Proof of Stake - A Dead End
The Merge has red flags, but everyone has rose colored glasses.
The big news this week of course is the Tornado cash incident where we had the first set of Ethereum addresses officially sanctioned by the United States. A pretty big marker in crypto history.
When blockchains gained popularity a few years ago, we all realised the need for scalability and started to brainstorm what some viable options might be to solve the scalability trilemma. What we all collectively landed on was an algorithm called Proof of Stake which allow those with capital on the network to check transactions rather than doing expensive computational work.
With this in mind, we basically allocated a ton of human capital to building new networks with this algorithm but more importantly, moving Ethereum to Proof of Stake. What wasn’t thought about from a security perspective was how the system might fare from social attacks.
Now, what happens when you have the largest Proof of Stake validators that are regulated entities and then get a request to process a transaction to do with a sanctioned address? Well, now we need to reach consensus about what the right set of sanctioned addresses are. But now how do we ensure that our blacklist has reached consensus? If only there was a technology that could do that… As you can see, we’ve basically just recreated a shittier version of the internet.
Now, why don’t that many people speak up about this? Well, bags. I’ve always been the biggest supporter of Ethereum and have had no interests in any other chains but it’s disappointing to see the lack of discussion around such a major issue.
The correct and logical outcome as a result of these events would be to put the Merge on hold to think from first principles about whether all of this makes sense. I was watching an episode on Unchained with Galois (Kevin) and I think he made a really great point. The developers view miners as these random entities that aren’t actually real. They haven’t taken the perspective of them and factored it into how the Merge will work. Even simply saying that there is a 0% chance that ETHPoW exists shows ignorance for the fact that miners have invested billons of dollars in hardware and are not going to let go so easily.
It all comes back to not taking different perspectives at the end of the day. The Merge was designed with a very narrow perspective and the cracks in the thinking are starting to show as the days go on.
I hope that we start collectively speaking about these issues because if we don’t we’re in for some very big surprises in the next few months.
Reject dogma, think for yourself.
Kerman Kohli is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.