BT Daily News: Ethereum Co-Founder Vitalik Buterin Discusses Bitcoin’s Long-Term Security
1. Ethereum Co-Founder Vitalik Buterin Discusses Bitcoin’s Long-Term Security
Ethereum’s co-founder Vitalik Buterin recently did an interview with the economics author Noah Smith and Buterin had a lot to say about the current state of crypto. Smith first asked Buterin about his thoughts about the recent crypto crash and Buterin said he thought that it would have crashed sooner.
“I was surprised that the crash did not happen earlier,” Buterin said during the interview. “Normally crypto bubbles last around 6-9 months after surpassing the previous top, after which the rapid drop comes pretty quickly. This time, the bull market lasted nearly one and a half years,” the developer added.
Buterin also talked a great deal about the Bitcoin (BTC) network and The Merge, Ethereum’s highly anticipated transition from proof-of-work (PoW) to proof-of-stake (PoS). He claims Bitcoin is not cutting it when it comes to fee revenue from block subsidies.
“In the long term, Bitcoin security is going to come entirely from fees, and Bitcoin is just not succeeding at getting the level of fee revenue required to secure what could be a multi-trillion-dollar system,” Buterin said.
Buterin understands that Bitcoin won’t change its consensus mechanism, at least for now, but if the chain was attacked, he believes the discussion of a hybrid PoS algorithm could come into play.
2. US Inflation Data Could Test Bitcoin’s RallyBitcoin (BTC), the largest crypto asset by market capitalization, was trading at $22,153 at press time, its highest price since mid-August.
“It may take some time for inflation to return back to the Fed’s target, but even a moderation from the current torrid pace should be very good for overall consumer sentiment,” said Brendan Murphy, head of global fixed Income, North America, at Insight Investment.
“The Fed has spent most of 2022 coming to grips with the implications of higher prices and committing to tighten monetary policy as much as needed to ensure those price increases return to target. This means higher rates and tighter financial conditions until inflation is under control,” Murphy said.
Even though the Fed is convinced that a “soft landing” is still possible, the research concluded that "a painful and prolonged increase in unemployment" is inevitable to tame inflation.
From a technical standpoint, the recent rally in bitcoin might not last very long.
3. Ethereum Proof-of-Work Fork Timing PostedEthereum's proof-of-work fork will occur 24 hours following the Merge, according to a thread posted Monday on the @EthereumPoW Twitter feed.
The thread did not specify a precise time, saying this information would "be announced 1 hour before launch with a countdown timer." The Merge is expected to take place on Thursday.
"...Everything including final code, binaries, config files, nodes info, RPC, explorer, etc. will be made public when the time’s up," the thread said.
The ETHW mainnet will begin at "the block height of the Merge block 'plus' 2048 empty blocks" to ensure that the chainID converts to 10001 and that "the chain is the longest...of ETHW.
Merge block +2049 will be the first to note any transactions on ETHW. "Block rewards for the empty blocks will be directed to the 1559 multi-sig wallet," the thread said.
The Merge is a technological overhaul of the Ethereum blockchain that will shift its protocol from proof-of-work to proof-of-stake. Merge advocates say the change will make the blockchain faster and more energy efficient.
4. Bitcoin might be down but interest in crypto and NFTs is here to stay: Ledger CEOThe future for crypto remains very bright. That’s according to the CEO of Ledger, Pascal Gauthier who sat down for a tête-à-tête with Cointelegraph in his home country, France. Gauthier, who enters his eighth year working at Ledger, explained that the recent downward price action in Bitcoin has not brought interest in crypto to a standstill:
“Bitcoin might be down, but people are buying NFTs and you know, they're participating in communities.”
In response to the crypto contagion, in which Hodlonaut, Zipmex, Vauld, and countless other exchanges experienced difficulty managing—or went as far as freezing–customers’ funds, Gauthier said Ledger’s sales are “Way up.” Gauthier lamented that the increase in sales is bittersweet as people have to learn “The hard way.” During the interview, he gave a stark warning about the importance of holding one's keys.
On a lighter note, however, Gauthier is optimistic and hopeful for the future of crypto. From the Metaverse to crypto gaming to more participation in Web3 technology, Gauthier admitted that it’s early days for the space but a lot of things in the future make him go “Wow!”
5. Could Japanese Regulatory Change Provide New Boost for Crypto?The Financial Services Agency (the nation’s top financial regulator) has released a new series of financial administration policy recommendations. The document makes multiple mentions of crypto-related matters.
The new recommendations speak of crypto in a much more positive tone than has recently been the case. The agency claims that in order to help usher in a “digital society,” it will “promote the development of an environment” where “digital money and cryptocurrency” can thrive “in order to promote the development of Web3 and the metaverse from a financial perspective.”
The agency wants to classify stablecoins into two legally recognized categories – namely “digital money-like” coins and “cryptoasset-like” tokens.
The first category, the agency wrote, would refer to tokens issued by banks and similar companies. Furthermore, the agency wrote of the need to create a “private trading system” for security tokens – with many Japanese firms eager to launch trading platforms for these coins.
With rules governing the range of tokens listed on crypto exchanges now also being relaxed, the stage may well be set for a Japanese crypto revival.