Ethereum’s Problems Compound on the Verge of the ‘Merge’
We’ve written before about how Ethereum’s so-called ‘Merge’ isn’t the game-changer it’s touted as because it won’t be a true proof-of-stake protocol with true finalization, but in the wake of the Treasury Department blacklisting coin mixer Tornado Cash, Ethereum’s problems are compounding.
Coinbase will be one of Ethereum’s biggest validators after the Merge, and has about a 15% share in Ethereum. That brings the Tornado Cash sanction into play.
The issue arises because of the potential legal ramifications of the Tornado Cash sanction. Neuner believes Coinbase will allow institutions to stake Ethereum, and they will become validators of transactions. He poses the question as to what happens if a transaction is done through Tornado Cash.
Neuner believes that if Coinbase verifies the transaction, it could be under the radar of OFAC. The Office of Foreign Assets Control is a department of the US treasury that sanctioned Tornado Cash.
On the other hand, if they refuse to verify such a transaction, it could make Ethereum worthless. According to Neuner, Ethereum is worthless if Coinbase refuses to verify certain transactions.
Ethereum 2.0 has already been under fire due to potential centralization and censorship issues.
Only a protocol built from the ground up as proof-of-stake can overcome these issues, as well as the issues of lack of scalability and through-put. That’s why we’re building Silvermint – to fulfill the promise of blockchain and get us to Web3.