Censorship & State Capture with Nic Carter & Lane Rettig - WBD575

Nic Carter is a Partner at Castle Island Ventures & Lane
Rettig is a core developer for Spacemesh. In this interview, we
discuss the Ethereum merge specifically addressing the issue
around increasing censorship of Ethereum transactions, the
chilling state attacks on privacy and what Bitcoiners could
learn.


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In November 2013 Vitalik Buterin produced the Ethereum White
Paper, which set out that Ethereum was to utilise the Proof of
Work mechanism to facilitate participation in the transaction
validation process. Eight months later, hidden away in the
announcement about the Ether ICO, Vitalik stated that “We may
choose later on to adopt alternative consensus strategies, such
as hybrid proof of stake…”.


Ethereum’s merge in the first 2 weeks of September has been the
biggest event in crypto this year. Part of the reason is that it
has been a very long time coming. Further, it has been a huge
engineering challenge: transitioning from Proof of Work to Proof
of Stake in a live blockchain for the second-largest digital
currency. Many predicted that it would result in technical
issues. They were wrong. The merge was a success.


And yet, in the months that have followed, events have shown that
just as Ethereum has sought to resolve some issues, it has caused
others. Yes, Ethereum now uses significantly less energy, albeit
a smaller drop in energy consumption than they would have many
believe. But, evidence of a concerning concentration of staked
ETH indicates that not only is the consensus becoming
centralised, but it is becoming dominated by entities who are
censoring transactions.


The result is a very clear distinction between Bitcoin and
Ethereum. The issue at hand for Bitcoiners is that the battle to
win the argument with political decision-makers over the
importance of Bitcoin’s energy usage is still yet to be won. But,
more importantly, there are downstream centralisation and capture
risks for Bitcoin. Forewarned is forearmed.