If everything goes well - which is something rather scarce in the crypto world, but had happened before - tomorrow we will see an upgrade on the Ethereum blockchain, one that will enable the transition to a new governance model, namely staking.
For those of you in the HIVE world, this concept is not new, all participants in the protocol are using staking one way or another. But in the Ethereum world, this is something completely new. I also believe this will be a game changer, in the sense that it will shift governance in the entire crypto world from proof of work, to proof of stake.
And yes, that means Bitcoin too.
You see, we are slowly inching towards a place where there will be enough crypto mined so the actual creation process will not carry that much weight anymore. Until now, the mere process of generating some rewards, in the form of a crypto token, was important to secure the blockchain. The reward had to match the contributed resources. That's how crypto came into creation: those interested in supporting the chain(s) have contributed resources. The most affordable resource was computing power. Hence, we saw the golden age of miners (which I think it's slowly, but inevitably, sunsetting now).
Now, that we have already a significant amount of tokens floating around, and as computing power becomes way more expensive, the next thing that will glue the system together is trust. You will supervise transactions (and make sure your transactions are well supervised) by vouching with your pre-existing value (in the tokens already generated). By blocking (staking) some tokens, you will signal trust in a specific chain. In time, staking could be used as a trust operation for more atomic processes, but let's not rush, for now it will be used only to secure the chain.
I can clearly see a path in which the Bitcoin already mined will be used to secure the blockchain in a future proof of stake dialect, in a not so distant future. If the chain - and I mean Bitcoin - will stop minting tokens at 21 million, the actual functionality of the said chain must be supported by the staking of pre-existing Bitcoin.
I'm really looking forward to see how this Ethereum upgrade will go and how staking, as a process, will shift the world of crypto.
There is an ongoing funding proposal for two of my Hive-related projects, which will allow me to support some of the costs involved. If you want to support this proposal, all you have to do is to vote it using any of the two links below:
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I'm a geek, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Hive you may stay updated by following me @dragosroua.
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