Global Regulator BIS: Bitcoin Should Depart from PoW or Die
A group of researchers from the Bank for International Settlements conducted a study of cryptocurrencies with Proof of Work consensus algorithm. According to them, Bitcoin should switch from PoW, or in the future, the cryptocurrency will become useless.
According to the study, in the future, the bitcoin mining reward will drop to zero, due to the inflation principle that was laid down by Satoshi Nakamoto in 2008. Accordingly, miners who support the work of the system will completely lose their earnings. Income from transactional fees will not be enough to cover the cost of BTC mining.
This situation will lead to the fact that Bitcoin will become useless because the confirmation of payment in the system will last for a month.
Of course, innovative technologies like the Lightning Network can help remedy the situation, the researchers said. But at the fundamental level, BTC has only one way - to abandon the Proof of Work consensus algorithm. None the less, moving to another consensus will require coordinated action within the community or institutionalization of crypto.
The Bank for International Settlements is an international financial institution, called the “bank of central banks”. In total, among its members, there are 60 regulators from various countries.