The last 24 hours have come as a shock to many people around the world as Russia officially declared war on Ukraine and started their invasion. Of course, I’m no geopolitical expert so I won’t be opining on the conflict itself, but I did want to expand on Vitalik’s tweet below about how Ethereum is neutral whereas individuals are not.
I’ve written about Ethereum’s credible neutrality before and explained why I believe it’s one of Ethereum’s more desirable properties (and probably one of its most least understood). Neutrality doesn’t come cheap either because you can’t have neutrality without decentralization and to have a decentralized network that can resist nation states takes a lot of resources. Think about it - Ethereum is only as secure as it is today because ETH’s market cap is so high which incentivizes more people to mine on the network making it costlier to attack (this gets even costlier under a Proof of Stake scheme).
Now, credibly neutral base layers such as Ethereum and Bitcoin have been built to allow anyone to partake in any financial transaction that they so wish. Obviously this means that activities such as terrorism financing and money laundering are able to freely happen on these platforms and there’s basically nothing any centralized entity can do to stop it. On the flip side, these platforms give an outlet to those who are being financially oppressed (for whatever reason) or simply want to opt out of the existing centralized financial systems.
Just because these platforms are neutral does not mean individuals have to be and to be honest, I don’t think any individual can ever claim to be truly neutral. As humans we have all sorts of emotions and biases that prevent us from being neutral - we’re no machines after all - and this is one of the key reasons why cryptocurrencies were created to begin with. Obviously the networks themselves have a last line of defense at the social layer (which is subjective humans), but the main goal of any credibly neutral platform is to ensure that the social layer only has to be used in a worst-case scenario (which is to say, it should never have to be used).
Anyway, I’m sure we’re all going to see many people saying that this war is “good for Bitcoin” or “good for crypto” but to be honest, I don’t think war is good for anything. Ethereum and Bitcoin and whatever else in crypto should be able to thrive in peace times just as much as in war times - the goal shouldn’t be to hope for human suffering just to pump some bags. Sadly though, I think there are quite a few people out there who revel in watching the world fall apart - but there are also plenty of people always there to pick up the pieces and keep moving forward.
Have a great day everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.
How is it more costly under proof of stake? With proof of work, you need to own our control mining equipment and power. With proof of stake you can launch unlimited virtual machines and simply buy ETH.