One Misconception and Severe Design Flaw of the Ethereum Merge. Integration is close, and there are some misconceptions about it that even the wonderfully written questions on the dedicated page can’t answer. Understanding the new reality is paramount, especially as you prepare for its emergence. That said, I often find people overlooking or misunderstanding very important concepts that are inseparable from integration. Considering the immense importance of Ethereum (ETH) becoming a Proof-of-Stake (PoS) blockchain and the impact it will have on the crypto economy (which I have discussed elsewhere), I think Many people can’t afford to ignore it. those things.
There are no 400,000 validators
As we get closer to the merge in Ethereum, I’m hearing a fairly repeated narrative about the 400,000 validators after going full PoS because of the alleged minimum of 32 ETH (USD 49,500). There are many owners, which is the minimum share size. But this is wrong. Moreover, anyone will be able to run a node without ETH. As the CEO of a company that makes its living by validating on over 50 different blockchains, I can see thousands of people launching nodes, but I see them all ensuring almost 100% uptime. can’t see Soon many of them will burn their fingers from slashing, lose their money, and eventually become completely disillusioned or financially incapable of starting over.
One Misconception and Severe Design Flaw of the Ethereum Merge. This means that Ethereum’s PoS incarnation won’t have nearly as many validators as some expect. Moreover, I don’t expect the number of nodes to be significant enough to satisfy those serious about decentralization. But, of course, there would be more node operators than Proof of Work (PoW) could ever support. These efforts are at risk of being eclipsed by a more ominous presence: major centralized exchanges as authenticators.
Exchanges as validators are a flaw
Still, Binance, Coinbase, and Kraken hold more than 32% of the ETH at stake. With Ethereum switching to PoS, the exchange risk will only increase. The fact that exchanges can participate in validation is a personal pain in the butt. This is a serious design flaw that I don’t even know how to fix. Maybe some plan will be resolved someday, but for now, it seems unlikely. Validators in PoS are trusted because acting against the interests of the network will cost them a lot of money, and they know it. This encourages them to work diligently and, for example, maintain 100% uptime.
One Misconception and Severe Design Flaw of the Ethereum Merge. But exchanges don’t use their funds to make bets. They just push their customers’ money there and make profits that they sometimes don’t even disclose. If they act against the interests of the network, they will not lose anything, unlike their users, whose tokens may be depreciated due to the unethical actions of the exchange. Exchanges are big enough to damage the entire ecosystem and get away with it. And knowing the influence and scale of Ethereum, this will become a huge problem when the merger happens.
The most important concept, though, is hardly surprising: we’re all people, and we drag our human flaws into even perfect technologies. As long as some fight for power for power’s sake and others chase quick money without a thought for the importance of technological progress, politics will always exist, even in crypto. And I fear that integration will allow more such people into the realm where they can affect the ecosystem. Of course, there is no reason to fear self-integration. Its importance to technology and the very evolution of crypto is hard to understate.