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Ethereum Users Troubled Over Protocol Level Censorship As PoS Transition Nears

The fact that the second-largest cryptocurrency is about to make a crucial operational change is hardly breaking news. It’s almost time for Ethereum to switch from the Proof-of-Work (PoW) consensus protocol to the Proof-of-Stake (PoS) consensus protocol. 

As the September Merge date approaches, so does the concern of the Ethereum community. However, users are now concerned about the possibility of censorship taking place at the protocol stage of the transition. 

Put another way, blacklisted wallets, even if they interact directly with smart contracts, could not be able to transact at the base layer of the network.

Crypto Community Frets Over the Upcoming Merge Event

Despite the excitement in the crypto community over the upcoming transition, concerns exist over the chain’s future. This is because the protocol-level censorship will likely hinder the network’s growth after the merge. 

Tornado Cash is the perfect example of what to expect on the privately managed crypto mixing platform. After the U.S. Treasury Office of Foreign Assets Control sanctioned and blocked Tornado Cash, Ethereum is now being scrutinized. 

Most crypto communities wonder if the network has the resistance character to withstand a possible knock from the regulator.

Meanwhile, Gabriel Shapiro of Delphi Digitals is confident that the validators at Ethereum will try to implement measures to prevent censorship at the protocol stage. Doing this would allow the network to operate by the rules and avoid being penalized. 

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However, Shapiro noted that entities are handicapped as they cannot prevent facilitating block transactions that the United States sanctions. Still, under certain conditions, they might be able to slash their tendency.

Another exciting thing to consider is that some believe that PoW consensus algorithms are best suited to deal with regulatory requirements. This is because PoW can offer anonymous transactions as PoS struggles to stake assets on several chains.

Differing Opinions

Amid the argument about how prepared PoS assets are against censorship attacks from regulators, people like Justin Bons agree. According to Justin Bond, founder of Cybercapital, a confrontation with regulators would be challenging to pull off on assets like Bitcoin and Ethereum. However, PoW-based networks are more prone to censorship attacks than PoS chains due to their complexity and physical presence. The reason is that PoS tools have a low energy consumption rate and can operate anywhere in the world more quickly than their PoW counterparts. 

Bons noted that wherever PoW consensus is being used, governments have more often applied stringent rules due to the energy-intensive operation of the protocol. And most crypto entities have realized that the future is a PoS-based consensus algorithm for the industry’s sustainability.

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Commenting on regulators’ frequent crackdown on crypto exchanges, Bons revealed that they are not out to stop using and adopting cryptocurrency. The Cybercapital founder calls for a middle ground in ensuring the neutrality of blockchain networks. Individual privacy protections and corporate adherence to legal requirements are also crucial.


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Shelly Melancon (Switzerland)

Shelly is a cryptocurrency enthusiast from Switzerland, she bought her first crypto in 2015 when it was way less popular then it is today and since 2017 she has been writing about cryptocurrency for online news portals. Shelly is the newest addition to the Tokenhell team, she writes mostly news and reviews related articles , stay tuned to her posts to stay up to date with the crypto world.

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