Home CryptocurrencyBitcoin Bitcoin proponents argue that PoS rewards are not “revenues,” Vitalik retorts

Bitcoin proponents argue that PoS rewards are not “revenues,” Vitalik retorts

by SuperiorInvest

Bitcoin indie developer and advocate Udi Wertheimer caused quite a stir on crypto Twitter earlier on September 12 after claiming that proof of stake (PoS) The system of rewards based on the return on bets is more of a punishment for non-stickers.

Wertheimer, who is a known critic of Ethereum, believes that the PoS staking reward system is not exactly a yield reward. In PoS staking, the user cannot do anything with their staked ETH, while those who do not stake their tokens and participate in other network activities are not rewarded.

With the Ethereum Merge just days away, the sneaky PoS system hasn’t gone down well with the Ethereum community, including co-founder Vitalik Buterin.

Buterin responded to Wertheimer’s criticism by claiming that Bitcoin mining is not very different from PoS staking. proof of work (PoW) mining “penalizes anyone with a smaller percentage of hashpower than their percentage of the coin supply”.

Wertheimer was quick to remind Buterin that miners and holders are two different sets that don’t necessarily overlap in the PoW ecosystem, while the same cannot be said for the PoS system. He further explained that with liquid bets, it is expected that holders and bets overlap due to a bug in the reward system.

Related: Ethereum Merge: How Will the PoS Transition Affect the ETH Ecosystem?

Another user claimed that the revenue comes from the gas fee paid by the user to process the transaction, however Wertheimer was quick to point out that the average block fee is only 1% of the total revenue rewards.

So the rest of the yield reward has to come from somewhere else, which many believe could come from printing more ETH, making the value of existing ETH lower and inflationary.

The merger, scheduled between September 13th and 15th, depending on network hashpower, will see Ethereum transition to a PoS mining consensus from its current PoW. Ethereum developers and supporters say the move would make the network more environmentally friendly and scalable. However, critics have warned aspect of centralization merger and how this move can make the Ethereum network more vulnerable to security risks.

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