Swan Bitcoin founder Brandon Quittem said that Ethereum (ETH) co-founder Vitalik Buterin does not “deeply” understand the Proof-of-Work (PoW) consensus mechanism.
1/ I said “Vitalik never understood PoW deeply”
I don’t know if I’m right or wrong, but here are some examples of @VitalikButerin misunderstanding PoW
— Brandon Quittem (@Bquittem) August 15, 2022
In an August 15 Twitter thread, Quittem cited instances he believes prove Buterin’s lack of understanding of the mechanism.
Centralization and censorship risks
The first Buterin assertion questioned by Quittem is about exchanges staking their customers’ deposits and the belief that “PoW can get captured by big mining.”
3/ V gets a lot wrong with this one…
A) V doesn’t think exchanges will stake customer deposits. (lol how could he possibly miss this?)
B) “PoW can get captured by big mining cos”
Cheap energy is geo-distributed, often in small packages. Favors a fat tail of smaller miners. pic.twitter.com/bC9GKUoL9y
— Brandon Quittem (@Bquittem) August 15, 2022
Quittem pointed out that 11 regulated providers already control 67% of Ethereum staking, showing that it is at the risk of centralization and government sanctions.
Quittem continued that Buterin’s logic that exchanges will not stake their customers’ holdings without their consent is wrong.
The Bitcoin (BTC) advocate said the risks highlighted by Buterin are a “major reason to outsource staking. Incentivizes exchanges/providers to gobble up supply.”
10/ “lots of PoS chains have been working successfully” –@VitalikButerin
I guess if you don’t care about censorship resistance… then sure go ahead with PoS.
Otherwise, go look at BSC, Solona, Tron, Stream, and Peercoin. I assume Ethereans don’t want to go that direction? pic.twitter.com/dKNaYsiEqp
— Brandon Quittem (@Bquittem) August 15, 2022
According to Quittem, Ethereum is at the risk of “censorship,” citing other blockchain networks like Solana (SOL), Tron (TRX), and Binance Smart Chain (BSC).
The crypto community has identified this censorship risk in light of the recent US sanction on Tornado Cash.
Meanwhile, Coinbase has said it would rather shut down its staking services than comply with regulators’ requests to censor transactions.
Barrier of entry
Buterin had previously argued that the barrier of entry is lower for proof-of-stake (PoS) than PoW. According to Buterin, 32 ETH costs much less than building an ASIC mining firm.
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