Thread by @blue_collarbtc

A 🧵 about the sodomization of
#Ethereum and why #Bitcoiners should care.

#Ethereum is about to F*ck up in a MAJOR way.

In the book Art of War, there is a quote that seems to fit this scenario perfectly.

“Never interrupt your enemy when he is about to make a mistake.”

#Eth is about to move from POW to POS (proof of stake).

As the primary “competitor” to #btc should just let them continue?

Let’s first explain what POW and POS are and how they work.

Proof of work and proof of stake are consensus protocols.

These construct the basis of how a blockchain verifies trust in their respective systems.

Proof of work is a blending of digital and real world resources. You MUST expend real world resources (electricity) to solve a problem and then you can PROVE to the network that you expended energy to win the block reward. This is a system that gives no benefit to any entity

Anyone can plug in at anytime and has the ability to compete.

Additionally, POW systems are not censorable. You can be an anonymous miner, you can plug in and reap the rewards without permission. From ANYONE.

Proof of Stake works differently. POS is an entirely digital mechanism that requires very little energy compared to POW. This would seem to be a huge benefit.

Proof of Stake requires you to “stake” or lock up coins in someone else’s custody. You receive a “mining” reward …

Or interest payment for locking up your coins and “staking the system”

Your reward is greater with more coins locked in stake. You also have a “vote” for how the protocol develops in the future.

So far this may not sound like a big deal and may sound good considering energy

Savings. But…..

Because running a node on #Etherum is incredibly technically challenging, (also need 32 ETH) the staking pools are very centralized, and they REQUIRE custody of your coins.

4 entities control 60.2% of the total #eth staked

So these centralized entities not only have control of “your” ETH. They also get to make the decisions about protocol rules in the future.

Keep in mind these are regulated companies. They will bend the knee to government order. They are compelled to.

It is not a stretch to assume then, that when the government doesn’t like a particular transaction, they will lean heavily in these entities and ETH will be censorable. These govs will also have indirect influence on the trajectory of future changes in ETH.

Sound familiar? This is the new system being co-opted by the old system.

The entire POINT of decentralized systems is to REMOVE human dictate wherever possible bc it ALWAYS LEADS TO THE CANTILLON EFFECT. Those with the most money make the rules.

Now, I can hear you thinking F*ck em. We agree

But…. This may be more insidious than we realize.

If I wanted to destroy #btc, or at least cripple it for a prolonged period of time, If I was smart I would realize I can’t stop it.

I would realize if I can control..

A competitor, I could boost it and allow it to proliferate while behind the scenes changing rules that allow full ultimate control of its long term dynamics and rules.

Most people don’t have an ideological bent, they just want to get rich.

Getting rich > Freedom

So shaping legislation and catering to this alternative controlled protocol would benefit it allowing NGU to snowball and making people rich.

#Bitcoin could look less attractive if it’s not competing on overall return to most people in this scenario.

This is certainly not a prediction, just the musings of a firefighter thinking through some of the implications of a co-opted #eth and why the people involved would be proponents of it.

As usual, it’s about making money.

#Bitcoin is about freedom, capitalism, rule of law, and human flourishing.

It is a shining beacon in a world that desperately needs rules not rulers.

Watching #eth become captured by the state should not be something we want.

We want free markets without interference.

Let the best protocol win. Ultimately, we believe #Btc prevails because it offers the most beneficial system to humanity in history.

Attacks will be many, from outside and within.

#ETH will become yet another fiat system, and it will ultimately fail because of it.

We would not be surprised if it does benefit in the short term.

#eth is aligning itself with the system it was created to replace.

Thank you @_Checkmatey_ for this superb video that influenced this thread👇