ETH’s Vitalik Buterin: Bitcoin will also need to consider ‘painful transition’ to PoS to keep BTC secure
10:56, 2 September 2022
Ethereum’s co-founder Vitalik Buterin predicts that Bitcoin will need to consider a ‘painful transition’ to a Proof-of-Stake (PoS) consensus mechanism.
According to Buterin, Bitcoin's Proof-of-Work algorithm (PoW) is less secure than PoS and ‘unsustainable’, he argues in an interview with Noah Smith, published today.
Ethereum, the world’s second-biggest blockchain after Bitcoin (BTC), is itself in the final stages of the long-awaited transition from PoW to PoS. The switch, known as the Merge, is expected to finalize between 10 and 20 September.
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The 28-year old calculated that PoS can buy “something like 20 times more security [than PoW] for the same cost”.
“Basically, participating as a PoW miner has medium ongoing costs and medium entry costs, but being a PoS validator has low ongoing costs and high entry costs,” he said.
“It turns out that how secure you are depends on just the entry costs, as that's what an attacker has to pay to attack,” he added.
According to Buterin's count, if Bitcoin's network grew to $5trn, it would only take $5bn to attack the chain.
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Highly democratized early PoW is ‘not coming back’
Buterin acknowledged that the transition would be politically unfeasible among Bitcoiners - PoW proponents.
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But he predicted that a successful attack on Bitcoin's network could lead to a change of heart: “Of course, if Bitcoin actually gets attacked, I do expect that the political will to switch to at least hybrid PoS will quickly appear, but I expect that to be a painful transition.”
Buterin also noted that PoW mining farms outside the US “seem to be close to various governments,” and hence the narrative of PoW being censorship resistant is “highly contingent in the future.”
“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,” the most famous person in the cryptocurrency world asserted.
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