It should be noted that some experts have welcomed the transition of Etherium to PoS. The fact is that this update will significantly reduce the amount of ETH being issued. We clarified the latest information: 8,562 ETH have appeared on the blockchain since the implementation of the Proof-of-Stake consensus algorithm.

Increase in the supply of ethers since the blockchain moved to PoS

And if the network was still running on PoW, the cryptocurrency supply increased by 175 thousand ETH over the same period.

Possible increase in the supply of ethers since the blockchain migrated to PoS if it had continued to run on PoW

On top of that, the upgrade has significantly reduced the amount of energy the network consumes, reducing it by more than 99 percent. And the environmental component is usually valued by investors.

The main disadvantages of the Proof-of-Stake algorithm

To recap, PoS is an alternative to the Proof-of-Work (PoW) consensus algorithm, which, for example, powers the Bitcoin network. In PoW, the confirmation of transactions and the search for new blocks is done by solving a mathematical problem by the miners’ devices. In PoS, on the other hand, the cryptocurrency network is maintained by validators, which contribute a certain amount of coins to the stack – 32 ETH in the case of Etherium. This way they guarantee the integrity of their intentions, because possible problems for the blockchain will surely end up with a drop in the value of ETH, which is definitely not in the interest of the holders of the stack.

However, not everyone has 32 ETH, which is about $42,000 at the current exchange rate. If you don’t have the necessary amount, you can also participate in steaking, but through centralized exchanges and cryptoplatforms. According to IMF analysts, the significant concentration of ETH in staking through such centralised platforms creates its own risks – for example, active government action against a single exchange with a large stake in staking could undermine the decentralisation of the Etherium network.


Note that a similar scenario was previously commented on by Brian Armstrong, head of cryptocurrency exchange Coinbase, which also allows ETH to be staked. He suggested that in the event of a claim from the authorities, the company would try to simply shut down the service without harming the blockchain. A lawsuit is also a possibility in theory.


Share of different centralised resources in the stacking of Etherium

PoW also has its own problems. This algorithm requires miners to constantly increase the capacity of their equipment to maintain profitability. Consequently, their energy consumption is increasing, which goes against the “global goal of transitioning to a low-carbon economy” designed to minimize the amount of greenhouse gas emissions into the environment.


Yesterday we learned that ASIC miners for Bitcoin mining are using more and more natural gas and nuclear power. Read more about this in a separate article.


Bitcoin network energy consumption

According to Decrypt’s sources, the document also states that regulators should take a “technology neutral approach”. They should also “consider the implications of different forms of innovation” as “some types of consensus mechanisms that underpin blockchain can inherently create tensions” with more global policy goals and mandates.

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Regulators must make important financial innovation decisions regarding not only the crypto market, but also central bank digital currencies (CBDCs). As the name implies, they should be developed and supported by the world’s central banks, not by individual independent development teams. In essence, CBDC is an electronic version of the national currency under the full control of the Central Bank, reports Cointelegraph.

The U.S. government should abandon the concept of CBDC in favor of Bitcoin and stablcoin – this opinion was expressed yesterday by representatives of Bitcoin Policy Institute, a nonprofit organization that researches the political and social implications of Bitcoin. Texas Bitcoin Foundation executive director Natalie Smolenski and former Kraken development chief Dan Held argue that CBDCs will rob the public of financial control, privacy and freedom.

Bitcoin versus the dollar

In their view, CBDCs will “give governments direct access to every transaction made by anyone anywhere in the world”. This information could appear in leaks, as government infrastructure is often subject to cyber-attacks by hackers. Here is a pertinent quote in this regard.

As a direct obligation of central banks, CBDCs are becoming the new vanguard for imposing monetary policy directly on consumers. Such policies include negative credit rates, savings penalties, tax hikes and currency confiscation.

Cryptocurrency trader

The creation and support of CBDC is in some ways an “imitation” of the ubiquitous population control that the Chinese government is now resorting to, experts say.

As the world goes the way of China in the 21st century, the United States must advocate something different. For most people, a combination of physical cash, Bitcoin, digital dollars and well-stocked Stablecoins will cover almost all cash use requests.

Note that CBDC projects are still either only in bankers’ theories or still undergoing initial tests. Before the release of such a full-fledged system in the U.S. may take many years, if it ever takes place. In addition, earlier US Federal Reserve Chairman Jerome Powell said that the government would not yet issue a digital dollar and is only analyzing the implications of such a move.


We believe that the concentration of large volumes of ether on a small number of addresses is indeed relevant to this blockchain. At the same time, a similar problem is inherent in other cryptocurrencies as well as Bitcoin, given the small number of ASIC miners to support the network and the mining pools. Accordingly, almost every project can be criticised in theory here. It is important not to forget, that fiat money has not less disadvantages - the current inflation in the world proves that.


What do you think about it? Share your opinion in our Millionaire Crypto Chat. There we talk about other important topics from the blockchain world.