CZ on the problems with Ethereum
In a recent interview, Changpeng Zhao (“CZ”), the Co-Founder and CEO of Binance, said that users of the Ethereum network should not have unrealistic expectations regarding the benefits of the Merge upgrade, which was completed on September 15.
In an interview with CNBC just before the Merge, which marked the Ethereum network’s move from proof-of-work (PoW) to proof-of-stake (PoS) consensus, CZ said:
“Many people have very high short-term expectations for the merge, they think Ethereum gas fees will drop from $10 per transaction to $0.02 overnight. That’s most likely not going to happen. It’s a long process.“
However, CZ said that Ethereum was generating “progress in the right direction” in addition to “strong innovation.” He was overall positive on the impact of the upgrade in the long term.
The Merge – “an insane feat”
In a blog post published on Merge Day, Ali Yaha, a General Partner at Silicon Valley based venture capital firm Andreessen Horowitz (“a16z”), called the Merge “an insane feat” since this upgrade “involved hot-swapping the most important component of Ethereum’s architecture – its consensus mechanism – *while it was running*.” Yaha noted that “all this occurred while maintaining perfect uptime for millions of users, thousands of decentralized applications (dapps), and hundreds of billions of dollars secured.”
Yaha then said that were some of the main advantages of Ethereum’s move to PoS consensus:
- “Post-Merge, Ethereum is now 100x+ more energy-efficient than it was before. Participating in consensus no longer expends the enormous amount of electricity that PoW does. After The Merge, energy usage of ETH will be comparable to the datacenters of web2.“
- “PoS has direct access to each validator’s “stake”, the funds, or skin-in-the-game, that validators deposit to secure the network. That allows PoS incentives to be far more granular, further increasing security.“
- “… anyone with 32 ETH can now participate as a validator on Ethereum.“
- “On a PoS blockchain, transactions that go through consensus are final… Transaction finality on Ethereum will lay the groundwork for future work that will improve Ethereum’s ability to scale (via “layer 2” solutions such as rollups), connect to other blockchains (via cross-chain bridges), and build better abstractions for developers that are easier to use and reason about.“