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

The upcoming consensus change that Ethereum, the second largest cryptocurrency by market capitalization, plans to implement in September has many users concerned about the possibility of censorship occurring at the protocol level. This means that even by interacting directly with smart contracts, blacklisted addresses will not be able to transact or operate in the base layer.

Incoming merger event sparks concern in crypto circles

The merger, 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 in terms of censorship. After the addresses of the smart contracts of Tornado Cash, a privacy-centric mixing protocol, were sanctioned and blacklisted by the US Treasury’s Office of Foreign Assets Control, the privacy and censorship-resistant nature of Ethereum has been in the spotlight.

Gabriel Shapiro, the general counsel of Delphi Digital, mean that major validators of Ethereum will try to push for a measure that brings censorship to a protocol level. This will allow them to operate in accordance with rules and also avoid being penalized for not including illegal transactions. On this issue, he stated that these entities “cannot help themselves by simply avoiding facilitating blocks containing US-sanctioned transactions, because under certain conditions they may be dramatically reduced 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 able to handle regulatory pressure than their proof-of-stake counterparts. counterparties. He explained:

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

Different points of view

However, not everyone shares this line of thinking. In fact, some believe that proof-of-stake consensus-based assets, such as Ethereum after the merger happens, are better prepared to face a censorship attack coming from the government. 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 carry out against Bitcoin and Ethereum, the complexity and 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 anywhere in the world.

Finally, Bons mean that regulators are not out to harm cryptocurrencies just yet, and that “a sensible middle ground must be found that 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 the protocol level? Tell us in the comments section below.

Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. Describing himself as late to the game, he entered the cryptosphere when the price spike occurred during December 2017. He has a computer engineering background, lives in Venezuela and is influenced by the cryptocurrency boom on a social level, offering a different point of view on crypto success and how it helps the unbanked and underserved.

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