On September 1, Vitalik Buterin conducted an interview with the economics author Noah Smith and the co-founder of Ethereum spoke an awful lot about Bitcoin and the network’s long-term security. Buterin also discussed the crypto economy’s crash and said he was “surprised that the crash did not happen earlier.”
Buterin: Bitcoin ‘has not succeeded in achieving the level of fee revenue needed to secure what could be a multi-trillion-dollar system’
Ethereum co-founder Vitalik Buterin recently had an interview with the author of Economics Noah Smith And Buterin had a lot to say about the current state of crypto. Smith first asked Buterin about his thoughts regarding the recent crypto crash and Buterin said that he thought it would crash soon.
“I was surprised that the crash did not happen earlier,” Buterin said during the interview. “Normally crypto bubbles last around 6-9 months after surpassing the previous top, after which the rapid drop comes pretty quickly. This time, the bull market lasted nearly one and a half years,” the developer added.
Buterin also talked about the bitcoin (BTC) network and The Merge, Ethereum’s much-anticipated transition from proof-of-work (PoW) to proof-of-stake (PoS). He claims that bitcoin is not making the cut when it comes to revenue fees from block subsidies.
“In the long term, Bitcoin security is going to come entirely from fees, and Bitcoin is just not succeeding at getting the level of fee revenue required to secure what could be a multi-trillion-dollar system,” Buterin said.
When Smith asked Buterin about bitcoin’s energy use, the Ethereum co-founder said that PoS will not only reduce damage to the environment, but is also about keeping the blockchain secure.
“A consensus system that needlessly costs huge amounts of electricity is not just bad for the environment, it also requires issuing hundreds of thousands of BTC or ETH every year,” Buterin stressed. “Eventually, of course, the issuance will decrease to near-zero, at which point that will stop being an issue, but then Bitcoin will start to deal with another issue: how to make sure that it stays secure.” Buterin added:
And these security motivations are also a very important driver behind Ethereum’s move to proof-of-stake.
Ethereum Co-Founder Insists Early Proof-of-Work Era Is ‘Unsustainable and It’s Not Coming Back’
Buterin understands that Bitcoin won’t change its consensus mechanism, at least for now, but if the chain was attacked, he believes the discussion of a hybrid PoS algorithm could come into play.
“Of course, if bitcoin is indeed under attack, I expect to see at least the political will to switch to hybrid proof-of-stake quickly, but I expect it to be a painful transition,” said software developer Smith. told. The Ethereum co-founder said that he thinks people have the wrong idea about PoS which gives control of the network to the largest stakeholders.
“There are also people who try to claim that PoS allows big stakeholders to control the protocol, but I think those arguments are just plain wrong,” Buterin said. “They rest on a misconception that PoW and PoS are governance mechanisms, when in reality they are consensus mechanisms. All they do is help the network agree on the right chain.”
Buterin continued to note that he thinks an early version of PoW was a good starting point, but nowadays he believes it is antiquated, running out the door, and likely won’t return.
The highly democratized early proof-of-work era was a beautiful thing, and it helped tremendously in making cryptocurrency ownership more egalitarian, but it’s unsustainable and it’s not coming back.
