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One of the main points of crypto was to make mining it cost more and more energy to mine and verify transactions which would tie the currency price to energy availability something that is tangible similar to backing a currency with gold.
crypto as a whole is moving from proof-of-work (mining) to proof-of-stake (staking).
staking is drastically more efficient and does not require mining to process transactions. because of this efficiency, it is drastically quicker (some PoS blockchains finalize within 2.5 seconds).
eth 2.0 moving to PoS is a full concession that it's the future.
Counterpoint: Proof of work requires a miner to select one branch of a blockchain to dedicate his hardware to. So counterfeit branches will always be ignored by the majority of miners.
Proof of stake allows miners to back as many branches as they like, since they'll have a stake in all of them.
Also, the energy consumption of POW is massively overstated. I've seen articles saying crap like "each bitcoin transaction costs the equivalent of a month's electricity for an average household." Unless bitcoin miners are kind minded philanthropists making hundreds of thousands of dollars in losses per block, those kind of statements just don't make any sense.
pure proof of stake blockchains do not utilize miners or mining at all to process transactions. they use nodes, which do not function the same way at all.
examples would be cardano or algorand.
i do agree the energy use argument is wildly overstated and is a virtual non-issue for PoW, though. it's still just slow and shitty compared to PoS.
Who said this exactly?
That's not how boostrapping a currency works. Gold backed currencies are worth X gold because a central reserve is contractually obliged to trade them for that amount of gold. If I spend €20 worth of electricity mining crypto, it's not like I can trade my crypto back for electricity.
The only reason to impose proof of work on miners is to force them to devote scarce resources to recognise a single version of the currency's history. If there were no such proof of work they could gamble and recognise multiple fraudulant histories.
You would still be forced to value the crypto at at least what you spent mining the crypto just like a gold mine has some specific difficulty(proof of work) to extract gold out of the ground.
That's a different concept to backing though. Gold backing means that the currency can always be traded for gold, which places a lower limit on it's value (at least in terms of gold).
Most crypto has no such backing so the lower limit for it's value is zero.
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