Proof-of-stake (PoS) is a Centralized Nightmare
PoS is just Fiat all over again. Posting to Twitter, Pavol Rusnank, co-founder of Satoshi Labs, the manufacturer of the Trezor hardware wallet, declared that “proof-of-stake is how fiat works.” As he explained, the actors with dominant stakes determine how the system functions, with responsibility for controlling how transactions are verified and how much new money is created.
Jack Dorsey (CEO Twitter) claimed even though PoS comparatively uses less energy it is highly centralized and offers less security when compared to PoW. While many claim that PoW doesn’t have any visible output, they often forget Bitcoin network’s security comes from miners looking to find the next block.
With the resent “London Hard Fork”, Ethereum is one step closer to becoming a PoS ecosystem. You can do staking as well, all you need is 32 ETH ($96,000). Do you see the madness ? The Ethereum Network is no longer reachable for the average Joe. You need to be an early adopter or an institution to participate. “ohh, but you can join a Stake Pool” they say. But who is in charge of the voting if one big pool holds millions of Eth?
“But you get DeFi”, they say. Who want’s to put their money in a Alpha version of a blockchain “banking system” vs a traditional Bank? And these DeFi operators will get their hands on millions of ETH’s in a voting process.
As we all know, ETH is not “money”. It’s a Network Token and every developer agrees. So I’m not trash talking the Centralized Ethereum 2.0 Network. They have always been open on their cause. But people should be aware of what they are dealing with.
And there is another aspect to this as well. A lot of people currently hold 32 ETH on a home computer, doing staking. I’m sure, some of them have had issues and lost their 32 ETH’s and some had Hardware issues and was punished by the network, and some doesn’t dare adding security patches to their computers. And most of them can’t wait to dump their 32 ETH’s when they are allowed to sell..
Centralized vs Decentralized
DeFi could become a mess. And a decentralized computing network has no real life usecases in it’s current form. I would rather go for Cloud Computing, than a Centralized BlockChain. Why do we actually need Smart Contracts or Blockchain for that matter? It’s as cool as flying cars or a house on Mars.
Ethereum vs Bitcoin
Even Bitcoin isn’t sound money, but more so than ETH. ETH is a Network Token used on the Ethereum Network. It is petrol. You need petrol in your car to drive. Ethereum has become the new ExxonMobil or BP.