Vitalik Buterin defends Ethereum POS amid community outrage

Ethereum founder Vitalik Buterin responded to community concerns regarding the network's transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS).

Over the past week, Ethereum's PoS transition has faced scrutiny from community members, particularly amid concerns it prompted further scrutiny by US regulators.

Was the Ethereum to PoS transition a mistake?

In the year Since its launch in July 2015, Ethereum has operated on a PoW consensus mechanism similar to Bitcoin. In PoW, participants compete to solve cryptographic algorithms that require a lot of computing power and labor to verify each block in the blockchain.

Concerns about the environmental impact of PoW cryptocurrencies have prompted authorities in various countries to support their ban for more sustainable alternatives.

In September 2022, Ethereum developers began a major transition to PoS infrastructure known as the “merger.” This massive change was done by replacing miners with stakeholders, addressing environmental concerns and aligning with Ethereum's long-term goals.

Read More: Proof of Work and Proof of Stock Explained.

Vitalik Buterin emphasized the importance of this transition, highlighting the centrality of PoW and its temporary nature before the implementation of PoS.

“PoW was also centralized. It's not talked about much, because everyone knows it's only a temporary platform until PoS. And that probably doesn't even get into how we got rid of ASICs because the upcoming PoS switch had no incentive to build them,” Buterin said.

After completing the transition to the PoS chain, Ethereum has seen an increase in validator numbers and demand. It holds more than 25% of the ETH circulating supply stock, enhancing network security and providing yield to participants.

However, Ethereum staking has drawn scrutiny from the Securities and Exchange Commission (SEC). SEC Chairman Gary Gensler has suggested that PoW cryptocurrencies may meet securities requirements that allow staking under the Howey test.

Still, a Consensus spokesperson told BeinCrypto that Ethereum's transition to PoS has nothing to do with the SEC's decision, Ethereum Foundation.

“There is nothing about the proof of stake itself and the proof of work that does not make Ethereum safe. I really think that this is the only explanation why the SEC is taking away from the question of Ethereum, because of course, there is a famous speech in 2018, director Hinman said that Ethereum was not safe. , ” said a Consensus spokesman.

The uncertainty surrounding Ethereum's regulatory status is relevant, impacting compliance efforts for entities dealing with ETH.