While several critics are talking down the up-and-coming Merge upgrade, Ethereum co-founder, Vitalik Buterin continues to defend the transition of the Ethereum blockchain to proof-of-stake (PoS). According to him, it is a development that will make the widely used blockchain 55% complete and less energy intensive.
In a few days, Ethereum (ETH), which is the second largest crypto project by market capitalization, will no longer be associated with the proof-of-work (PoW) consensus algorithm mechanism. Courtesy of the merge upgrade set to happen around mid-September, Ethereum will adopt the proof-of-stake (PoS) concept.
In light of this, several arguments have been put forward by PoW advocates, crypto miners, and Bitcoin (BTC) maximalists, in particular. In a recent scenario, Vitalik Buterin, one of the founders of the largest smart contract platform said in defense of PoS that PoW punishes cryptocurrency miners with insignificant hash power.
“Proof-of-work (PoW) penalizes anyone who has a smaller percentage of hash power than their percentage of the coin supply. Actually, it penalizes much more than that because profit < revenue,” Vitalik Buterin responded to a PoS critic, Udi Wertheimer.
And PoW penalizes anyone who has a smaller percentage of hashpower than their percentage of the coin supply ☺️
(Actually, it penalizes much more than that because profit < revenue, but you get the point)
— vitalik.eth (@VitalikButerin) September 12, 2022
Read Also: Google Shows Support for Upcoming Ethereum (ETH) Merge
It is worth noting that Udi Wertheimer is a popular Bitcoin maximalist and ex-Blockchain research head at Colu. In a Twitter post, he shared some unpopular viewpoints about proof-of-stake as he aimed to portray the flaws of the consensus algorithm mechanism. Ultimately, he argued that staking rewards are not real yields.
In his words, “PoS rewards aren’t “yield”, in fact, they’re not even rewards, they are just penalty to people who don’t stake. You don’t get paid for staking, you just get penalized for not staking.”
“Miners and holders are usually distinct sets with very little overlap, so in practice, it’s just holders paying miners. With liquid staking, you can expect holders and stakers to have a huge overlap. So basically just everyone’s balances increase equally.”
He added, “All else being equal, it’s [PoS rewards] better for holders but it’s not yield! It’s just less penalties (also, not all else is equal).
PoS rewards aren’t “yield”, in fact they’re not even rewards, they’re just penalty to people who don’t stake
you don’t get paid for staking you morons
you just get penalized for not staking
i can’t believe you still don’t get it lmao
— Udi Wertheimer (@udiWertheimer) September 12, 2022
Although Ethereum was created as a proof-of-work (PoS) blockchain, Buterin has always been an advocate of proof-of-stake (PoS), which justifies the approaching Merge upgrade and his soon-to-be-released book titled Proof-of-Stake.
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