If you implement proof of stake, for example (where the scarce resource becomes the currency of the network itself, which is a lot trickier to implement and especially quite hard to bootstrap from nothing because in the early days of a currency there's going to be only a few people owning it), then there's no need for the reward process to be a lottery (though it still can be).
The proof of stake proposals don’t seem to work that way. They seem to be more a matter of stakeholders having machines that vote about who is trustworthy.
You need something to be the limiting factor on the amount that you can try to win such a lottery. With proof of work, it's electricity. (assuming everyone is about as efficient as each other) Early on, they talked about it being proportional to cpu-time. That has become more abstract since.
I haven't heard of any cryptos that require you to risk your coins to mine. Sounds like a neat gimmick, but hard to implement.
There is already massive interest in finding more efficient ways to solve the problem. It's a difficult problem to solve (as Elon Musk will likely learn in the coming year).
The cost of proof of work is paid in two forms. The first is in the form of inflation. Merely holding onto Bitcoin means eating dilution as new Bitcoins are printed to fund the mining ecosystem. And the second cost is in terms of transaction fees. At times, it can cost $20+ to send a transaction over the Bitcoin network, and a more efficient / higher throughput system could significantly reduce these fees.
The users of Bitcoin are already themselves naturally incentivized to look for better solutions, even completely absent any care about the environment.
More enlightened self-interest would be to want to see the price go up without using more electricity, but this is secondary to the primary incentive.
To get action from enlightened self-interest, there needs to be leadership for making changes. (Ethereum seems to have this?)
Knowledge preceedes enlightenment. For example, Git is also green-friendly, and shares a virtually identical consensus model to pure PoS consensus designs. It’s just that “green-friendliness” wasn’t a design goal of cryptocurrency — creating a lasting store of value sans institutions, exchangeable pseudonymously over the internet, was.
As it were, pure PoS consensus suffers from the misfeature of not even having a quantitative fork ranking protocol — i.e. it lacks a way to objectively compare the truthfulness of divergent blockchains [1]. In PoW networks, cumulative hashing power can be simply and easily mathematically compared to produce cold, quantitative consensus. In PoS networks, there is no hashing power, and human intervention is required — just like Git.
Which begs the question, why do PoS networks even need a blockchain? I think we all know the reason for that, though — Git doesn’t have a hype train. Git just isn’t good enough at separating the general public from their hard-earned money.
Git was designed for cooperative work, and critically depends on trust (commit access).
Merkle trees are easy, scalable schemes of trustless consensus, less so :(
This would imply the users of Bitcoin use it for anything more than speculative investment.
The way I like to explain it is that Bitcoin is collectively giving away about $1.5 billion a month in prize money to miners. That's the root of the problem. Miners will spend up to $1.5 billion a month on electricity (mainly) and their other expenses. Currently it's about 10x Google's electricity usage.
Total revenue is proportional to the block reward (an algorithmic parameter) and Bitcoin price. So to fix this, either they could reduce the block reward ahead of schedule (won't happen) or something could happen to crash Bitcoin's price. More transaction volume would actually be better if it were due to a fire sale.
Taxing holdings of Bitcoin would be a way to convince people and businesses to sell and discourage buying, at least for those that pay their taxes.
Or who knows, maybe threatening to do this would result in enough consensus to accelerate the block reward halving schedule?