The Merge, Ethereum’s migration from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus algorithm has raised concerns about the future of the chain when it comes to censorship, reports Bitcoin.com. After the addresses of the smart contracts of Tornado Cash, a privacy-cantered mixing protocol, were sanctioned and blacklisted by the US Treasury’s Office of Foreign Assets Control, the privacy and censorship-resistant character of Ethereum has been in the spotlight.
Gabriel Shapiro, the general counsellor at Delphi Digital, believes that big validators of Ethereum will try to push for a measure that brings censorship to a protocol level. This would allow them to operate in compliance with rules, and also avoid being penalized for not including illegal transactions. About this issue, he stated these entities “can’t self-help by merely avoiding facilitation of blocks containing US-sanctioned transactions, because under certain conditions they might be dramatically slashed from doing so.”
On the other hand, Discusfish, co-founder of F2pool, an ethereum and bitcoin mining pool operation, stated that proof-of-work (PoW) consensus assets were more capable to deal with regulatory pressure than their proof-of-stake-based counterparts.
“In the discussion about PoS and PoW under regulatory pressure these days, there is one key point to pay attention to: Whether the block producer can remain anonymous and package some transactions that conform to the consensus on the chain (which may contain some sensitive transactions). PoW can currently do it, PoS currently has certain difficulties because of the need to stake the assets on the chain,” said Shapiro.