The imminent consensus change that ethereum, the second-largest cryptocurrency by market capitalization, is scheduled to implement in September has many users concerned about the possibility of censorship at the protocol level.This means that blacklisted addresses cannot trade or operate at the base layer, even by directly interacting with the smart contract.
Incoming merger event raises concerns in crypto circles
merge, Ethereum’s migration from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus algorithm has raised concerns about the future of censorship chains. Ethereum’s privacy and censorship-resistant features have been in the spotlight after the privacy-focused hybrid protocol Tornado Cash’s smart contract addresses were approved and blacklisted by the U.S. Treasury Department’s Office of Foreign Assets Control.
Gabriel Shapiro, General Counsel, Delphi Digital, Believe Ethereum’s large validators will try to push for measures that elevate censorship to the protocol level. This will allow them to operate by the rules and avoid penalties for not including illegal transactions. On the subject, he said these entities “cannot save themselves by simply avoiding facilitating blocks containing U.S.-approved transactions, as in some cases they may be slashed to do so.”
On the other hand, Discusfish, co-founder of Ethereum and Bitcoin mining pool operator F2pool, said that proof-of-work (PoW) consensus assets are more capable of handling regulatory pressure than their proof-of-stake-based counterparts.he explain:
In these days of discussions on PoS and PoW under regulatory pressure, there is a key point to pay attention to: whether block producers can remain anonymous and package some consensus-compliant transactions on-chain (which may contain some sensitive transactions) . PoW can currently be done, PoS currently has certain difficulties due to the need to pledge assets on the chain.
However, not everyone shares this line of thinking. In fact, some argue that assets based on proof-of-stake consensus, such as Ethereum after The Merge, are better able to withstand censorship attacks from government regulators. Justin Bons, founder and CIO of Cybercapital, is one of them.
Bons believes that while attacks of this nature are difficult to launch against Bitcoin and Ethereum, the complexity and physical presence that PoW-based chains need to operate would make them easier to target than proof-of-stake assets. This is because PoS can operate anywhere in the world with low-power devices.
Finally, Bunce Believe Regulators have yet to harm cryptocurrencies and “must find a sane middle ground to preserve the trusted neutrality of blockchain, ensuring individual privacy and corporate compliance.”
What do you think about the possibility of Ethereum censorship at the protocol level? Let us know in the comments section below.
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