this post was submitted on 15 Apr 2025
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I'm an ETH-head. I understand it. It makes sense. Bitcoin? Bitcoin doesn't make any sense to me. I have severe concern about its long-term security model and the community's overall lack of desire to change anything about the protocol, including its security model.
That said, I'm overall negative about crypto in general these days. VCs, corporations, institutions, politicians, etc have all seemingly co-oped crypto in a big way. There's not much about the original cypherpunk ideals that remains anymore.
I'm part of Breadchain, a project spearheaded by The Blockchain Socialist to promote and fund left-aligned crypto projects that help workers and coops, etc. But again, these days I'm getting very jaded about the trajectory of crypto.
Ethereum's long-term security model is Proof of Stake.
At best, it's economic rent with holders getting free money from workers. At worst, it's a game of musical chairs that only people who don't use the money can win. Profits from securing the network ought to automatically adjust towards zero.
PoS is why Ethereum bailed out everyone with money in the DAO. PoW is why Bitcoin didn't bail out anyone with money in MtGox. The cost of auditing smart contracts ought to be internalized to the people using them, not an external cost for all users.
Upgrading Bitcoin is a great idea. Ethereum's flexibility has been proven useful by the huge variety of projects that run on it. So we should support BIP 300 and get some of that. But I would not consider Ethereum's security model to be an upgrade.
The workers are the ones securing the network. Anybody can participate, providing they have as little as 0.01 ETH to put up as collateral.
Ethereum base fees are in fact sent to a burn address and removed from circulation. Validators get priority tips only.
PoS is unrelated to the DAO hack. PoS is a consensus mechanism change from PoW. Instead of solving increasingly more difficult and energy-intensive puzzles to determine who gets to process the next block, in Ethereum it's randomly chosen amongst the validators.
Firstly, the DAO fork was not a rollback or bailout. It was a unique situation where the hackers had to wait 28 days for withdrawals, so a smart contract change was executed.
There was strong consensus across developers, users, miners and community alike - it was hardly a centralized decision.
Those who disagreed simply moved to Ethereum Classic. It's a win-win situation for all.
Ethereum was still a very, very new project then. You know which other project did a rollback when it was less than 2 years old? Value overflow incident - Bitcoin Wiki
EIP-999 being rejected is the final deathblow to this hypothesis. There was a chance to rollback 500,000 ETH to an entity managed by one of its co-founders, and the community overwhelmingly rejected it. Rollbacks do not happen on Ethereum.
An idea that virtually NOBODY in the bitcoin community agrees with. The entire value prop of Bitcoin is that it's ossified and simple.
Ethereum's model is sustainable 10, 20, 50 years from now. In order for Bitcoin's security to be sustainable, the price of BTC must rise. Each Bitcoin halving reduces the block reward for miners ... so unless the price just goes up forever as Bitcoin literally burns the planet, the result is a decrease in the overall hashrate of the network, allowing for an easier attack.
This is demonstrably true: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4727999
The workers - people with jobs - are not securing the Ethereum network. The rich can more easily afford the opportunity cost and transaction costs of staking, and thus get a higher percentage return than the poor with mostly cash reserves. It recreates the feedback cycle we're seeing with the dollar.
https://en.wikipedia.org/wiki/Economic_rent
I'm talking about net profits, not base fees. You would need something like difficulty adjustment.
No, it was related. I was an ETH user myself until then. The reason they did the bailout was because they were afraid the hacker would risk PoS.
And there wasn't a strong consensus. They explicitly said "the code is the contract" and pointed towards the code itself when asked about design intent before the hack. Those of us who disagreed with the bailout just left.
This was a bug in Bitcoin, not a bug in a user-created smart contact. Ethereum was working perfectly at the time of the hack.
Not doing it every time proves that these co-founders were not as influential as Vitalik Buterin (who had invested in the DAO). The DAO hacker's money was rolled back with a hard fork.
That would make altcoins worthwhile, wouldn't it! The value proposition of Bitcoin has not changed since it was the most complicated cryptocurrency.
This is addressed in the Bitcoin whitepaper. A block's transaction fees alone are already worth more than the total block reward used to be.