Ethereum’s Vitalik Buterin “Worried” About Bitcoin’s Future for Two Reasons

Buterin also gave his thoughts on some of the criticisms made to Proof of Stake ahead of Ethereum’s upcoming “merge” event.

Fear of Bitcoin’s Future

Vitalik Buterin is concerned about Bitcoin’s future.

of September 2nd interview Economist Noah Smith, creator of Ethereum, said:Worried [about Bitcoin] For two reasons. ” He explained that he believes Bitcoin could face problems in the long run because of its fee model. distribution, but the protocol has a hard supply cap of 21 million, so ultimately the network will rely solely on transaction fees for security.We have not been successful in generating the level of toll revenue necessary to secure a multi-trillion dollar system. ” The amount of fees Bitcoin generates over other protocols has long been debated in the cryptocurrency community.according to Crypto fee Data shows that Bitcoin has averaged around $225,000 in fees over the past week, beating out DeFi mainstays such as Aave and Uniswap. The biggest source of revenue was his Buterin-created protocol, which earned about $2.7 million in the same timeframe.

Buterin said he is also afraid of Bitcoin. “Proof-of-Work has much less security per dollar spent on trading fees than Proof-of-Stake. ” They argue that having a $5 trillion network that costs only $5 billion to attack is problematic. Buterin also noted that switching Bitcoin from proof of work would be “politically unfeasible.”

Buterin’s comments may spark outrage in some parts of the cryptocurrency community. Bitcoin’s most ardent proponents have long argued that proof of work is a fundamental part of network design. Others have made similar statements to Buterin regarding the best cryptocurrency fee model, but since Bitcoin plans to issue coins until around 2140, the issue is usually overlooked by its proponents. increase.

Buterin defends Proof of Stake ahead of merger

Debate over whether blockchain should achieve consensus through Proof of Work or Proof of Stake is raging, especially as Ethereum prepares to “merge” into Proof of Stake. It has been furious over the last few months.the merge is Scheduled to be shipped around September 15thEthereum is then secured by validators who stake ETH tokens instead of miners.

While some of Ethereum’s most vocal critics have argued that Proof-of-Stake would limit decentralization and allow larger stakeholders to control the network, Buterin told Smith, He said he believes such arguments are “clearly wrong.” He said critics “make the mistake of thinking that Proof of Work and Proof of Stake are governance mechanisms when in fact they are consensus mechanisms.” This means that stakers can validate transactions but cannot influence the future design of the network.

Criticism of Proof of Stake intensified after the Treasury Department approved Tornado Cash last month, leading to debate that the government could one day try it. censored ethereumCoinbase CEO Brian Armstrong commented On the issue, his company said it would stop staking rather than censoring transactions.buterin too Weightedsaid it would view compliance with regulatory sanctions as an attack on its network.

Buterin also provided some rare insights into the crypto market over the past few years, commenting on the recent bull market that saw crypto’s global market cap surpass $3 trillion in November 2021. He admitted that he was “surprised that the crash hadn’t happened before.” I feel useful,” he said.

Disclosure: At the time of writing, the author of this work owned ETH, AAVE, and several other cryptocurrencies. They also had exposure to his UNI in cryptocurrency indices.