Which Crypto is Going to Win?

My friend Michael Kogan wrote a piece called Proof of Stake vs Proof of Work.

It’s worth reading because virtually all the popular blockchains today are “proof of work”. That allows the chains to become trust networks among other things. Proof of stake is different.

One of the critiques of cryptocurrency from Finance professors is there is no claim on any future cash flows embedded in the currency. A US Dollar has a “claim” on the future cash flow of the United States via the US Treasury Market. The only thing backing up the crypto market is expectation and trust.

Proof of stake allows a crypto to have a base value in the future of a blockchain. I think it’s important to note that not all proof of stake coins would be successful because not all blockchains are going to be successful. However, the ones that are should have value that sustains.

A while ago I hypothesized that firms like CME and ICE should do ICOs. If they did it with a proof of stake blockchain it would be a good fit for their business models.  If you read Michael’s piece, you will understand the cat photo.

  • Bitcoin works today partly because of the “mining”, with firms getting more bitcoin by doing computational work to keep bitcoin consistent. What happens when the amount of bitcoin received for mining is less than the cost of electricity (& cooling? even in Iceland…) used to do the mining? What happens when the last bitcoin is “mined”? I’m not following this, so maybe there’s an easy and known answer.