$ETH: Bitcoin Developer and Educator Jimmy Song Says ‘ETH PoS’ Is ‘A Roach Motel’
On Saturday (November 26, 2022), prominent Bitcoin developer, educator and entrepreneur Jimmy Song expressed his thoughts on Ethereum 2.0’s Proof-of-Stake (PoS) consensus mechanism.
Around 07:00 UTC on September 15, Ethereum’s Merge upgrade was completed, which meant that the Ethereum network moved to PoS consensus from the much more energy-hungry Proof-of-Work (PoW) consensus.
Ethereum co-creator Vitalik Buterin called this successful upgrade “a huge moment for the Ethereum ecosystem”:
Two problems with staking in Ethereum 2.0 are that your state is locked (unlike in some other PoS networks, such as Cardano) and that withdrawals are currently not allowed.
On the day the merger was completed, a Cardano fan pointed out that Kraken has recently told users that $ETH staking will not be available until Ethereum has its Shanghai protocol upgrade (which was expected to take place in 2023). Cardano and Ethereum co-founder Charles Hoskinson then sent out a tweet mocking Ethereum’s PoS model by subtly noting that Cardano’s PoS design and implementation does not suffer from this problem:
Then, on September 16, 2022, after $ADA stake pool operator pointed out that no date has been announced for Ethereum’s Shanghai upgrade, the IOG boss compared the situation that $ETH players find themselves in to being stuck in “Hotel California”.
As you may know, “Hotel California” is “the title track from the Eagles’ album of the same name and was released as a single in February 1977.” This is the last part of the song:
“The last thing I remember was me
Running towards the door
I had to find the passage back
To the place I was before
“Relax,” said the night man
“We are programmed to receive
You can check out whenever you want
But you can never leave’“
Before the merge, here’s what an FAQ on the Ethereum Foundation’s website said about withdrawals:
“The staked ETH, stake rewards to date, and newly issued ETH immediately after The Merge will remain locked on the Beacon Chain with no option to withdraw.
“Withdrawals are planned for the Shanghai upgrade, the next major upgrade after The Merge. This means that newly issued ETH, even if accumulated on the Beacon Chain, will remain locked and illiquid for at least 6-12 months after The Merge.“
This means that the Shanghai upgrade was estimated to take place sometime in 2023. After the merger was completed, the Ethereum Foundation decided it was better not to make any promises about the expected date of the Shanghai upgrade:
As of November 26, 2022, here’s what the withdrawal section of the FAQ on the Ethereum Foundation website says:
Earlier today, Jimmy Song decided to share his thoughts on this current lack of ability to extract stakes in Ethereum 2.0:
In an op-ed piece (titled “Bitcoin Songsheet: How Altcoiners Use Bitcoin To Rent Seek”) for Bitcoin Magazine published on September 19, 2022, Song said that altcoiners “criticize Bitcoin every time they get a chance to build interest in their own coin” and that they “engage in self-interested mental gymnastics worthy of the most partisan politician.” He also mentioned that their behavior should not be ignored because “they cause enormous amounts of harm”.
Song then went on to “explain how altcoins hinder Bitcoin adoption, destroy values and create terrible habits”, i.e. why they are “unequivocally immoral”:
- Altcoin projects are “rent seekers”; by calling themselves “decentralized” cryptocurrencies, they associate themselves with Bitcoin, which “legitimizes their project in the eyes of the public, or at least to the extent that Bitcoin is legitimate” and “absolves them of any liability should anything go wrong”.
- Altcoin projects hinder Bitcoin adoption by “muddying the waters”, creating “all kinds of confusion by saying things like ‘Decentralization is a spectrum’ and ‘Blockchain technology has many uses'”.
- Since altcoins are “fiat money complete with a central bank, monetary input and control”, they “inherit all the moral problems of fiat money”.
- “Altcoins are based on trust that is easily abused for the benefit of VCs”, which can lead to “destruction of value”.
- “Altcoins exploit the most basic instincts of humans, which is to get something for nothing.”
- “Altcoiners not only sow confusion and collude with Bitcoin’s legitimacy, but they actively attack Bitcoin. For example, they claim that proof of work is bad because it uses too much energy.”
Image credit
Featured image via Pixabay
