the staked token comes from in the first place. PoW ties this to the burning of real-world value, specifically electricity which is about as close to distilled economic value as you can get. Ethereum is trying to bootstrap value with PoW and then switch, but I have strong doubts that this is a sustainable solution.
PoS will be controlled by US-based custodians, which certainly have a tremendous incentive to siphon as much value from the currency as possible.
PoW has a much more diversified set of actors with competing interests, which makes it much more difficult to change the rules. This is a feature not a bug.
One thing that PoW has for it is this idea of "something outside the system". In essence the miners are somewhat economically forced to sell their mined coins in order to rent the energy/mining-rigs. Hence helping with re-distributing the wealth across the network - presumably in a very fair fashion since it's the free market (exchanges).
In PoS this re-sell doesn't happen. Once you are chosen to mine a block (because of your stake) you mine it and that's it. You're not incentivized to redistribute your coins. You can hoard them because you don't have to rent any resources from outside the system.
I hate PoW energy consumption as well and I think that its purpose - literally competing to consume more energy - is quite horrible. But so far I don't think PoS offers the same properties as PoW: a fairer system to redistribute coins.
"Wasting" energy is required to make PoW work, but if we could achieve the same with PoS (and that seems to be the case since ETH is switching too) then it would really be a waste.
I agree with you regarding POW but my understanding is that POS has nontrivial security issues. But, again, I agree there's this disconcerting disconnect between efforts toward crypto bandwagoning and efforts to implement something better.
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