Will exchanges control ETH after it becomes a PoS cryptocurrency?

[Abiky]

I've been saying this for a long time now, and I will say it again. PoS will make ETH more centralized as whales and other big players in the industry will be able to participate in the network with their stake. Considering that exchanges hold most of a Blockchain network's cryptocurrency supply, changing to PoS will leave the average person out of the system for good. Of course, people will still be able to stake less than 32 ETH through staking pools. But it won't be the same as becoming a validator yourself (you won't participate in the network's consensus by staking your coins in a staking pool). A better approach for ETH would've been a hybrid PoW + PoS consensus algorithm. That way, everyone will have a final say over what new rules or decisions are made in the network. I guess Vitalik doesn't care about decentralization after all.

Do you think big exchanges like Binance, FTX, and Huobi will be able to control ETH after it becomes a full-fledged cryptocurrency? if not, why? Will there still be hope for ETH after the upgrade is finalized? What will happen if ETH collapses due to centralization? Will it take the whole crypto market down with it? Your input will be greatly appreciated. Thank you.

[hyudien]

I'm not too sure completely, but as we know centralization can make it so easy to play a role in the market, especially on a scale Ethereum clearly has a negative impact on cryptocurrencies. The logic is when the center under the Ethereum network also gets the same impact. This was not the main purpose for which Ethereum was originally created. Then it would make sense that Vitalik vehemently refused. The rest is about centralized exchanges which are much easier to control market movements, to me that would be very unwelcome.

[Abiky]

I'm not too sure completely, but as we know centralization can make it so easy to play a role in the market, especially on a scale Ethereum clearly has a negative impact on cryptocurrencies. The logic is when the center under the Ethereum network also gets the same impact. This was not the main purpose for which Ethereum was originally created. Then it would make sense that Vitalik vehemently refused. The rest is about centralized exchanges which are much easier to control market movements, to me that would be very unwelcome.

Greedy exchanges will want a piece of the pie, by using customers' ETH to guide the Blockchain in their own direction. It will be a conflict of interest, as exchanges will only approve/disapprove certain network upgrades and/or improvements if it benefits them. For what I know, money talks so you can expect such big players to "own" Ethereum at its fullest. We cannot say the same with the current version of Ethereum (which can be mined by anyone with a GPU). Vitalik Buterin has a strong presence in the project, so anything he says will be seen with good eyes by the community. It's unfortunate, since this will lead Ethereum towards full centralization.

At least, we'll have Ethereum Classic to preserve Bitcoin's original purpose (decentralization/censorship-resistance). Who knows if miners from ETH flock to ETC once the PoS merge is completed? Just my thoughts

[vv181]

It will come into how the exchange has its own terms and condition or terms of service, currently, as far as I know there is no exchange that governs what they can or can't do in regard when dealing with staking/ed user funds.

If we look back at the Steem hostile takeover examples whereas big exchange is using users' funds to cast a vote, it indicates that there is no reason exchanges can't do that again in another means for ETH PoS. So that kind of scenario is prone to happen again until some exchanges stated clearly what they should or can do with user funds on their exchanges.

[tvplus006]

...At least, we'll have Ethereum Classic to preserve Bitcoin's original purpose (decentralization/censorship-resistance). Who knows if miners from ETH flock to ETC once the PoS merge is completed?

The released capacities will definitely switch to mining other coins, and today the profit received from mining Ethereum Classic is one of the big ones. An increase in hashrate in the network will necessarily entail an increase in network security and, as a result, an increase in the cost of ETC, which will again attract miners to transfer capacity to this network.

[Dave1]

It will really be bad if Ethereum will have a total collapse because it went to POS and then the big whales such as exchanges have total control over it.

Will be a disaster for Vitalik, his pet project becoming the biggest altcoin and then suddenly because players have control it went crazy downhill. So I doubt that Vitalik or any from the Ethereum devs will allow it, yes it might be as centralized as ever, but for sure it won't be as destructive as once we thought right now, just my 2 sats.

[libert19]

What will happen if ETH collapses due to centralization? Will it take the whole crypto market down with it?

No, only Bitcoin does that, but ethereum based tokens will go down with it.

[$anounimus$]

Centralization is a big issue among crypto enthusiasts and traders, but it seems unlikely that the exchange you mentioned will be able to control ETH after the PoS switch. If anything, I think more exchanges will offer Ethereum-based pairs, which is another good sign for decentralization. I also think that ETH is becoming more valuable and useful as a cryptocurrency with PoS instead. While I don't think ETH will "collapse" or anything like that, it will likely continue to drop from where it is now for quite some time.

The problem with exchange taking over as a stakeholder is that it creates a focal point of failure. If an exchange is hacked and our funds are stolen, there is absolutely nothing we can do about it, as we cannot remove your funds from the exchange once they have been deposited for staking.

[jrrsparkles]

I've been saying this for a long time now, and I will say it again. PoS will make ETH more centralized as whales and other big players in the industry will be able to participate in the network with their stake. Considering that exchanges hold most of a Blockchain network's cryptocurrency supply, changing to PoS will leave the average person out of the system for good. Of course, people will still be able to stake less than 32 ETH through staking pools. But it won't be the same as becoming a validator yourself (you won't participate in the network's consensus by staking your coins in a staking pool). A better approach for ETH would've been a hybrid PoW + PoS consensus algorithm. That way, everyone will have a final say over what new rules or decisions are made in the network. I guess Vitalik doesn't care about decentralization after all.

Do you think big exchanges like Binance, FTX, and Huobi will be able to control ETH after it becomes a full-fledged cryptocurrency? if not, why? Will there still be hope for ETH after the upgrade is finalized? What will happen if ETH collapses due to centralization? Will it take the whole crypto market down with it? Your input will be greatly appreciated. Thank you.

To be honest those big exchanges don't really want to control the ETH, they just want to destroy it because every exchange have their own coins and tokens also encouraging new projects coming up there because of low transaction fee but with ETH becoming PoS there will be a competitor for them and also big whales in charge so this os not going to be that easy to control meanwhile the users just enjoy the decentralized ETH blockchain while the others are completely centralized.

[dimonstration]

This is actually a good point. Knowing how CZ and Sam manipulate the whole crypto market with there own blockchain tokens, This PoS proposal for ETH will make there decentralized nature jeopardise. We knew that CZ and Sam only wants profit to themselves and just like wolf dress in lamb coat.

I really believe this will gonna give huge impact to Ethereum and probably more manipulation to come from these jerks crypto billionaire.

[zasad@]

I've been saying this for a long time now, and I will say it again. PoS will make ETH more centralized as whales and other big players in the industry will be able to participate in the network with their stake. Considering that exchanges hold most of a Blockchain network's cryptocurrency supply, changing to PoS will leave the average person out of the system for good. Of course, people will still be able to stake less than 32 ETH through staking pools. But it won't be the same as becoming a validator yourself (you won't participate in the network's consensus by staking your coins in a staking pool). A better approach for ETH would've been a hybrid PoW + PoS consensus algorithm. That way, everyone will have a final say over what new rules or decisions are made in the network. I guess Vitalik doesn't care about decentralization after all.

Do you think big exchanges like Binance, FTX, and Huobi will be able to control ETH after it becomes a full-fledged cryptocurrency? if not, why? Will there still be hope for ETH after the upgrade is finalized? What will happen if ETH collapses due to centralization? Will it take the whole crypto market down with it? Your input will be greatly appreciated. Thank you.

What will the big Ethereum holders and exchanges do? Do you think they stake their coins and then attack the blockchain?  All major POS coins are centralized, but this does not prevent it from working. Anything can happen in the future, but first we need a new Ethereum price pump.

[MAAManda]

Do you think big exchanges like Binance, FTX, and Huobi will be able to control ETH after it becomes a full-fledged cryptocurrency? if not, why? Will there still be hope for ETH after the upgrade is finalized? What will happen if ETH collapses due to centralization? Will it take the whole crypto market down with it? Your input will be greatly appreciated. Thank you.

I don't regularly follow developments regarding Ethereum moving to Proof-of-Stake (PoS), but do you think Ethereum will become centralized after the consensus change on the network? Besides, if it becomes centralized, will the big exchanges like FTX and Binance be able to control the market? I think, even if it were to become centralized, it would be difficult for big exchanges like Binance and FTX to control it, this is because Ethereum circulation is quite evenly distributed across various exchanges.

[serjent05]

Reading some information on POS from https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/.  Here is their explanation about the security of PoS against 51% attack.

The threat of a 51% attack still exists on proof-of-stake as it does on proof-of-work, but it's even riskier for the attackers. A attacker would need 51% of the staked ETH (about $15,000,000,000 USD). They could then use their own attestations to ensure their preferred fork was the one with the most accumulated attestations. The 'weight' of accumulated attestations is what consensus clients use to determine the correct chain, so this attacker would be able to make their fork the canonical one. However, a strength of proof-of-stake over proof-of-work is that the community has flexibility in mounting a counter-attack. For example, the honest validators could decide to keep building on the minority chain and ignore the attacker's fork while encouraging apps, exchanges, and pools to do the same. They could also decide to forcibly remove the attacker from the network and destroy their staked ether. These are strong economic defenses against a 51% attack.

51% attacks are just one flavor of malicious activity. Bad actors could attempt long-range attacks (although the finality gadget neutralizes this attack vector), short range 'reorgs' (although proposer boosting and attestation deadlines mitigate this), bouncing and balancing attacks (also mitigated by proposer boosting, and these attacks have anyway only been demonstrated under idealized network conditions) or avalanche attacks (neutralized by the fork choice algorithms rule of only considering the latest message).

Overall, proof-of-stake, as it is implemented on Ethereum, has been demonstrated to be more economically secure than proof-of-work.

Take note of the bolded part.  That would be a strong warning to any exchanges wanting to take control of the ETH network.  So I guess exchanges will not try to control ETH when it becomes POS.  

Damn, now I realized how centralized PoS ETH will be.

[Piesel]

Ethereum networks have become vulnerable through the many factors and development that have made Ethereum more centralized, moving from proof of stake to proof of work which many Bitcoin critics use to flag the energy and environmental impact of Bitcoin mining, this has led to many countries banning Bitcoin and so many other anti Bitcoin crusades all over the world.

[Xal0lex]

ETH has been flowing out of exchange wallets into non-custodian wallets for a long time now. Who owns those wallets is anyone's guess, but it's a fact that ETH will become more controlled and centralized. I read in one of many articles about the future of ETH PoS that the value of ETH after the merger will be determined by investors and the community, and most likely the price will grow several times, and in the near future will update ATH. It's not for nothing that the big whales replenish their stocks. Judging by the developers' statements the wait is not long, they plan to merge on September 19.

[sunsilk]

Too early to tell but those are good points to be analyzed because we all do care for the network especially if you're also holding ETH. Well, I guess there's a reason why the merge and shifting has a delay.

There could be an insider debate that's happening behind the foundation and developers and that's why it's getting long before the full implementation on it. And if it's done, I guess they still have power to upgrade and fix necessary things if things have caught and gone bad.

[Ziskinberg]

If that is only the intention of bringing about such network integration and changes, I believe it never succeeds. I don't think it is necessary as for sure the community will not prefer to have that system rather than to remain as decentralized as possible. But can't hide the reality that exchanges now are becoming greedy, whales are doing it too making things have changed and they want ETH to fall into their hands and then controlled it.

What does Ethereum’s POS upgrade mean for Ethereum stakers?
The first phase of the planned upgrade will enact Ethereum’s shift to proof-of-stake (PoS) consensus, which will allow Ether holders to stake ETH. By securing ETH in the blockchain in exchange for block reward payments, ETH stakers can benefit from the annual yield.

I hope this is enough and the benefits spread, not just for the exchanges and whales.

[Jackl87]

I've been saying this for a long time now, and I will say it again. PoS will make ETH more centralized as whales and other big players in the industry will be able to participate in the network with their stake. Considering that exchanges hold most of a Blockchain network's cryptocurrency supply, changing to PoS will leave the average person out of the system for good.
Do you think big exchanges like Binance, FTX, and Huobi will be able to control ETH after it becomes a full-fledged cryptocurrency? if not, why? Will there still be hope for ETH after the upgrade is finalized? What will happen if ETH collapses due to centralization? Will it take the whole crypto market down with it? Your input will be greatly appreciated. Thank you.

I don't think that the switch to PoS will have the negative effects that you have mentioned. I mean at the moment Ethereum is PoW and here the situation is also the same. There are huge mining companies located in China as far as i know that have a lot of hashpower which means they also have a lot of control over the network in that sense. I think that even after the switch to PoS Ethereum will be much more decentralized than most other PoS coins out there because ETH is just so popular and big that a lot of people are actually owning Ethereum and as you already said, eveyone can stake their ETH via pools or something.

[o48o]

I've been saying this for a long time now, and I will say it again. PoS will make ETH more centralized as whales and other big players in the industry will be able to participate in the network with their stake. Considering that exchanges hold most of a Blockchain network's cryptocurrency supply, changing to PoS will leave the average person out of the system for good. Of course, people will still be able to stake less than 32 ETH through staking pools. But it won't be the same as becoming a validator yourself (you won't participate in the network's consensus by staking your coins in a staking pool). A better approach for ETH would've been a hybrid PoW + PoS consensus algorithm. That way, everyone will have a final say over what new rules or decisions are made in the network. I guess Vitalik doesn't care about decentralization after all.

Do you think big exchanges like Binance, FTX, and Huobi will be able to control ETH after it becomes a full-fledged cryptocurrency? if not, why? Will there still be hope for ETH after the upgrade is finalized? What will happen if ETH collapses due to centralization? Will it take the whole crypto market down with it? Your input will be greatly appreciated. Thank you.

You mean like large mining firms currently controlling Ethereum and Bitcoin? I can see absolutely no difference in this. PoW isn't any better system, poor people will still mine with pools. But as you are aware, if binance for example would try to control / attack ETH2.0, they would be done and so would the whole crypto scene for years to come. Also you are aware of slashing in PoS?

Because this all sounds like PoS fud coming from miners.

[Abiky]

The released capacities will definitely switch to mining other coins, and today the profit received from mining Ethereum Classic is one of the big ones. An increase in hashrate in the network will necessarily entail an increase in network security and, as a result, an increase in the cost of ETC, which will again attract miners to transfer capacity to this network.

It's possible ETC will become bigger and stronger than ever after Ethereum goes full PoS. We've yet to see how secure the new Blockchain will be, especially when PoS undermines the network's decentralization. If ETH fails, then ETC will take over as the world's second-largest cryptocurrency by market cap. Things would've been worse if the code wasn't open source for anyone to modify at will. There are rumors that ETH will be switching to PoS by the end of the year, so it's best to be prepared just in case. Just my opinion