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Bitcoin advocate claims Vitalik Buterin does not understand PoW

  • August 18, 2022
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  • Category: BitCoin, Blockchain, Cryptocurrency, Investments
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Swan Bitcoin founder Brandon Quittem said that Ethereum (ETH) co-founder Vitalik Buterin does not “deeply” understand the Proof-of-Work (PoW) consensus mechanism.

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.”

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.”

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.

However, Quittem counters this view saying home Bitcoin miners can get an S9 mining machine for as low as $200 while staking on Ethereum costs 32 ETH (roughly $60,000).

Additionally, he questioned Vitalik’s argument about ASIC manufacturers being a monopoly and the cost of mining equipment. In his view, the risk keeps reducing since ASIC mining equipment is becoming more commoditized, and manufacturer monopoly is reducing.

 

Buterin says PoW mining breaks down under restrictive government

Buterin claimed that PoW breaks down more quickly under more restrictive government conditions while staking is easier to hide.

But Quittem does not see it that way, highlighting a tweet from Kendall Weihe that says PoW can only be co-opted through government force while PoS is vulnerable to government funds.

Quittem continued that an attack on PoW would require global coordination, which makes it expensive, and can fail easily. On the other hand, “Eth stake is walking into the financialization trap just like gold. Cheap attack, hard to stop.”

Quittem also disagreed with Vitalik claim that PoS and PoW have the same separation of powers. Instead, he believed that in PoS, economic power equals political power but PoW separates the two.

Quittem says PoW is the innovation

Quittem discredited several other claims by the Ethereum co-founder and called PoW the innovation rather than PoS.

According to him, ETH switching to PoS is quite risky but is already too late now, and PoS will likely give the state control of blockchain space.

The post Bitcoin advocate claims Vitalik Buterin does not understand PoW appeared first on CryptoSlate.

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