Ethereum Co-Founder: A 'good chance' Ethereum overtakes Bitcoin as biggest cryptocurrency, but centralization concerns remain - Anthony Di Iorio
"There's a good chance, if Ethereum keeps going in the direction it is going, that the Flippening happens," he told Michelle Makori, Editor-in-Chief and Lead Anchor at Kitco News.
However, Di Iorio was concerned with centralization issues following the recent Ethereum Merge, which transitioned the ETH network from a proof-of-work to a proof-of-stake consensus protocol.
"Ethereum has always done, in my opinion, a good job of not sacrificing decentralization," he stated. "But can it be done 100 percent? I'm not sure… I'm concerned with centralization risks of proof-of-stake."
The much-anticipated Ethereum Merge successfully transitioned the network from a proof-of-work to a proof-of-stake consensus algorithm on September 15th.
Among the primary changes to the ecosystem is a 99 percent reduction in energy usage. However, Ethereum's ‘gas fees,' or the amount of Ether paid to conduct a transaction, remain unchanged.
Di Iorio explained that gas fees are likely to come down when "Layer Two" improvements are made "to help with scalability." Layer Two protocols, such as Ethereum's Polygon or Bitcoin's Lightning Network, are built on top of existing blockchains.
Future updates to Ethereum, such as danksharding, are expected to improve Layer Two functionality and reduce gas fees.
"That's really the next big hurdle," said Di Iorio. "The Merge [itself] was strictly about moving from one system to another."
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Proof-of-stake allows cryptocurrency owners to validate block transactions based on their number of staked coins. The Ethereum Merge to proof-of-stake has been controversial among some, who claim that this risks greater centralization of the network, as so-called ‘crypto whales' with large coin holdings stake more of their coins and gain control over validation.
Di Iorio admitted this is a concern, and claimed that "two addresses or something that are accounting for almost 50 percent of all validating that is happening" on the Ethereum network.
The two addresses belong to Lido and Coinbase.
However, Di Iorio pointed to proof-of-work networks, like Bitcoin's, as also having centralization problems.
"Very quickly, it became a situation of [needing] faster equipment," he explained. "It turned into a system where only high technology-focused companies could produce the chips."
Bitcoin mining requires intensive energy and hardware requirements, given the difficultly of the underlying computational problems required to extract Bitcoin.
"It doesn't help when you only have a few and it becomes more centralized," said Di Iorio.
To find out how Di Iorio intends to help further decentralize Bitcoin and Ethereum, watch the video above.
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