Ethereum
Vitalik Buterin delivers a sobering verdict on Ethereum proof of work
Gamza Khanzadaev
Vitalik Buterin’s stance on Ethereum’s transition to proof-of-stake concludes the debate, but leaves a crucial question unanswered: was it the right decision?
Read U.TODAY on
Google News
Amid rumors within the Ethereum community longing for the days of Proof of Work (PoW), Ethereum co-founder Vitalik Buterin definitively put an end to the debate, asserting that PoW was not immune to centralization. With Ethereum’s transition to proof-of-stake (PoS), Buterin says the temporary nature of PoW has allowed centralization to go largely unaddressed.
Buterin supported his position by revealing a harsh reality: under PoW, a mere handful of mining pools exercised disproportionate control over the Ethereum network. A visual representation showed that 76% of ETH Mining power was concentrated among just five large pools, with Spark Pool and Ethermine becoming the industry’s dominant dominators, collectively controlling more than half of the altcoin’s production.
The resurgence of debates around Ethereum’s move to staking, fueled in part by ongoing legal battles, notably with the SEC, was met with Buterin’s unwavering defense. SEC allegations linking Ethereum’s consensus mechanism to security issues have led to delays in the highly anticipated launch of Ethereum ETFcasting a shadow over the cryptocurrency regulatory landscape.
On the contrary, the contrasting fate of cryptocurrencies operating on PoW, such as Bitcoin, which managed to overcome regulatory hurdles to obtain ETF approval, alongside the inclusion of derivatives Dogecoin, Litecoin and Bitcoin Cash on the main American crypto platform Coinbase, also adds fuel to the debate.
As Ethereum continues its journey with a PoS consensus, Buterin’s resolute stance constitutes a definitive answer to those nostalgic for the era of mining domination. Yet in the midst of this transition, a lingering question remains: Was the move from mining to staking really a decision for the better?
About the Author
Gamza Khanzadaev
Financial analyst, trader and crypto enthusiast.
Gamza graduated with a degree in finance and credit with a specialization in securities and financial derivatives. He then also completed a master’s program in banking and asset management.
He wants to participate in covering economic and financial technology topics, as well as making more people aware of cryptocurrencies and blockchain.