Vitalik Buterin, the founder of Ethereum has once again ignited a debate – Is Ethereum a Security or Commodity? Vitalik took to Twitter this time to answer to allegations against Proof-Of-Stake. The hornets’ nest was stirred when a nondescript self-claimed Bitcoiner, Nick Payton claimed that Ethereum and Proof-of-Stake blockchains are securities since you can vote to change their properties.
Somewhat similar claims were made by CEO of MicroStrategy, Michael Saylor who also labeled Ethereum and Proof-of-Stake blockchains as securities.
Labeling Proof-Of-Work proponents and their viewpoint as “bare-faced lies”, Vitalik Buterin came down heavily on Payton’s comments.
Is Ethereum A Security Or Commodity?
The question of the nature of crypto tokens is as old as the evolution of Crypto. The proponents of the above viewpoint also have staunch advocates and the latest is SEC chair Gary Gensler who opined that Bitcoin is the only cryptocurrency that can be labeled as a commodity. In another interview with a crypto daily, Altcoin Daily, Michael Saylor said that he believes Bitcoin is the only cryptocurrency while Ethereum is a security.
Saylor argued that Ethereum can only be security and stated that it was issued by an ICO, has a management team, and has a hard-fork. He also labeled Ethereum’s long-delayed difficulty bomb as its nemesis which will bring the Ethereum mining industry to its end.
Vitalik Buterin Strongly Defends PoS
Vitalik Buterin strongly refuted that PoS includes voting on protocol parameters and said that it is a blatant lie. According to him, in PoS, nodes simply reject invalid blocks similar to PoW. Vitalik also pointed to the old Bitcoin Unlimited philosophy and argued that PoW also allows voting rights on several issues.
Experts link Buterin’s passionate defense of Proof-of-Stake to the upcoming Ethereum Merge which will shift Ethereum’s consensus mechanism from Proof-Of-Work to Proof-Of-Stake. The forthcoming merge is touted to reduce Ethereum’s energy use by more than 99%, while also increasing scalability and reducing gas usage.