Bitcoin and proof-of-stake exhibit inherent compatibility, according to Bitcoin Builders 2023.

Less than a year after proof-of-stake (PoS) was adopted as the consensus mechanism for the Ethereum blockchain — the largest blockchain network in the industry — researchers have discovered that PoS can enhance Bitcoin.

David Tsè, a professor at Stanford University, discussed his team’s insights regarding Bitcoin, PoS, security, and energy consumption with Cointelegraph during the 2023 Bitcoin Builders conference held in Miami, Florida.

Cointelegraph reporter Joe Hall and Stanford University professor David Tsè at Bitcoin Builders 2023. Source: Cointelegraph

Tsè leads a research lab at Stanford University in California that focuses on blockchain consensus protocols. He mentioned that the initial consensus protocol examined was Bitcoin’s proof-of-work (PoW) protocol.

“Bitcoin was like our first love,” he remarked. Through this “deep understanding” of Bitcoin and subsequently learning about PoS protocols, he noted that his team identified a “very natural synergy” between the two.

“By constructing an additional layer of protocol that shares the security between Bitcoin and PoS, we find that it will become very strong, providing a robust security property.”

Tsè emphasized that the PoS blockchain has two significant drawbacks on its own: Its reliance on proof of “stake,” or capital, makes it challenging to initiate a new blockchain due to the necessity of attracting stakers. He stated, “If you don’t have capital, you don’t have enough security.”

Alongside the connection between security and capital, the Stanford professor also pointed out that security is what he describes as “short range” on PoS, while Bitcoin offers stronger “long-range” security, making them “the perfect complement to each other.”

He envisions a scenario where individuals can develop distributed ledger applications more easily:

“Security is very important, but instead of everyone trying to fragment and compete for limited capital, take capital from a vast reservoir which is Bitcoin, and utilize it as economic security for all these chains.”

In this approach, Tsè imagines developers concentrating on application development, which is the primary objective of establishing a blockchain network, rather than on gathering the stake to secure the chain.

Related: Bitcoin self-custody advocate explains why on-ramps are key to adoption

A significant criticism of building on Bitcoin — and PoW systems in general — has been the energy consumption linked to such protocols. Tsè noted that Bitcoin’s negative reputation regarding energy use complicates explanations to the next generation of students.

However, Tsè believes it is crucial to not only consider the energy being consumed but also the “why” behind that consumption.

“Without energy, there is no security. Without security, there’s no value. In some sense, what we’re doing right now, from a technology point of view, is to make higher value use of that energy.”

He underscored security as one of Bitcoin’s most significant assets and referenced new initiatives like Bitcoin Ordinals that leverage that security.

“What makes Ordinals interesting on Bitcoin, as opposed to any other platform, is that they’re building on the most secure blockchain in the world.”

Recently, Bitcoin nonfungible tokens (NFTs) have gained traction in the crypto space, generating both excitement and skepticism regarding their impact on Bitcoin. Some industry thought leaders believe they will eventually diminish, while others note that Binance’s NFT marketplace introduced Bitcoin NFT offerings on May 9.

On the same day, inscriptions for Bitcoin Ordinals nearly doubled in just over a week, approaching the 4.8 million mark.

Magazine: Ordinals turned Bitcoin into a worse version of Ethereum: Can we fix it?