Ethereum co-founder Vitalik Buterin recently expressed his thoughts on how he would have launched Bitcoin in a recent interview.
Surprisingly, Buterin stated that, while Proof-of-Stake (PoS) has advantages, particularly in terms of environmental effect, he believes Satoshi Nakamoto’s decision to use Proof-of-Work (PoW) was the appropriate one at the time.
Ethereum’s transition to a Proof-of-Stake blockchain is one of the most significant current developments in the crypto world. ETH 2.0 will deliver improved scalability, sustainability, and security, among other improvements.
The journey to ETH 2.0 is divided into three segments. The Beacon Chain is responsible for staking and laying the groundwork for the rest of the development. This went live in December 2020, over a year ago.
The Merge refers to the joining of the Beacon Chain with the existing ETH 1.0 chain. This is expected to become live in Q1/Q2 of 2022. However, speculation that the difficult time bomb would be postponed until May 2022 suggests that this phase may be behind schedule.
The time bomb is a mechanism that gradually makes PoW mining more difficult until Ethereum becomes unprofitable to mine. In effect, miners are being phased out.
Finally, Shard Chains distributes network demand among 64 additional chains for increased scalability and capacity. This is expected to be completed “sometime in 2022,” according to estimates.
This method is far more difficult than creating a fresh blockchain from the start. Running two parallel chains and then merging them creates technological issues that would not exist if PoS was used from the beginning.
Rather than bemoaning PoW as a concept, Buterin believes it has a place, particularly in the early days of bitcoin, when it was still finding its feet.
In terms of what Buterin would have done if he had founded Bitcoin, he paints a timeline that is disturbingly similar to what Ethereum is currently happening.
“I think it would have probably used proof-of-work for the first five years, and proof-of-stake after.”
He went on to say that PoW is a democratic method of token distribution. While ASIC mining may have broken this by making Bitcoin mining the exclusive domain of well-funded corporations, Buterin points out that at the beginning, anyone could mine Bitcoin using a CPU. Then, subsequently, with a GPU.