On September 1, Vitalik Buterin gave an interview to business writer Noah Smith and the Ethereum co-founder talked a lot about bitcoin and the long-term security of the network. Buterin also discussed the crash of the cryptoeconomy and insisted that he was “surprised the crash didn’t happen sooner.”
Buterin: Bitcoin fails to get the level of revenue required to secure what could be a multi-billion dollar system.
Ethereum co-founder Vitalik Buterin recently made a statement in an interview with the business writer Noah Smith and Buterin had a lot to say about the current state of crypto. Smith first asked Buterin what he thought about the recent crypto crash and Buterin replied that he thought the crash would have happened sooner.
“I was surprised the crash didn’t happen sooner“, said Buterin during the interview. “Normally, crypto bubbles last for about 6-9 months after surpassing the previous high, after which the rapid fall comes rather quickly. This time, the bull market lasted almost a year and a half“, the developer added.
Buterin also talked a lot about the company’s strategy. Bitcoin (BTC) and The Merge, Ethereum’s long-awaited transition from proof of work (PoW) to proof of stake (PoS). He says that bitcoin is not up to snuff when it comes to block grant revenue.
“In the long run, bitcoin’s security will come entirely from fees, and bitcoin is simply not succeeding in getting the level of revenue required to secure what could be a multi-billion dollar system “, said Vitalik Buterin.
When Noah Smith asked Buterin about Bitcoin’s use of energy, the Ethereum co-founder noted that PoS will not only reduce damage to the environment, but it’s also about keeping the blockchain secure.
“A consensus system that unnecessarily costs huge amounts of electricity is not only bad for the environment, it also requires the issuance of hundreds of thousands of security certificates. BTC or ETH every year“, stressed Buterin. “Eventually, of course, the issuance will decrease until it’s close to zero, at which point it will cease to be a problem, but then Bitcoin will begin to deal with another problem: how to make sure it stays secure.” Buterin added:
And these security motivations are also a really important driver behind Ethereum’s move to proof of stake.
Ethereum’s co-founder insists that the proof-of-work era is not sustainable and will not return.
Buterin understands that Bitcoin won’t change its consensus mechanism, at least for now, but if the blockchain were to come under attack, he thinks discussion of a hybrid PoS algorithm could come into play.
“Of course, if Bitcoin is actually attacked, I expect the political will to move to at least a hybrid proof of stake to emerge quickly, but I expect it to be a painful transition“, the software developer told Smith. The Ethereum co-founder said he thinks people have the wrong idea about proof-of-stake giving the largest stakeholders control of the network.
“There are also people who try to claim that PoS allows large stakeholders to control the protocol, but I think these arguments are simply wrong“, said Buterin. “They are based on the misconception that PoW and PoS are governance mechanisms, when in fact they are consensus mechanisms. All they do is help the network agree on the right channel.“
Buterin went on to note that he thinks the first version of PoW was a good starting point, but that today he thinks it is outdated, dying out, and unlikely to return.
The beginning of the highly democratized proof-of-work era was a beautiful thing, and it helped tremendously in making crypto-currency ownership more egalitarian, but it is not sustainable and it will not come back.