On September 1, Vitalik Buterin interviewed Noah Smith, the economics author and the founder of Ethereum, who said something terrible about Bitcoin and the long-term security of the network. Buterin also spoke about the collapse of the crypto-economy, saying he was “surprised the crash didn’t happen earlier.”
Buterin: Bitcoin ‘failed to achieve payment level required to secure what could become multi-trillion-dollar system’
Vitalik Buterin, the founder of Ethereum, recently interviewed the author of Economics Noah Smith And Buterin had a lot to say about the current state of crypto. Smith first asked him his thoughts on the recent crypto crash and he said he thought Buttery would crash soon.
“I’m surprised the accident didn’t happen sooner,” Buterin said during the interview. “Normally, crypto bubbles last about 6-9 months after the previous high, and then a rapid fall follows. This time, the bull market lasted for almost a year and a half,” added the developer.
Buterin talked a lot about the Bitcoin (BTC) network and Ethereum’s much-anticipated transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS). As for the revenue from block grants, Bitcoin is not taking a cut, he said.
“In the long term, Bitcoin’s security is going to come entirely from payments, and Bitcoin has not been successful in getting the amount of payments needed to secure what could be a multi-trillion-dollar system,” Buterin said.
When Smith asked Buterin about the use of Bitcoin Energy, the Ethereum founder pointed out that PoS not only reduces environmental damage, but also secures the blockchain.
“A consensus system that unnecessarily charges large amounts of electricity is not only bad for the environment, but also requires hundreds of thousands of BTC or ETH to be spent every year,” Buterin emphasized. “Eventually, of course, the issue will be close to zero, at which point this will cease to be an issue, but Bitcoin will begin to deal with another issue: how to ensure that it remains secure.” Buterin added:
And these security incentives are the most important driver behind Ethereum’s move to proof-of-stake.
Ethereum founder insists early proof-of-work era ‘isn’t going to continue and won’t come back’
Buterin understands that Bitcoin will not change its consensus mechanism, at least for the time being, but believes that if the chain is attacked, the discussion of hybrid PoS algorithms could come into play.
“Obviously, if Bitcoin is really attacked, I expect that the political will to at least convert to hybrid proof will be seen quickly, but I expect that to be a painful transition,” the software developer told Smith. Ethereum’s founder says he thinks people have the wrong idea about PoS being the biggest stakeholder in the network.
“There are people who try to say that PoS allows large stakeholders to control the protocol, but I think those arguments are completely wrong,” Buterin said. “PoW and PoS rest on the misconception that they are governance mechanisms, when in fact they are consensus mechanisms. All they do is help the network agree on the right chain.”
Buterin goes on to say that he thinks Poe’s first edition is a good starting point, but now that he’s out the door, he believes it’s antiquated and won’t come back.
The early proof-of-work era of high democratization was a beautiful thing, and helped make cryptocurrency ownership more egalitarian, but it’s unsustainable and won’t come back.
About Crypto Crash, Bitcoin Network and PoW vs. What do you think of PoS’ comments about Vitalik Buterin? Let us know what you think about this in the comments section below.
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