[ccpw id="39382"]

HomeCrypto NewsMarketEthereum Founder Vitalik Buterin Smashes PoW, Says It Penalizes Miners with Low Hashpower

Ethereum Founder Vitalik Buterin Smashes PoW, Says It Penalizes Miners with Low Hashpower


Written By:


Vitalik Buterin argues that PoW mechanism punishes miners with lower hash power.

Despite the former promising more energy-efficient solutions and better throughput, the Proof-of-Stake consensus mechanism and Proof-of-Work consensus mechanism have been the subjects of an age-old debate in the crypto community. 

Some PoW proponents – especially Bitcoin maximalists – have taken to baring certain perceived flaws with PoS. Buterin recently launched a counterargument against one of such assertions.

A renowned Bitcoin maximalist and former Blockchain research lead at Colu, Udi Wertheimer, took to Twitter to point out some perceived issues with PoS. According to Wertheimer, contrary to post-popular belief, PoS is not built to reward yields to stakers. Wertheimer argued that these yields awarded to stakers are, in fact, a way of penalizing non-stakers.

“PoS rewards aren’t “yield”, in fact they’re not even rewards, they’re just penalty to people who don’t stake,

you don’t get paid for staking you m.rons; you just get penalized for not staking. I can’t believe you still don’t get it lmao,” Wertheimer added.


Vitalik Buterin, co-founder of Ethereum, deemed it necessary to counter Wertheimer’s odd assertion. Buterin argued that if the assertion is to be considered across all consensus mechanisms, then PoW penalizes people whose percentage of hash power is less than the percentage of the supply of the asset. 

“And PoW penalizes anyone who has a smaller percentage of hash power than their percentage of the coin supply.

(Actually, it penalizes much more than that because profit < revenue, but you get the point),” Buterin noted in the tweet.


Buterin’s counterargument highlights a few issues encountered with the PoW mechanism. Generally, miners don’t see as much profit when their hash power is relatively low compared to their ratio of coin supply. This is due to the increasing competition in the Bitcoin mining industry, as mining difficulty soars with more miners entering the market.

Additionally, with the rising cost of electricity, miners see less profit in the industry than before. Buterin’s line of argument is aimed at countering Wertheimer’s assertions. Wertheimer’s point was based on the fact that non-stakers get diluted as more tokens are pumped into the space to reward stakers. This adds to the inflationary trend of the asset.

Follow Us on Twitter and Facebook.

Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.



Albert Brown
Albert Brownhttps://thecryptobasic.com/
Albert Brown is a cryptocurrency investor and journalist who has been in the nascent space since 2017. His love and passion for technological innovations made him delve deeper into the world of blockchain and cryptocurrencies. As a journalist, Brown has written on several crypto-related topics that have been referenced by popular industry players like Tyler Winklevoss, Binance CZ, etc.

More from Author