Vitalik Buterin, co-founder of Ethereum, spoke on the sidelines about the creation of The Merge, an event designed to propel the cryptocurrency Ethereum to new areas of interest.
During his interview with Noah Smith, the creator of the second cryptocurrency in terms of value spoke on several topics related to the latest news related to the world of cryptocurrencies.
He also took the opportunity to specify that he was “concerned” about the future of Bitcoin, shedding light on the details of the next long-awaited Ethereum update.
Bitcoin: a crypto-currency with an uncertain future according to Vitalik Buterin
On September 2, 2022, the co-creator of Ethereum gave an interview to the economic writer Noah Smith. While it is true that several topics were discussed during this interview, Vitalik Buterin’s opinion on Bitcoin is definitely the one that attracted the most attention.
My interview with Vitalik Buterin is out! https://t.co/bXRzI0DASf
— Noah Smith 🐇🇺🇦 (@Noahpinion) September 2, 2022
During the interview, the latter said he was worried about Bitcoin. He then continued his analysis by citing two main reasons which justifies his state of mind. According to him, if the method of operation Bitcoin holds up well today, it is very likely that the cryptocurrency will face problems in the long term.
In fact, the operation today is like this: miners work to solve some mathematical equations that serve to secure the network and are rewarded for this by receiving BTC tokens. But, this system is at fault, because the Bitcoin protocol has a strict supply limit of 21 million tokens.
Therefore, it is almost certain that once that ceiling is reached (not before 2140 according to estimates), the network will only count. on transaction fees to ensure the security of their blockchain.
For Buterin, such a flaw is the same a serious and important problem, because the transaction fees incurred on Bitcoin are certainly not enough to secure a system whose value exceeds several trillion dollars.
He is not the only one who mentioned it, since the amount of fees generated by Bitcoin has always been compared to other crypto-currency platforms. a point of contention in the industry.
According to an analysis by Crypto Fees, Bitcoin generated an average of about $225,000 in transaction fees over the past week. A figure that puts it behind the main series of DeFi exchange platforms such as Aave and Uniswap and further behind the protocol created by Buterin himself. Analytics Revealed That Ethereum Has Cashed In approximately $2.7 million transaction fees over the same period.
Disadvantages of the Proof of Work system
If this is a serious problem for Buterin, according to him it is not the only negative point. In fact, he said during the same interview that his concerns apply as well the Proof of Work system accepted by Bitcoin since its inception.
According to him, this system provides much less security per dollar spent on transaction fees than the Proof of Stake system. Therefore, a network worth about $5 trillion cannot have an attack power of $5 billion. However, he also knows that he would very difficult for Bitcoin to abandon its Proof of Work system, describing such a move as “politically unfeasible”.
His words are sure to spark widespread outrage in some sectors of the cryptocurrency industry. As soon as the transition of the Ethereum network to a more ecological Proof of Stake system was announced, some activists and environmentalists had already begun to demonstrate that Bitcoin could makes the same move.
In contrast, Bitcoin advocates are quick to reject these claims, arguing that the Proof of Work system still a basic feature of the design of the Bitcoin blockchain network.
The benefits of the Proof of Bet system according to Buterin
The debate about which system is better today between Proof of Work or Proof of Stake did not start when The Merge was announced. This is a question that had already existed for several years, ie. but which has gained momentum in recent months, as Ethereum prepares for its migration to the Proof-of-Stake method.
This merger project is supposed to be underway around 15 September and will allow the Ethereum ecosystem to stop relying on miners to secure its network. One of the main arguments of Ethereum’s detractors is that the Proof of Stake method significantly limits the decentralization of the blockchain network.
According to Buterin, most people doing this review believe that the Proof of Work and Proof of Stake methods governance mechanisms. Unfounded statements as these two systems are actually consensus mechanisms. So, while it is true that the validators in charge of securing the network can validate transactions, they cannot influence its future design in any way.
The Merger is fast approaching, here everything you need on this topic if you haven’t followed the news of the past weeks!