Ethereum is getting close to making the transition from the Proof-of-Work (PoW) consensus protocol to the Proof-of-Stake (PoS) convergence protocol.It is not exactly ground-breaking news that the cryptocurrency with the second-largest market cap is getting ready to implement a significant operational adjustment. PoW stands for Proof of Work. PoS stands for Proof of Stake.
The anxiety felt by members of the Ethereum community continues to grow as the September Merge date draws closer. Despite this, users are becoming increasingly apprehensive about the likelihood of discrimination occurring during the protocol stage of the changeover.
To put it another way, blacklisted wallets could not be able to conduct transactions at the base layer of the protocol even if they are able to interface effectively with blockchain networks.
Concerns Have Been Raised Within the Cryptocurrency Industry Regarding the Upcoming Merge Event
Concerns have been raised about the future of the chain, despite the fact that the crypto community is quite enthusiastic about the approaching shift. This is due to the fact that filtering at the protocol level is likely going to impede the expansion of the network after the unification.
The cryptocurrency mixing infrastructure that is professionally controlled provides a fantastic illustration of what to anticipate in the form of Tornado Cash. Following the sanctioning and blocking of Tornado Cash by the Office of Foreign Assets Control of the United States Treasury, Ethereum is currently under investigation.
The majority of crypto groups are curious about whether or not the network possesses the resilience necessary to withstand a potential blow from the regulator.
Gabriel Shapiro, who works at Delphi Digitals, is certain that the participating nodes working on Ethereum will attempt to incorporate safeguards to prevent censorship at the protocol level. If this were done, the infrastructure would be able to function in accordance with the rules and would not be subject to any penalties.
On the other side, Shapiro made the observation that entities have a disadvantage because they are unable to stop enabling block transactions that the United States sanctions. However, if specific conditions are met, individuals may be able to significantly reduce this inclination.
Some people believe that proof-of-work consensus algorithms are the most suited to comply with regulatory constraints, which is another intriguing thing to think about. This is due to the fact that PoW can facilitate anonymous transactions, but PoS has difficulty staking assets over several chains.
People like Justin Bons are in agreement despite the ongoing debate on the degree to which PoS assets are protected against censorship attacks from regulators. Justin Bond, the chairman of Cybercapital, believes that a fight with policymakers over assets such as Bitcoin and Ethereum would be difficult to bring off successfully. Nonetheless, due to the intricacy of PoW-based systems and their actual presence in the world, they are more susceptible to suppression attempts than PoS chains are. The reasoning for this is that point-of-sale (PoS) instruments have a lower energy consumption rate and can operate more rapidly and efficiently than their point-of-work (PoW) equivalents wherever in the globe.
According to Bons, wherever proof-of-work consensus is being employed, governments have more frequently enforced stringent rules because the execution of the protocol requires a significant amount of energy. And the majority of crypto businesses have come to the conclusion that a PoS-based proposed protocol is the way of the future for the continued success of the industry.
Responding on the regular crackdowns that regulators have been carrying out on cryptocurrency exchanges, Bons disclosed that they have no intention of stopping people from using and adopting cryptocurrencies. In order to guarantee the impartiality of blockchain networks, the founder of Cybercapital has advocated for a compromise solution. Security measures of personal privacy for individuals and compliance with legal requirements by businesses are also quite important.