In an interview before the Ethereum network finally migrates to the Proof-of-Stake (PoS) consensus mechanism, the co-creator of that protocol, Vitalik Buterin, criticized the Proof-of-Work (PoW) mechanism, he claimed to be “concerned” about the safety of Bitcoin in that regard.
THE COMPUTER SCIENTIST EXPLAINED THE “TWO REASONS” WHY HE IS WORRIED ABOUT BITCOIN’S FUTURE…
First is a long-term concern for the network’s security, referring to the situation that Bitcoin mining will experience when a new BTC is no longer issued, approximately in the year 2140. Vitalik said that “it will come entirely from transaction fees.” “And Bitcoin is simply failing to earn the level of fee revenue required to secure what could be a multi-billion dollar system,” he noted.
For that year, miners’ earnings are expected to depend only on commissions. Thankfully, there’s more than a century left before that.
His second issue revolves around the Proof-of-Work (PoW) mechanism used to verify transactions; he insists that it is less than what Proof-of-stake(PoS) can offer if measured per dollar spent in transaction fees.
However, he clarified that he’s aware there’s no sign this will ever happen: “the migration of Bitcoin out of Proof of Work appears to be politically unfeasible,” referring to those in the Bitcoin developer community who raised the possibility of Bitcoin one day changing from PoW to PoS were met with overwhelming resistance.
One of the main reasons the Bitcoin community is against changing to PoS is that they believe PoS-based tokens give too much power to large stakeholders…
Buterin addresses this, saying, “They are based on the misconception that PoW and PoS are governance mechanisms, when in fact they are consensus mechanisms. All they do is help the network agree on the correct chain. A block that violates the protocol rules (if it tries to print more coins than the protocol rules allow, for example) will not be accepted by the network, no matter how many miners or participants support it.”
Ironically, he’s sharing these opinions while Ethereum is on the verge of switching from PoW to PoS…
Perhaps this is a subtle way to address some concerns about Ethereum’s upcoming change – he’s addressing them as a hypothetical Bitcoin migration to PoS.
“The funny thing is that bitcoiners (who tend to be the most pro-PoW) should understand this well, as the Bitcoin civil wars in 2017 very well demonstrated that miners are quite powerless in the governance process,” he suggested. “In PoS, it’s exactly the same: the participants don’t choose the rules; they just execute them and help order the transactions.”
However, Ethereum Developers faced virtually no resistance from the community when proposing the change to PoS, except for miners whose concerns were based on their profits, not the overall well-being of the network.
Ethereum will move from PoW to PoS later this month, maybe. There have been too many delays to count, and I’ve learned Ethereum 2.0 is an “I’ll believe it when I see it’ thing now.