The following is a guest post and opinion from Carter Feldman, CEO & Founder of Psy Protocol.
Let’s be honest about one thing that happened: the crypto space experienced a collective moral panic about energy consumption. Environmental activists, politicians, and even industry insiders weaponized PoW’s energy requirements against the technology itself.
Some of these concerns were valid at the time. The blockchain industry, eager for mainstream acceptance and wary of regulatory backlash, embraced PoS as the solution to its image problem. Ethereum’s shift to PoS was celebrated as crypto “growing up” and becoming environmentally responsible.
Security in PoW systems is tied to something external and measurable – computational power and electricity. This creates a tangible economic barrier against attacks. In addition, PoW is a bulwark against censorship since anyone can mine a Bitcoin block. PoS, however, secures networks through self-referential mechanisms. The system is secured by the very tokens it produces. In a simple analysis, this might seem OK, but it naturally evolves into ever more complex incentives like liquid staking/re-staking that introduce exponentially growing complexity and potential for abuse. In short, this circularity is the equivalent of taking a currency off the gold standard – it works until it doesn’t.
There is an uncomfortable truth that few have the courage to say openly: Proof of Stake created a new oligarchy in the very space that was meant to democratize and decentralize finance. In PoS networks, those with the most tokens have the most influence. Some believed that this would incentivize the rich and powerful to look out for everyone. As most of us are aware, the truth is that the shift to PoS instead resulted in the rich using their power to prey upon end users through techniques like front-running and other forms of MEV.
Over time, natural economic forces push toward the concentration of power. The largest stakeholders accumulate more rewards, further cementing their control – control that inevitably leads to exploitation of end users.
Everyone in the industry knows these problems exist. Yet publicly, we maintain the façade that everything is working as intended. This cognitive dissonance cannot continue if we’re serious about building truly decentralized systems.
For years, we’ve accepted the “blockchain trilemma” as immutable truth. This concept holds that blockchain systems must sacrifice one of three properties: decentralization, security, or scalability. Bitcoin prioritized security and decentralization at the expense of throughput. Ethereum’s shift to PoS aimed to process “several thousands of transactions per second” to compete with legacy payment systems, but this meant compromising on other dimensions.
The trade-off seemed unavoidable. While PoS eliminated the concentration around mining hardware, it introduced concentration around economic power. Those with more tokens gain more influence – a different form of centralization, but centralization nonetheless.
But what if the trilemma is no longer absolute?
Recent advances in the field of zero-knowledge proofs (ZKPs) have opened up an entirely new pathway – one that allows for horizontal scalability without fundamentally compromising security or decentralization. These powerful cryptographic innovations allow transactions, or indeed any computation, to be proven correct without requiring every node in the network to redundantly process them. Users can, in effect, prove the validity of their own transactions locally on their own devices, submitting only a tiny, easily verifiable mathematical proof to the network.
What’s more, nodes on the network could work together to aggregate all the transaction proofs into a single block proof that anyone could verify in real time on a smartwatch. With this kind of a network, there is no longer a need for a trusted group of nodes to validate each transaction. “Don’t trust. Verify.”
This approach transforms the fundamental economics of blockchains. When users prove their own transactions, the network no longer needs to charge high fees for scarce block space. Processing a million transactions doesn’t materially increase block time when using recursive proof aggregation.
Beyond energy debates, PoW delivers qualities PoS cannot match.
PoW enables true bootstrapping. Bitcoin began with zero value, yet miners committed real resources that created genuine digital scarcity. PoS networks face an impossible chicken-and-egg problem: they need valuable tokens before security exists.
Only PoW provides objective finality through irreversible work. Bitcoin’s history is secured by measurable effort, not votes. Each block represents energy that cannot be reclaimed.
Perhaps most critically for true decentralization, Psy’s approach makes 51% attacks mathematically impossible. By using zero-knowledge proofs to verify transactions, the integrity of the entire chain is guaranteed from genesis. Even if attackers somehow gained control of all mining power, they couldn’t rewrite history or create invalid blocks. This fundamental innovation maintains PoW’s external security model while eliminating its greatest vulnerability, further cementing the case for returning to our proof-of-work roots.
PoS made perfect sense in 2015, but clinging to PoS in 2025, when better alternatives exist, makes no sense.
The miners who secure PoW networks aren’t just energy consumers; they’re essential guardians against centralization. Their operations, scattered globally and bound by physics rather than token economics, create a genuine distribution of power.
The reasons that drove us toward PoS simply no longer apply. With zero-knowledge proofs enabling horizontal scalability, Proof of Work 2.0 now outperforms PoS across critical dimensions: energy efficiency is dramatically improved through local transaction verification, throughput limitations are solved through proof aggregation, and true decentralization is preserved rather than sacrificed.
We took a detour with Proof of Stake that created new oligarchies in the very space meant to democratize finance. The good news is we now have the technology to course-correct. Modern PoW blockchains deliver the performance needed for mainstream adoption while preserving the foundational values that matter. The motivation for transitioning to PoS is outdated. It’s time we acknowledge this.
