Bitcoin News and Finance
Ethereum’s Pivot to Proof-of-Stake Consensus Worries Users About the Possibility of Protocol Level Censorship Skip to main content

Ethereum’s Pivot to Proof-of-Stake Consensus Worries Users About the Possibility of Protocol Level Censorship

Ethereum's Pivot to Proof of Stake Consensus Worries Users About the Possibility of Protocol Level Censorship

The upcoming consensus change that Ethereum, the second largest cryptocurrency by market cap, is planning to execute in September has worried many users about the possibility of censorship happening at a protocol level. This means that, even by interacting directly with smart contracts, blacklisted addresses would not be able to transact or operate in the base layer.

Incoming Merge Event Triggers Worries in Crypto Circles

The Merge, Ethereum’s migration from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus algorithm has raised concerns about the future of the chain when it comes to censorship. After the addresses of the smart contracts of Tornado Cash, a privacy-centered mixing protocol, were sanctioned and blacklisted by the U.S. Treasury’s Office of Foreign Assets Control, the privacy and censorship-resistant character of Ethereum has been in the spotlight.

Gabriel Shapiro, the general counselor at Delphi Digital, believes that big validators of Ethereum will try to push for a measure that brings censorship to a protocol level. This would allow them to operate in compliance with rules, and also avoid being penalized for not including illegal transactions. About this issue, he stated these entities “can’t self-help by merely avoiding facilitation of blocks containing U.S.-sanctioned transactions, because under certain conditions they might be dramatically slashed from doing so.”

On the other hand, Discusfish, co-founder of F2pool, an ethereum and bitcoin mining pool operation, stated that proof-of-work (PoW) consensus assets were more capable to deal with regulatory pressure than their proof-of-stake-based counterparts. He explained:

In the discussion about PoS and PoW under regulatory pressure these days, there is one key point to pay attention to: Whether the block producer can remain anonymous and package some transactions that conform to the consensus on the chain (which may contain some sensitive transactions). PoW can currently do it, PoS currently has certain difficulties because of the need to stake the assets on the chain.

Different Points of View

However, not everyone shares this train of thought. In fact, there are some that think that proof-of-stake consensus-based assets, such as Ethereum after The Merge happens, are better prepared to face a censorship attack coming from government regulators. Justin Bons, founder and CIO of Cybercapital, is one of them.

Bons argues that while an attack of this nature would be very difficult to pull off against Bitcoin and Ethereum, the complexity and the physical presence that PoW-based chains need to operate would make them easier to target than proof-of-stake assets. That’s because PoS can be operated with low-power equipment from any place in the world.

Finally, Bons believes that regulators are not out to hurt cryptocurrencies yet and that “a sane middle ground must be found which preserves the credible neutrality of blockchains, ensuring privacy for individuals and compliance for companies.”

What do you think about the possibility of censorship happening in Ethereum at a protocol level? Tell us in the comments section below.

Labels:

Comments

Post a Comment

Popular posts from this blog

Custodial Lightning Network Service Attack Discovered by LN ‘Newbie’ — Hacker Strikes 6 LN Custodians

On September 18, a Redditor posted to the r/bitcoin forum and explained how he discovered a way to “attack [the] lightning Network’s custodial services.” The Reddit account dubbed “Reckless Satoshi” wanted to figure out if a “discrepancy between real routing fees and service’s transaction fee can be exploited for a profit.” The researcher disclosed that he wanted to see how large the damage could be and said “it is bad.” 6 Lightning Network Custodial Services Attacked, Researcher Discloses Findings to Offenders Prior to Public Disclosure A Redditor called Reckless Satoshi published a disclosure post on r/bitcoin this past Saturday and disclosed how he had found a vulnerability with routing fees and some of the Lightning Network’s custodial services. The research attack was done in good faith and after it was complete he disclosed the bugs to the offending services before publishing his findings. Reckless Satoshi used the Lightning Network (LN) attack on six different services incl...
Post a Comment
Read more

Axie Infinity Down 40% Since Last Week’s Price High, Protocol Revenue Outshines Competitors

Last week, the game token leveraged within the Axie Infinity gaming universe skyrocketed to all-time highs, while other crypto markets remained extremely lackluster. During the last seven days, Axie Infinity’s platform token has dropped significantly in value shedding more than 12%. Meanwhile, the game platform’s smooth love potion token has slid over 8% over the last 24 hours. Axie Infinity Down More Than 40% Since All-Time High Not too long ago, the axie infinity (AXS) token was a topical conversation because it reached an all-time high on July 15. At the time, AXS managed to capture $28.93 per unit and since then it has shed 12.8% during the last seven days. The axie infinity (AXS) token is used within the blockchain-based game that involves battles between token-based creatures called “Axies.” AXS is used for the game’s governance system as well as other actions within the game. At the time of writing axie infinity (AXS) is exchanging hands for $16.70 per coin. AXS/USD on Ju...
Post a Comment
Read more

Play-to-Earn Game From Polker (PKR) Exchange Listing – Endorsed by Akon

The Play-to-Earn NFT based Polker.Game ‘s native token $PKR has been officially listed on the popular centralized exchange BitMart. Polker.game has been in the spotlight recently as Akon, the American R&B superstar and record producer gave his official endorsement of polker stating that the “game is revolutionary” and that Polker is “hands down.. the best play to earn, NFT game in the space.”. With the BitMart listing and celebrity endorsement from Akon, Polker is perfectly positioned to become a major player in the Play-to-Earn league. Watch Akon’s Video Here What is Play-to-Earn? Although not a new concept, play-to-earn has become a trending term due to the popularity of the NFT game AXIE infinity. In the past, previous play-to-earn games have also achieved success – however, thanks to the huge amount of development in the blockchain space in recent years the gaming experience is now massively improved. Play-to-Earn games are essentially free to play and open to anyone and...
Post a Comment
Read more

China to Crack Down on Copyright Infringement Through NFTs

Authorities in China are going after creators of digital collectibles based on other people’s works of art, the use of which was not authorized. The government offensive is part of a campaign to combat online copyright infringement and piracy with the participation of several departments. Regulators in China Move to Strengthen Copyright Supervision of Online Platforms The National Copyright Administration of China (NCAC) has recently launched a campaign against copyright infringement and piracy on the internet, together with the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Internet Information Office of the People’s Republic. A major objective of the initiative is to improve copyright supervision of online businesses by investigating cases involving the sale and distribution of infringing products on short video, live broadcast and e-commerce platforms, and promptly dealing with infringing content, the agency announced in a press r...
Post a Comment
Read more
Blogarama - Blog Directory