BitTorrent Creator Advises Ethereum Developers to Not Switch to Proof-of-Stake

Bram Cohen, an American computer programmer and the author or peer-to-peer (P2P) file sharing protocol and software program BitTorrent, has advised Ethereum’s (ETH) developers to not switch to the proof-of-stake (PoS) consensus protocol.

Cohen also suggested that Ethereum’s development team “separate out state transitions from their justifications” and “drop” sharding - as they work on upgrading the Ethereum blockchain network. In response to Cohen’s recommendations, Twitter user “WallStreet 5” (@Street5Wall) asked Blockstack co-founder Muneeb Ali why his platform couldn’t be deployed on Bitcoin SV, “instead of Ethereum.”

Clarifying that Bitcoin SV, a fork of Bitcoin Cash, is “not designed as a general purpose” platform to launch decentralized applications (dApps), Ali explained that Blockstack is “explicitly designed” to facilitate the development of distributed apps.

Responding to Ali’s comments, Craig Steven Wright, the self-proclaimed inventor of Bitcoin, claimed that Bitcoin (as he envisions it) “is a Turing Complete system.” Wright also argued that Bitcoin is capable of functioning as a dApp deployment platform and it has many other use cases.

SegWit Was "More Of A Bug Fix"

Meanwhile, Twitter user “Critical I.” (@critical_infras) asked if separating state transitions is what SegWit (“Segregated Witness”) did for Bitcoin. According to Cohen:

Sort of. SegWit was more of a bug fix than a change to the model. Yeah Satoshi meant for the UTXO (unspent transaction output) model to begin with but messed up that detail mistakenly thinking signing more stuff was better.

Questioning whether it’s a good idea to “drop stated goals” and if Cohen thinks they’re “unobtainable”, Twitter user @CogentConch pointed out that “many people are invested in ETH because of [the] upcoming” proof-of-stake (PoS) upgrade to the Ethereum network. Per the BitTorrent creator, the “current plans” for doing state transitions on Ethereum are “unworkable, or are only workable by letting the thing continue to quickly backslide into centralization.”

"Hard To Explain" To Those Who Don't Have A Technical Background

Acknowledging that state transitions and other implementation details related to Ethereum are “hard to explain without assuming quite a bit of technical background for the reader”, Cohen noted:

The idea is to have 'transactions' in the database sense, so they have clear dependencies and [users] know in advance exactly how much gas they'll need ... Basically every detail of a transaction's execution and the amount of gas it uses should be precisely specified up front and the slightest deviation from that should make it fail.

In October 2018, Cohen had announced his plans to launch a new cryptocurrency (called Chia) based on a “proof of space” consensus protocol - which he claimed was a more eco-friendly version of Bitcoin (BTC).

Vitalik Buterin Proposes Using Bitcoin Cash As Data Layer for Ethereum

Ethereum (ETH), the world’s largest platform for building and deploying decentralized applications (dApps), is currently facing significant scalability problems. This, as the size of the Ethereum blockchain has grown much larger than what the project’s founders may have anticipated - when the smart contract platform was first launched around five years ago.

Bitcoin Cash (BCH) May Serve As Data Layer for Ethereum?

In order to address Ethereum’s scalability challenges, Vitalik Buterin, the Co-Founder of Ethereum, suggested using blockchain networks that have relatively lower transaction fees.

Buterin argued that Ethereum could leverage smaller blockchain-based platforms by using them as a data layer. According to Buterin’s assessment, Bitcoin Cash (BCH) may “fit the bill perfectly” as it has a relatively high data throughput rate.

Bitcoin Cash Blockchain’s Throughput Rate Is Almost 7x Greater than Ethereum

Currently, the Bitcoin Cash blockchain can process around 32 MB of data in roughly 600 seconds, which is equivalent to about 53,333 bytes/second. This is almost 7x faster than Ethereum’s processing capacity - as the leading smart contract platform can only handle around 8 kilobytes (8,000 bytes) per second.

While the Bitcoin (BTC) blockchain may have the highest level of security, transaction fees on its network might be too high for it to be practically used as a data layer. Meanwhile, the Bitcoin Cash network may be more suitable for data processing as its transaction fees are considerably lower (at present) than most major crypto networks.

Might Be Easy to Validate BCH Blocks Inside Ethereum

Online tools such as BTCRelay may allow developers to easily verify Bitcoin Cash blocks inside of the Ethereum network. According to Buterin, the tool would just have to be repointed toward the Bitcoin Cash blockchain, in order to validate transaction data. The BCH network appears to be well-suited for this process due to its low transaction fees.

Although the BCH network may seem ideal as a data layer, Buterin noted that the cryptocurrency’s 10 minute block times may be considered its biggest weakness. However, the Russian-Canadian programmer believes this issue may be resolved in the forseeable future.

Ethereum Classic Blockchain May Be “Another Natural Alternative”

Notably, Buterin said that the Ethereum Classic (ETC) blockchain might be “another natural alternative”, however it’s not as scalable when compared to the Bitcoin Cash network.

As noted by Buterin: 

There’s a large space of quite powerful and effective scalability solutions that rely on a non-scalable computation layer (ie. the current ethereum chain suffices) plus a scalable data layer.

By using “interactive” computation techniques, like Truebit, developers are able to compute the current state on “the Ethereum side.” This process depends on the “data availability verification guaranteed by the data layer”, which ensures that “fraudulent” submissions can be “detected and heavily penalized”, Buterin wrote on the EthResearch forum website.

A Temporary Solution Until Ethereum 2.0 Is Launched

He also clarified that potentially using Bitcoin Cash or Ethereum Classic as data layers would be a short-term or temporary solution. This, as Ethereum 2.0, a major system-wide upgrade, will be released in order to improve the overall efficiency of the world’s largest dApp development platform.