Crypto twitter seems very very excited about the Ethereum proof of stake transition. (A triple-halvening! ETHBTC flippening! Earn free yield on your ETH!) Makes me leery.
@wintonARK I smell something fishy too, just doesn’t sit right with me, happy to sit it out and watch
@EmmetPeppers @wintonARK I certainly respect the “sit out and watch” decision, but in reading through this thread it seems clear to me that Brett really doesn’t understand the details of what is actually happening. If he did and came to the same conclusion, that’s fine, but I think he just doesn’t know.
@MatchasmMatt @EmmetPeppers ok, what do I misunderstand? Seems obvious to me that switching to proof of stake makes any transaction more censorable and likely to be censored. What is the counter-argument?
@wintonARK @EmmetPeppers Your thread seems to have two main points; 1) PoS is more centralized than PoW, which makes it less secure / more prone to censorship & regulation, and 2) TradFi (FWIW I hate that term) sees the threat and so it will be offering many of the benefits currently offered by DeFi.
@wintonARK @EmmetPeppers 1) I think is really two issues, resilience to 51% attacks and vulnerability to government regulation. While both security protocols are highly resilient, I’d argue that BTC PoW is more vulnerable than ETH PoS. Which would be easier / more economic for a state sponsored attack?
@wintonARK @EmmetPeppers To buy a huge number of mining rigs in fiat currency in order to get majority hash rate on the network, or to literally buy 51% of all ETH in existence? The latter would be incredibly difficult, especially considering a significant portion is illiquid or stake. Marginal price 🚀
@MatchasmMatt @EmmetPeppers why buy 51% of eth, when I (the gov't) can just instruct coinbase that it needs to not validate/include certain transactions (as I hold a regulatory hammer over their head)?
@wintonARK @MatchasmMatt @EmmetPeppers So, in this scenario, Coinbase would cease to validate those tx but Coinbase are not the majority and will therefore suffer penalties for failing to validate effectively and, presumably, then lose a % staking customers thereafter because they provide lower yields bec of penalties