Users are worried about possible protocol-level censorship due to Ethereum’s upcoming consensus. It means that blacklisted addresses, although they can interact with smart contracts directly, would be prevented from transacting or operating in the base layer..
Crypto Circles Are Worried About Incoming Merge Events
Merge, Ethereum’s migration from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus algorithm has raised concerns about the future of the chain when it comes to censorship. After the addresses of the smart contracts of Tornado Cash, a privacy-centered mixing protocol, were sanctioned and blacklisted by the U.S. Treasury’s Office of Foreign Assets Control, the privacy and censorship-resistant character of Ethereum has been in the spotlight.
Gabriel Shapiro is the General Counselor at Delphi Digital. believesThe Ethereum’s big crypto-validators will push for an Ethereum protocol level censorship measure. It would enable them to follow rules while also avoiding being punished for not including illegal transactions. About this issue, he stated these entities “can’t self-help by merely avoiding facilitation of blocks containing U.S.-sanctioned transactions, because under certain conditions they might be dramatically slashed from doing so.”
Discusfish (co-founder of F2pool), an ethereum- and bitcoin-mining pool, said that proof-of work (PoW), consensus assets could better withstand regulatory pressure than proof-of stake-based counterparts. He explained:
One key thing to remember in the current discussion on PoS and PoW is whether the block producer can keep his identity anonymous and bundle transactions that comply with the consensus of the chain. This may include sensitive transactions. PoW is capable of doing it at the moment, but PoS faces certain problems due to the requirement to stake assets on the chain.
Different points of view
This thought is not shared by everyone. Some people believe that assets based on proof-of-stake, like Ethereum, after The Merge, will be more resilient to censorship attacks from the government regulators. Justin Bons (founder and CIO at Cybercapital), is one example.
Bons claims that, while it would be difficult to attack Bitcoin or Ethereum with this type of attack, PoW-based chain’s complexity and physical presence would make them more attractive than proof-of stake assets. That’s because PoS can be operated with low-power equipment from any place in the world.
Final word: Bons believes that regulators are not out to hurt cryptocurrencies yet and that “a sane middle ground must be found which preserves the credible neutrality of blockchains, ensuring privacy for individuals and compliance for companies.”
Do you have any thoughts about the possible existence of censorship at protocol-level in Ethereum? Leave a comment below.
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