Proof of Stake: How Exchanges Will Rule Ethereum

5d
10m read
Summary

Unlike the current fairly egalitarian Proof of Work (PoW) system, ethereum will move to a more abstract Proof of Stake (PoS) system which can leave it open to capture even by just one person. There are many other problems that derive from what can succinctly be called the merger of miners and exchanges in Proof of Stake, and to see those problems, let’s go to Proof of Work. The taking of control by the exchanges in dPoS was by those exchanges choosing a change of rules code upgrade in a fork. In PoS eth, there is only one way, you have to buy it. Either someone gives it to you, or the network gives it to you after you show it some Proof of Work.

Article Preview

The second biggest cryptocurrency is to engage in a big experiment that changes the balance of incentives with potentially decisive consequences.

Unlike the current fairly egalitarian Proof of Work (PoW) system, ethereum will move to a more abstract Proof of Stake (PoS) system which can leave it open to capture even by just one person.

Justin Sun recently revealed the illusion of decentralization in Steem, a delegated Proof of Stake (dPoS) system, by showing it is actually a fully centralized and controllable system to the point they’re now moving to freeze accounts.

The ease with which he took control is revealing because it only took three men, and three exchanges. One of the men being Justin Sun, and one of the exchanges being Poloniex which he owns. The other two were Huobi and Binance.

The exchanges simply used the tokens deposited in them to ‘vote’ on the new protocol rules or to vote against proposed protocol rules depending on what Justin Sun...

Read the full article @ TrustNodes