After switching to POS, does Ethereum really threaten the status of bitcoin?
Since the birth of Ethereum, people have been talking about "Ethereum surpasses bitcoin". As the originator of crypto and the king of crypto, bitcoin has always been full of various challengers, but these challengers have all failed, with the exception of Ethereum. With the merger of Ethereum POS, this potential Ethereum milestone may be a big step closer to us.
There have been different opinions on the consensus mechanism of Ethereum to POS (proof of interest). Today, we will make a comprehensive comparison from the perspective of the relationship between Ethereum and bitcoin before and after it is transferred to POS, to see what threat Ethereum will bring to bitcoin after it is transferred to pos
Pow bitcoin vs pow Ethereum
Everything should start with the origin of Ethereum and its relationship with bitcoin. According to the previous exclusive interview with vitalik and his son by Fortune magazine, vitalik, the founder of Ethereum, known as a "prodigy", began to learn programming when he was very young under the influence of his native family. Vitalik learned about bitcoin from his engineer father when he was a teenager.
With in-depth understanding, vitalik once contributed articles to bitcoin news websites, and then co founded a magazine on bitcoin with bitcoin lovers. He analyzed his learning achievements and unique thinking through article output until vitalik dropped out of school at the age of 19, and Ethereum's white book was born.
At that time, this white paper was published in the bitcoin community as a proposal to "design a new bitcoin", which attracted a lot of attention and, of course, met with a lot of skeptical eyes. In general, the mainstream of bitcoin community obviously doesn't look down on this young man's proposal. Later, the brand-new project Ethereum with the title of "bitcoin 2.0" set sail.
To sum up the origin of Ethereum in one sentence, it can also be said to be a new direction proposed by bitcoin's "little fans".
In the following eight years, we also saw the tortuous progress of Ethereum. Of course, although many people have always called projects other than bitcoin "Shanzhai", pow Ethereum still shows a different side:
1γ Different routes
From the perspective of value capture and application, bitcoin has always followed the "digital gold" route, and this consensus has long been deeply rooted in the people's hearts, needless to say. Ethereum is compared to "digital oil". As a DAPP platform, Ethereum's token eth is used as a gas fee for smart contract calls to avoid resource abuse and attacks.
2γ Ethereum in the eyes of the bitcommunity
In the past, people always looked at Ethereum from the perspective of the Ethereum community. Today, we will look at this "little brother" from the perspective of the bitcoin community:
1. Bitcoiner despises the unlimited issuance of Ethereum
Bitcoin is always proud of its total cap and its scarcity. Ethereum goes the other way and does not set a cap. This has naturally led to many criticisms, saying that without a ceiling, there is no "air" to safeguard value.
Of course, the original intention of Ethereum's unlimited total amount design is to serve as a public chain of DAPP smart contracts. Considering that if the ecological volume is widely used, and the token inflation rate is too low, it will lead to a sharp rise in gas costs, and the cost of activities on the chain will become more and more expensive, which is not conducive to the sustainable development of ecology.
2. Bitcoiner despises Ethereum for adopting backward models
There has never been any bitcoin, only utxo. I believe many people have heard of this sentence. Utxo's unspent transaction output is also one of the excellent solutions that bitcoin is proud of. It greatly reduces the size of the database and can always maintain light and efficient processing. However, the traditional account model adopted by Ethereum is exactly the opposite. No matter whether it is effective or not, the status data will continue to accumulate and become more and more bloated until a single node can not process transactions. This problem is "status explosion", which is one of the potential "problems" that Ethereum has not solved so far.
To put it simply, bitcoin's utxo is a person who can't eat fat, and Ethereum's account model is a person who can eat a kilogram of meat. If this problem is not solved, as time goes on, bitcoin will still be young and active, and Ethereum will become fatter and fatter until it can't stand being in bed.
3. Bitcoiner despises Ethereum's fancy, "Shanzhai" and "scam"
In fact, many bicoiners have always thought that Ethereum, like other "copycats", is worthless in the long run, and even thinks that it is an "outright fraud", such as some famous "bitcoin maximalists". Earlier, Adam back, CEO of blockstream, listed Ethereum, ripple and other projects (mainly other projects with the top 10 market values except bitcoin) as a fraud.
Even when the Ethereum ecosystem is booming, these people's views have not changed. Recently, Michael Saylor, CEO of MicroStrategy, said that "Ethereum is immoral in nature", and also said that eth is "obviously a security". (V God and Ethereum community quickly fought back, and also revealed that Michael Saylor was charged with securities fraud by the US Securities and Exchange Commission as early as 2000, and then had to pay a fine to reach a settlement with the regulator.)
As a protocol layer, the bitcoin community has always advocated minimalism, simplicity is security. Ethereum itself can certainly not be as simple as bitcoin in terms of features and functions, which is also one of the troughs in the eyes of many bitcoiners.
Under the workload proof mechanism, at the beginning, Ethereum's computing power and number of nodes were naturally not enough compared with bitcoin.
POS Ethereum vs pow bitcoin
Many years have passed, BTC is still that BTC, and eth is constantly seeking transformation. Close to the merger of Ethereum POS, what new look will Ethereum POS bring us?
1γ Energy consumption, a radical narrative change under the global "double carbon" goal
Not long ago, Citibank released a research report specifically for the merger and upgrade of Ethereum POS, which said that once Ethereum started the upgrade, it might lead to a reduction in energy intensity, turn Ethereum into a deflationary asset, and possibly achieve a more scalable future roadmap through fragmentation. In general, Citigroup pointed out that after the merger, Ethereum can be considered as an energy-saving and environmentally friendly cryptocurrency, because energy consumption will be reduced by 99.95%. Once Ethereum becomes a deflationary asset, its status as a means of value storage will become more prominent.
In June 2021, the official website of the United Nations issued the document "is cryptocurrency a sustainable solution or a climate disaster?", The paper raises the problem of high energy consumption brought by bitcoin, and points out that the estimated energy consumption of bitcoin network is more than that of Kazakhstan, the Netherlands and other countries. Moreover, since fossil fuel power plants still account for a major part of the global energy structure, bitcoin mining can be said to be part of the cause of greenhouse gases and climate change. Compared with traditional credit card transactions, each bitcoin transaction consumes a huge amount of energy. For example, each MasterCard transaction only uses about 0.0006 kwh of energy, while each bitcoin transaction consumes 980 kwh. Some market analysts say that this energy consumption can power an ordinary Canadian household for more than three weeks.
At the same time, the article on the official website of the United Nations also recognized the crypto industry's search for low-energy solutions, and took the Ethereum to POS mechanism as a positive example. It was mentioned in the article that the Ethereum foundation, the organization behind Ethereum, was studying a new method of verifying transactions, that is, proof of interest consensus (POS). This new method can reduce the energy cost of each transaction by 99.95%. At the same time, many blockchain industry participants also want to ensure that the whole industry can finally achieve complete non carbonization.
In general, top institutions have also noticed that the Ethereum to POS scheme not only conforms to the alternative scheme of reducing energy consumption in the context of the global "double carbon" goal, but also strengthens the prominence of Ethereum as a means of value storage.
2γ Views that were despised by the bitcoin community in the past have been eliminated one by one
In recent years, the Ethereum ecosystem has continuously attracted the attention of the bitcoin community. We can observe that some members of the BCH and BSV communities, the two largest branches (bifurcations) of the bitcoin community, have begun to turn to Ethereum, which shows that this "little fan" who was once "despised" is changing people's views (especially the bitcoin community).
1. Reduce inflation and even deflation
There is still no issuance limit, but the dynamic Ethereum ecosystem, together with eip1559 and POS transfer, has greatly reduced inflation and may even lead to deflation in some cases. This huge change makes many people think that Ethereum will also become an important "value storage means" in the future, which is bitcoin's "iron rice bowl".
2. Capacity expansion and other solutions
With the introduction of layer2 and future fragmentation solutions, and solutions to the problem of state explosion, Ethereum ecology will provide reliable infrastructure for large-scale Web3 and metaverse. Although it is more complex than bitcoin as a protocol layer, its ecological progress over the years is worthy of this complexity and also proves its security and reliability. Through the development of Web3 applications such as defi, gamefi and metauniverse, we can also see the landing value of Ethereum's non "Ponzi" sustainable applications.
Summary
The once "little fans" are now really showing their muscles in front of bitcoin. No matter whether it is "Shanzhai" or not, there should be less prejudice against new things and solutions. Even though many projects have failed, their ultimate goal is to excel one day. It is undeniable that Ethereum is becoming more and more competitive. Let's wait and see in the next decade!
There have been different opinions on the consensus mechanism of Ethereum to POS (proof of interest). Today, we will make a comprehensive comparison from the perspective of the relationship between Ethereum and bitcoin before and after it is transferred to POS, to see what threat Ethereum will bring to bitcoin after it is transferred to pos
Pow bitcoin vs pow Ethereum
Everything should start with the origin of Ethereum and its relationship with bitcoin. According to the previous exclusive interview with vitalik and his son by Fortune magazine, vitalik, the founder of Ethereum, known as a "prodigy", began to learn programming when he was very young under the influence of his native family. Vitalik learned about bitcoin from his engineer father when he was a teenager.
With in-depth understanding, vitalik once contributed articles to bitcoin news websites, and then co founded a magazine on bitcoin with bitcoin lovers. He analyzed his learning achievements and unique thinking through article output until vitalik dropped out of school at the age of 19, and Ethereum's white book was born.
At that time, this white paper was published in the bitcoin community as a proposal to "design a new bitcoin", which attracted a lot of attention and, of course, met with a lot of skeptical eyes. In general, the mainstream of bitcoin community obviously doesn't look down on this young man's proposal. Later, the brand-new project Ethereum with the title of "bitcoin 2.0" set sail.
To sum up the origin of Ethereum in one sentence, it can also be said to be a new direction proposed by bitcoin's "little fans".
In the following eight years, we also saw the tortuous progress of Ethereum. Of course, although many people have always called projects other than bitcoin "Shanzhai", pow Ethereum still shows a different side:
1γ Different routes
From the perspective of value capture and application, bitcoin has always followed the "digital gold" route, and this consensus has long been deeply rooted in the people's hearts, needless to say. Ethereum is compared to "digital oil". As a DAPP platform, Ethereum's token eth is used as a gas fee for smart contract calls to avoid resource abuse and attacks.
2γ Ethereum in the eyes of the bitcommunity
In the past, people always looked at Ethereum from the perspective of the Ethereum community. Today, we will look at this "little brother" from the perspective of the bitcoin community:
1. Bitcoiner despises the unlimited issuance of Ethereum
Bitcoin is always proud of its total cap and its scarcity. Ethereum goes the other way and does not set a cap. This has naturally led to many criticisms, saying that without a ceiling, there is no "air" to safeguard value.
Of course, the original intention of Ethereum's unlimited total amount design is to serve as a public chain of DAPP smart contracts. Considering that if the ecological volume is widely used, and the token inflation rate is too low, it will lead to a sharp rise in gas costs, and the cost of activities on the chain will become more and more expensive, which is not conducive to the sustainable development of ecology.
2. Bitcoiner despises Ethereum for adopting backward models
There has never been any bitcoin, only utxo. I believe many people have heard of this sentence. Utxo's unspent transaction output is also one of the excellent solutions that bitcoin is proud of. It greatly reduces the size of the database and can always maintain light and efficient processing. However, the traditional account model adopted by Ethereum is exactly the opposite. No matter whether it is effective or not, the status data will continue to accumulate and become more and more bloated until a single node can not process transactions. This problem is "status explosion", which is one of the potential "problems" that Ethereum has not solved so far.
To put it simply, bitcoin's utxo is a person who can't eat fat, and Ethereum's account model is a person who can eat a kilogram of meat. If this problem is not solved, as time goes on, bitcoin will still be young and active, and Ethereum will become fatter and fatter until it can't stand being in bed.
3. Bitcoiner despises Ethereum's fancy, "Shanzhai" and "scam"
In fact, many bicoiners have always thought that Ethereum, like other "copycats", is worthless in the long run, and even thinks that it is an "outright fraud", such as some famous "bitcoin maximalists". Earlier, Adam back, CEO of blockstream, listed Ethereum, ripple and other projects (mainly other projects with the top 10 market values except bitcoin) as a fraud.
Even when the Ethereum ecosystem is booming, these people's views have not changed. Recently, Michael Saylor, CEO of MicroStrategy, said that "Ethereum is immoral in nature", and also said that eth is "obviously a security". (V God and Ethereum community quickly fought back, and also revealed that Michael Saylor was charged with securities fraud by the US Securities and Exchange Commission as early as 2000, and then had to pay a fine to reach a settlement with the regulator.)
As a protocol layer, the bitcoin community has always advocated minimalism, simplicity is security. Ethereum itself can certainly not be as simple as bitcoin in terms of features and functions, which is also one of the troughs in the eyes of many bitcoiners.
Under the workload proof mechanism, at the beginning, Ethereum's computing power and number of nodes were naturally not enough compared with bitcoin.
POS Ethereum vs pow bitcoin
Many years have passed, BTC is still that BTC, and eth is constantly seeking transformation. Close to the merger of Ethereum POS, what new look will Ethereum POS bring us?
1γ Energy consumption, a radical narrative change under the global "double carbon" goal
Not long ago, Citibank released a research report specifically for the merger and upgrade of Ethereum POS, which said that once Ethereum started the upgrade, it might lead to a reduction in energy intensity, turn Ethereum into a deflationary asset, and possibly achieve a more scalable future roadmap through fragmentation. In general, Citigroup pointed out that after the merger, Ethereum can be considered as an energy-saving and environmentally friendly cryptocurrency, because energy consumption will be reduced by 99.95%. Once Ethereum becomes a deflationary asset, its status as a means of value storage will become more prominent.
In June 2021, the official website of the United Nations issued the document "is cryptocurrency a sustainable solution or a climate disaster?", The paper raises the problem of high energy consumption brought by bitcoin, and points out that the estimated energy consumption of bitcoin network is more than that of Kazakhstan, the Netherlands and other countries. Moreover, since fossil fuel power plants still account for a major part of the global energy structure, bitcoin mining can be said to be part of the cause of greenhouse gases and climate change. Compared with traditional credit card transactions, each bitcoin transaction consumes a huge amount of energy. For example, each MasterCard transaction only uses about 0.0006 kwh of energy, while each bitcoin transaction consumes 980 kwh. Some market analysts say that this energy consumption can power an ordinary Canadian household for more than three weeks.
At the same time, the article on the official website of the United Nations also recognized the crypto industry's search for low-energy solutions, and took the Ethereum to POS mechanism as a positive example. It was mentioned in the article that the Ethereum foundation, the organization behind Ethereum, was studying a new method of verifying transactions, that is, proof of interest consensus (POS). This new method can reduce the energy cost of each transaction by 99.95%. At the same time, many blockchain industry participants also want to ensure that the whole industry can finally achieve complete non carbonization.
In general, top institutions have also noticed that the Ethereum to POS scheme not only conforms to the alternative scheme of reducing energy consumption in the context of the global "double carbon" goal, but also strengthens the prominence of Ethereum as a means of value storage.
2γ Views that were despised by the bitcoin community in the past have been eliminated one by one
In recent years, the Ethereum ecosystem has continuously attracted the attention of the bitcoin community. We can observe that some members of the BCH and BSV communities, the two largest branches (bifurcations) of the bitcoin community, have begun to turn to Ethereum, which shows that this "little fan" who was once "despised" is changing people's views (especially the bitcoin community).
1. Reduce inflation and even deflation
There is still no issuance limit, but the dynamic Ethereum ecosystem, together with eip1559 and POS transfer, has greatly reduced inflation and may even lead to deflation in some cases. This huge change makes many people think that Ethereum will also become an important "value storage means" in the future, which is bitcoin's "iron rice bowl".
2. Capacity expansion and other solutions
With the introduction of layer2 and future fragmentation solutions, and solutions to the problem of state explosion, Ethereum ecology will provide reliable infrastructure for large-scale Web3 and metaverse. Although it is more complex than bitcoin as a protocol layer, its ecological progress over the years is worthy of this complexity and also proves its security and reliability. Through the development of Web3 applications such as defi, gamefi and metauniverse, we can also see the landing value of Ethereum's non "Ponzi" sustainable applications.
Summary
The once "little fans" are now really showing their muscles in front of bitcoin. No matter whether it is "Shanzhai" or not, there should be less prejudice against new things and solutions. Even though many projects have failed, their ultimate goal is to excel one day. It is undeniable that Ethereum is becoming more and more competitive. Let's wait and see in the next decade!