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With the introduction of PoS, ETH is becoming more and more centralized rather than becoming decentralized. Exchanges like Binance and people like CZ are always willing to control the market and exert huge centralization over the crypto community and this was possibly true when he was willing to do a 51% attack by bribing miners and reversing the bitcoin chain. Nowadays the primary purpose of any cryptocurrency has become a mere speculation, so obviously ETH would shoot up in price if there are more proper developments taking over but on the other hand if there are worse speculations going over and in the process we would be suffering from a bear market. This is why a mineable PoW and ASIC resistant currency like Monero would offer an excellent decentralization while comparing to Bitcoin or a PoS coin like Ethereum.
Ethereum Classic is more or less an useless mineable currency, i.e they are only used for mining and are suffering severe 51% attacks now and then. So probably ETC is geared more towards making money by offering a better mining solution rather than any use cases. ETC becoming decentralized would never make the coin superior to ETH atleast in terms of making profits as ETH provides one among the best platforms on the decentralized web to deploy contracts. This could never be achieved by a centralized chain like BSC but there are still quite a few possibilities DOT might be looking as the future ETH with more scalability and thereby providing similar use cases of ETH.
A mere $5k per coin would place the total valuation of Ethereum at $500 billion, but there are centralized chains like BSC which offers better scalability in deploying contracts so possibly there could be stiff competition for ETH in terms of hitting $5k price.
Ethereum Classic is more or less an useless mineable currency, i.e they are only used for mining and are suffering severe 51% attacks now and then. So probably ETC is geared more towards making money by offering a better mining solution rather than any use cases. ETC becoming decentralized would never make the coin superior to ETH atleast in terms of making profits as ETH provides one among the best platforms on the decentralized web to deploy contracts. This could never be achieved by a centralized chain like BSC but there are still quite a few possibilities DOT might be looking as the future ETH with more scalability and thereby providing similar use cases of ETH.
A mere $5k per coin would place the total valuation of Ethereum at $500 billion, but there are centralized chains like BSC which offers better scalability in deploying contracts so possibly there could be stiff competition for ETH in terms of hitting $5k price.
Exactly. The concentration of ETH's supply among a few stakers (validators) should be a real concern for those supporting the decentralization of Blockchain technology. It seems to me that ETH devs only care about convenience than true decentralization. It's always been about the money, instead of making crypto/Blockchain land a better place. Once ETH becomes a full-fledged PoS cryptocurrency, big exchanges will dominate the Blockchain. I believe that ETH miners will migrate into ETC, making the latter blockchain network bigger and stronger than ever. One thing for sure, is that ETC has been a victim of constant 51% attacks over time. It's hoped that with the ETH 2.0 upgrade, this will no longer become an issue.
Nonetheless, I believe that staking ETH yourself will only be good for making short term profits than anything else. Don't expect to take ETH seriously as the network will become less decentralized over time. ETH will remain actively traded on the market as long as people keep pouring money into it. If you care about decentralization, then I'd suggest you look elsewhere. Mining ETC or even Bitcoin itself might be a better option than staking centralized coins. Just my opinion
As I understand it, and correct me if I am wrong a these points.
- 1. Right now the only smart move if you looking to be a ETH 2. staker (validator) is spinning up a VPS with companies like Amazon/Google/Azure. You are going to want at least 4 9's possibly 5 of reliability and uptime. Because if your down, your penalized.
2. You can't get out right now if want to (phase 0) until phase (1.5) sometime between now and 2022/23? Which means if ethereum is tanking between now and then you lose, on the flip side if ethereum jumps to 4K you can't liquidate either. And you have ask to withdraw (stop validating) so if a number of validators want out, they could be blocked for a period of time.
3. Penalties are severe for inability to participate as a validator in the network. No exceptions give in their documentation for natural disasters (hurricane or earthquake for example) or man made (damage infrastructure due to human involvement). In theory (honestly that is all we have now is theory) a validator could lose their entire stake if a majority of the network decides to take it. It doesn't matter the reason. If a majority agrees your out, your out.
Finally it looks like Ethereum 2.0 will devolve to a few validators (couple of hundred or less) as they purge their numbers over time and via the normal acts of transactions accumulate enough of ethereum in their bank to represent a majority of the vote (which is based upon how much ethereum you have). Note the highlight line from their FAQ. Tell me that isn't an incentive for a bad actor(s) to try and manipulate ETH 2.0 to get 51% of the vote and evict validators and take their stake in the process.
https://launchpad.ethereum.org/faq
What exactly is a validator?
A validator is an entity that participates in the consensus of the Ethereum 2.0 protocol.
Or in plain english, a human running a computer process.
This process proposes and vouches for new blocks to be added to the blockchain.
In other words, you can think of a validator as a voter for new blocks.The more votes a block gets, the more likely it is to be added to the chain.
Importantly, a validator’s vote is weighted by the amount it has at stake.
{I'm all in favour of ETH staking, so I'm very biased.}
I'm aware that there is an alarming degree of centralization at the moment, but it's still the 'least' decentralized, man-made option (besides BTC of course), and POS should even out the playing field even more. Let me explain.
The centralized exchanges/ providers are the easier option today, and therefore attracts many people into the wrong places, rendering it (alas temporarily) more centralized than anticipated.
But just like DEFI and DEXs took a long time to 'get it right' - so will staking providers and solutions. Today Uniswap or Compound are just as big / impressive as centralized solutions.
At the end of the day, providers (just like ourselves) will be able to put up a real fight against the Binances of the world.
There are a lot of recent developments, scheduled to happen around the upcoming 'merge' that will help make staking 'truly' decentralized.
I wrote down an example about it today: https://bitcointalk.org/index.php?topic=5349381.msg57465896#msg57465896 (again slight shill)
In terms of rewards and APR, keep im mind that after the merge, not sure for how long, we should expect significantly higher rewards.
https://www.reddit.com/r/ethstaker/comments/muepnz/eth_20_validator_152_apr_after_the_merge/
