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Vitalik Buterin Is “Surprised” at $BTC, & What Does He Think About $BTC And USD?

There are a lot of eyes on @VitalikButerin surrounding the upcoming Merge, & the implications of ETH PoS.

But what does he think about BTC , & PoW?

Read our notes on @Noahpinion interview w/ Vitalik to find out! 👇

1/ About the Crypto Market Crash

•Surprised the markets didn’t crash sooner. •Crypto bubbles last ~ 6-9 months. •People are reading too much into what is ultimately cyclical dynamics that crypto has always had.

2/ •When prices are rising, people claim that it’s the new paradigm & the future, & when prices are falling, people say that it’s doomed & fundamentally flawed.

•Bear markets are important to flush out unsustainable business models.

3/ Diminishing BTC Returns & Volatility in Crypto

@Noahpinion mentions the pattern of progressively decreasing BTC returns in every cycle, & asked @VitalikButerin if eventually w/ enough adoption, will we reach a stage where the returns fall to the level of gold?

4/ •Mid term, crypto will settle down & only be about as volatile as gold or the stock market. •At what value will cryptocurrencies settle down at, i.e. what is the fair value?

5/ In previous cycles the concern was whether crypto would exist, today the concern is over whether it will see mass adoption or not.

6/ Is BTC’s Price Positively Related to the Hashrate?

•Irrespective of the total mining hashpower, the network is designed to emit 6.25 BTC per block. •Vitalik disagrees w/ the notion that mining supports BTC’s value.

7/ Security Concerns W/ PoW

•How much security can a network buy for every dollar spent? •If a network is less secure, it can print more coins & raise the security, but at the cost of efficiency. •PoS can buy 20x more security than PoW at the same price.

8/ •Security of a network depends on just the entry costs, as that's what an attacker has to pay to attack. •In PoW, you can only respond to an attack by changing the algorithm, which burns all existing mining hardware .

9/ •In PoS you can have the protocol burn the assets of only the attacker, so the attacker pays a lot but the ecosystem quickly recovers. •Fees from BTC network generates as they haven’t grown much in recent years & the network will come to rely on transaction fees.

10/ Comparing PoS & PoW

•The strongest pro PoW argument is the costless simulation issue (read more below).

•However, this is solved in a PoS system by adding a weak subjectivity period.

Nothing at Stake / Costless Simulation - Blockchain AcademyNothing at Stake / Costless Simulation - Blockchain Academy

11/ • BTC purists reject this solution, as they believe that you should need nothing but the protocol rules. That won’t work w/ a network that needs to push software updates & fix bugs. • @VitalikButerin believes this kind of attack is improbable.

12/ •Doesn’t agree to the argument that PoS allows big stakers to control the network. •PoS & PoW are consensus mechanisms, not governance mechanisms.

13/ •Similar to how in a PoW network, the miners don’t have much say in the governance of the network, in a PoS network, there are other participants than validators / stakers. •PoS has centralized pressure: BTC mining is heavily controlled by a few institutional mining pools.

14/ How Decentralized Governance Should Work

•Popularized coin-driven governance is broken; we need to move towards something less financialized. •Coin-driven governance favors the wealthy. •Coin holders can be easily bribed to act in a particular manner.

15/ • @VitalikButerin suggests implementing some sort of multi-stakeholder governance that tries to represent people & not just coins.

16/ Crypto Startup Societies

@Noahpinion mentions @VitalikButerin review of @balajis

"The Network State"

●Network states haven’t emerged yet because of fundamental differences between a blockchain network & a startup society.

What do I think about network states?What do I think about network states?

17/ ●Maintaining & running a blockchain network doesn’t require a lot of work, unlike startup ecosystem which promotes hustle. ●Web3 / Crypto contributors often are idealists. Taking a Back Seat

18/ ● @VitalikButerin wants his influence to slowly decrease, many great minds in the ETH community who need to be heard. ●A lot of important work is being successfully delegated to others. •Public will eventually listen to all the ETH builders, not just Vitalik.

19/ What Excites @VitalikButerin These Days?

•The Merge! •The idea of an ecosystem coming together. •The recent rapid progress in biotech & AI.

20/ Found this thread useful?

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The Daily Bolt by Revelo IntelThe Daily Bolt by Revelo Intel

21/ Check out the @Noahpinion original interview transcript here! 👇

Interview: Vitalik Buterin, creator of EthereumInterview: Vitalik Buterin, creator of Ethereum
This post is based on this twitter thread.


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