On September 1st, Noah Smith, an economics author, recently engaged with Vitalik Buterin, the co-founder of Ethereum, in an interview.
Buterin had a lot to say about Bitcoin in the said interview, along with the cryptocurrency’s long-term security.
He also talked about the crypto market’s crash and also stated that he was surprised it had not happened earlier.
It appeared that Vitalik Buterin had a lot of things to say when it came to crypto. Ethereum’s co-founder shared his views about the crypto economy’s crash and that he had expected it sooner.
Buterin stated in the interview that it should have happened earlier because crypto bubbles do not last for more than 6 to 9 months once they have crossed the previous highs.
He says that the drop comes rather rapidly, but the bull market had continued this time around for almost one and a half year.
The developer also talked a lot about the Bitcoin (BTC) network, along with Ethereum’s Merge, which is being discussed a lot these days.
This refers to the Ethereum network transition from a proof-of-work consensus algorithm to a proof-of-stake (PoS) one.
The Ethereum co-founder said that Bitcoin was not doing so good where fee revenue from blocks was concerned. Buterin said that the network’s security would completely depend on fees in the long run.
He stated that the network was unable to generate enough fee revenue that would be needed for making it a multi-trillion-dollar system.
The energy usage of the world’s largest cryptocurrency was also discussed in the interview and Buterin said that shifting to PoS would not only reduce the impact on the environment but also help in security.
He stated that the blockchain could stay more secure with a PoS protocol. He said that if a consensus system costs of electricity, it is certainly bad for the environment.
But, he also added that it requires issuing hundreds of thousands of BTC each year. He said that issuance would reduce to zero eventually.
When that happens, Bitcoin will have to start worrying about how to maintain security. He said that security was also one of the reasons why Ethereum was transitioning to proof-of-stake.
A hybrid system
Buterin acknowledged that Bitcoin’s consensus mechanism was not going to change, but he believes that a hybrid PoS algorithm could be explored if the blockchain was attacked.
The software developer said that if it does decide to shift to a hybrid PoS system, it would be quite painful.
He also said that people have a misconception of PoS that it gives control of the network to the largest stakeholders, but that is not true.
He said that they believe that PoW and PoS are actually governance mechanisms, but they are really consensus mechanisms.
He said that they only help the network in choosing the right chain. He also believes that PoW was a good way to start, but it has now become antiquated and it is unlikely to return.