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Swan Bitcoin founder Brandon Quittem said Ethereum (ETH) co-founder Vitalik Buterin did not deeply understand the Proof of Work (PoW) consensus mechanism.
1/ Said “Vitalik doesn’t have a deep understanding of PoW”
I don’t know if I’m right or wrong, but here are some examples. @Vitalik Buterin Misconceptions about PoW
Brandon Quittem (@Bquittem) August 15, 2022
on August 15th twitter threadKittem gave an example that he believes proves that Buterin does not understand the mechanism.
The first of Buterin’s allegations Quittem questioned concerns exchanges that stake customer deposits and the belief that “PoW can be captured by large-scale mining.”
3/ V makes a lot of mistakes with this…
A) V does not consider exchanges to bet customer deposits. (Laughter) How could he have missed this?
B) PoW could be caught by big mining companies
Cheap energy is geographically distributed and often in small packages. Prefers small miner fat tails. pic.twitter.com/bC9GKUoL9y
Brandon Quittem (@Bquittem) August 15, 2022
Quittem noted that 11 regulated providers already control 67% of Ethereum staking, demonstrating the risks of centralization and government sanctions.
Quittem went on to say Buterin’s logic that exchanges would not bet customers’ holdings without their consent was wrong.
Bitcoin (BTC) proponents said the risk Buterin highlighted is the main reason to outsource staking. It incentivizes exchanges/providers to devour the supply.
10/ Many PoS chains work well @Vitalik Buterin
If you don’t mind censorship resistance… go ahead with PoS.
Otherwise, check out BSC, Solona, Tron, Stream, and Peercoin. Etherians don’t want to go in that direction, do they? pic.twitter.com/dKNaYsiEqp
Brandon Quittem (@Bquittem) August 15, 2022
According to Quittem, Ethereum is at risk of censorship, citing other blockchain networks such as Solana (SOL), Tron (TRX) and Binance Smart Chain (BSC).
The cryptocurrency community has identified this censorship risk in light of the recent US sanctions against Tornado Cash.
Coinbase, meanwhile, has said it would rather shut down its staking service than comply with regulatory demands to censor transactions.
Buterin has previously argued that Proof of Stake (PoS) has a lower barrier to entry than PoW. According to Buterin, the cost of 32 ETH is much cheaper than building an ASIC mining company.
8.1/ @Vitalik Buterin Claiming barriers to entry
PoS: 32 ETH currently costs $60,000, which most people cannot afford. So we do delegation which is a centralization risk.
PoW: Home BTC miners can get started today by purchasing S9 for $200. (Profitability varies greatly) pic.twitter.com/k3CMtVBSfO
Brandon Quittem (@Bquittem) August 15, 2022
However, Quittem refutes this view, stating that a home Bitcoin miner can get an S9 mining machine for as little as $200, while staking Ethereum costs 32 ETH (around $60,000).
Furthermore, he questioned Vitalik’s claim that ASIC manufacturers are monopolies and that mining equipment is expensive. In his view, risks continue to decline as ASIC mining equipment becomes more commoditized and manufacturer monopolies decrease.
4/ V Claims ASIC Manufacturers Are Monopolies
This risk is real for Bitcoin, but it is decreasing day by day as ASICs become commoditized and manufacturer bottlenecks decrease.
(~ ASICS stock to flow has increased over time)
As a bigger issue here at PoS @nic__carter Point out. pic.twitter.com/FAa91J6XXT
Brandon Quittem (@Bquittem) August 15, 2022
Buterin argued that PoW would collapse more quickly under more restrictive government conditions, while staking would be easier to cover up.
6/ Physical PoW is easier to attack than digital PoS
PoW: Attacks require global coordination in a multipolar world. High attack and easy to miss.
PoS: Eth stake is in the same financial trap as gold. Cheap attack, hard to stop.
time @kendallweihe pic.twitter.com/9z7WvAcQvv
Brandon Quittem (@Bquittem) August 15, 2022
But Quittem doesn’t see it that way, highlighting Kendall Weihe’s tweet saying that PoS is vulnerable to government funding, whereas PoW can only be adopted by government power. .
Quittem continued that attacks on PoW require global coordination, are costly and can easily fail. On the other hand, Eth stake is in the same financial trap as gold. Cheap attack, hard to stop.
7/ Vitalik says separation of powers is the same in PoW and PoS
Big problem here…
PoS: economic power = political power. It’s no longer neutral, it’s political money. New Boss Old Boss.
PoW: Separate economic and political power.Enabling Neutral Commodity Money pic.twitter.com/eoXWpjE5fn
Brandon Quittem (@Bquittem) August 15, 2022
Quittem also disagreed with Vitalik’s assertion that PoS and PoW have the same separation of powers. Instead, he believed that in PoS economic power equals political power, while in PoW the two are separated.
Quittem discredited several other claims by the Ethereum co-founder, calling PoW, not PoS, an innovation.
12/ Remember that PoW is an innovation here.
PoW enables non-political money.
Abandoning what ETH works (PoW) seems very risky.
It’s too late now. The social consensus in ETH Land is that PoW is bad.
How many people confirmed this claim? How many people trusted Vitalik because he is smart?
Brandon Quittem (@Bquittem) August 15, 2022
According to him, switching ETH to PoS is highly risky, but it is already too late and PoS is likely to give state control over the blockchain space.
