By
Chimamanda U. Martha
April 25th, 2024
Many believe the transition, once completed, will pit Ethereum favorably against Bitcoin, closing their gaps.
Ethereum co-founder Vitalik Buterin has taken to Twitter to educate critics of the network about the proposed Ethereum Proof-of-Stake transition.
Ethereum’s Proof-of-Stake Transition
The Merge will see Ethereum transition from a Proof-of-Work mechanism to a Proof-of-Stake mechanism. Earlier in July, Ethereum developers successfully deployed the second testnet, Sepolia.
With a final test net scheduled for deployment in the summer, the PoS upgrades will begin to roll out across Ethereum’s mainnet. The transition will lower transaction fees on the Ethereum network and improve its throughput and settlement times. It will also improve congestion on the Ethereum network.
Many believe the transition, once completed, will pit Ethereum favorably against Bitcoin, closing their gaps. However, Bitcoin lovers have taken to critiquing Ethereum’s Proof-of-Stake Transition. And Buterin is not having any of it.
Critiques and Criticisms
Managing Editor at Swan Bitcoin, Nick Payton argued that the fact that investors could vote on a transition proves that Ethereum is a security. Recall that the entire cryptocurrency industry has been embroiled in battles with the SEC as to whether digital assets qualify as securities.
He said:
“The fact that you can vote on something to change its properties is proof that it’s a security.”
Buterin noted this was a bare-faced lie that was often repeated and wondered why it usually goes unchallenged”. He noted that PoS doesn’t require voting on parameters, same as PoW. “Nodes reject invalid blocks, in [proof-of-stake] and in [proof-of-work]. It’s not hard,” added he.
Earlier in the month, Buterin also responded to Bitcoin maximalist Jimmy Song. Song had tweeted that proof of stake “does not provide decentralized consensus”. Vitalik also retorted, stating that Song based his argument on a technicality.
No Effect on Ethereum Prices
Despite the criticisms, there has been no direct impact on the Ethereum price. Instead, news about the successful deployment of Sepolia caused a rallying of Ether price. Ether (ETH) went up more than 19% compared to Bitcoin’s 8% in the same period. However, the prices have reset again. At the time of writing, the coin was trading at $1,058, according to CoinMarketCap.