Ethereum co-founder Vitalik Buterin and Coinbase CEO Brian Armstrong believe that a gradual change in mindset and significant community contributions have supported them in supporting Ethereum’s upcoming transition from a Proof-of-Work (PoW) consensus to a Proof-of-Stake (PoS) consensus. .
The two industry titans joined Coinbase protocol expert Viktor Bunin on the Around the Block podcast for an insightful discussion focused on “The Merge,” set to happen in mid-September 2022.
Buterin reflected on his own journey in seeing proof-of-concept as a potential consensus mechanism for the Ethereum blockchain, which he initially doubted due to several unresolved issues that made it unviable.
According to the co-founder of Ethereum, one of the first blog posts of the project in 2014 proposed an algorithm called slasher, which introduced the concept of punishing a node for voting for contrary actions:
“My attempt was to break new ground in solving what critics call proof of the problem that it is not. As a proof of work if you want to build on two blocks you have to do the work twice, but as a proof of stake you can sign as much as you want. »
Buterin thought it would be a viable option to introduce an express penalty for signing contrary acts. Research continued throughout 2014 to explore the security assumptions Ethereum should rely on with PoS and whether it could be more secure than PoW by making a showdown that eats staked deposits rather than staked rewards.
Buterin then reflected on a concept introduced at the end of that year, called “weak subjectivity”. He explained that a node must be online regularly for a PoS network to benefit from the full security guarantee of the mechanism.
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This can be weekly, monthly or yearly, with longer periods becoming more troublesome for traders in terms of liquidity. Buterin believes it was this critical consideration that made him decide to switch to PoS:
“Ironically enough for me, it was the understanding that compromise was inevitable that calmed me down. He made me realize that was the weakness and at the same time I felt confident that it was there. »
Armstrong joined the conversation, admitting that he was concerned about PoS when he heard about it and that it took him several years to change his mind:
“When people started talking about a complete Turing language on blockchain, I thought to myself that it seemed so easy to attack, so I was just skeptical at first. »
Coinbase’s CEO began exploring the concept after explaining that his initial belief that bitcoin would serve as the main blockchain in the ecosystem had its limits. Due to the success of decentralized applications (DApps) running on Ethereum, Armstrong is more open-minded about the move to PoS:
“At Coinbase, we got used to the idea that we need to be open to all the chains and all the tokens that come out; we cannot stay in our ivory tower focusing on one asset. »
Buterin went on to describe his belief that PoS is stronger and more decentralized than PoW, with the possibility of setting up an Ethereum validator anywhere in the world. All one needs is a computer and an internet connection to do so.
They also discussed the US Treasury’s decision to approve Tornado Cash-related USD Coin (USDC) and Ether (ETH) addresses. They also pointed out that Coinbase would prefer to stop its throttling operation to preserve the integrity of the entire network in the hypothetical case that it has to censor transactions.