Regulation
Reading time: ~2 m
The International Monetary Fund (IMF) has highlighted some of the challenges associated with the PoS consensus algorithm. The Office seeks to make a constructive contribution to the development of a regulatory framework that could limit the global risks of digital assets.
Proof-of-Stake is an alternative to the Proof-of-Work consensus algorithm that is used in the Bitcoin ecosystem and until recently worked on the Ethereum network. Instead of allocating hardware resources to secure the ecosystem, as is the case with PoW, PoS validators use a native coin to validate transactions on the blockchain.
The IMF reporting highlighted how Proof-of-Stake can create an excessive concentration of decision-making power in the system, which greatly increases the risks to market integrity, despite the fact that this algorithm is more environmentally friendly and energy efficient than Proof-of-Work.
Experts emphasize that PoW mining requires significant energy costs, which may hinder the implementation of the global vision for the transition to a green economy.
The documentation also stated: the regulator must be impartial and adhere to a neutral approach.
Earlier, the editors of Crypto.ru informed: many window metrics indicate that the hash rate in the BTC ecosystem has updated the global extreme. This trend is due to the activity of miners, as a result of which the complexity of mining is systematically increasing. The Bitcoin hash rate has reached a record high of 226 EH/s. This indicator began to grow steadily this summer, when the flagship of the crypto market began to strengthen its exchange positions. Analysts point out that this is an atypical situation, since the hash rate of the network has always been directly correlated with the movement of the price of bitcoin.
#IMF #warned #risks #ProofofStake #algorithm
