Bitcoin also needs to consider a “painful transition” to PoS to keep BTC safe

Buterin made a number of proof-of-stake arguments ahead of the Ethereum to PoS transition. – Photo: Getty

Ethereum co-founder Vitalik Buterin predicts that Bitcoin will have to consider a “painful transition” to a Proof-of-Stake (PoS) consensus mechanism.

According to Buterin, Bitcoin’s proof-of-work (PoW) algorithm is less secure than PoS and “unsustainable,” he argues in an interview with Noah Smith published today.

Ethereum, the second largest blockchain in the world after Bitcoin (BTC), is itself in the final stages of the long-awaited transition from PoW to PoS. The switch, known as the merge, is expected to be complete between September 10th and 20th.

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The 28-year-old calculated that with PoS “you can buy about 20 times more security [than PoW] at the same price”.

“Basically, being a PoW miner has medium running costs and medium entry costs, but being a PoS validator has low running costs and high entry costs,” he said.

“It turns out that your security only depends on the cost of entry, because that’s what an attacker has to pay for an attack,” he added.

According to Buterin’s count, if Bitcoin’s network grew to $5 trillion, it would only take $5 billion to attack the chain.

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Highly democratized early POWs are ‘not coming back’

Butrerin acknowledged that the transition among bitcoiners — PoW proponents — would be politically unfeasible.

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However, he predicted that a successful attack on Bitcoin’s network could lead to a change of heart: “Of course, if Bitcoin is actually attacked, I expect that the political will to move to at least hybrid PoS will emerge quickly, but that I expect to be a painful transition.”

Buterin also noted that outside the US, PoW mining farms “appear to be close to various governments” and thus the narrative of PoW being censorship-resistant is “highly conditional in the future.”

“The heavily democratized early proof-of-work era was a beautiful thing, and it did tremendously to make cryptocurrency ownership more egalitarian, but it is unsustainable and is not coming back,” claimed the most famous person in the world of cryptocurrencies.

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