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- The inventor of Ethereum Vitalik Buterin has explained what he believes are the greatest threats to Bitcoin and Ethereum.
- Bitcoin could lose the attention of investors, users and developers, Buterin predicts.
Over the last few weeks the Bitcoin and Ethereum communities have once again collided and one of the epicenters of the debate has been Peter McCormack’s podcast, What Bitcoin Did. The podcast is aimed at the general audience who want to get closer to crypto space, but have little technical knowledge.
McCormack recently made two episodes of the podcast with Blockstream’s CSO, Samson Mow, a well-known Bitcoin maximalist, and the inventor of Ethereum, Vitalik Buterin. In the latest episode, Buterin made some interesting predictions about future threats to the these two cryptocurrencies.
Could governments attack Bitcoin and Ethereum?
Buterin said his biggest concerns for the crypto market in general involve technical issues and the threat of intervention from authorities. Specifically, Buterin expressed concerns about possible more active intervention by security authorities to harm Bitcoin and Ethereum. He named two hypothetical scenarios in which his concerns could be realized, whereby he declared as the first scenario a technical failure due to quantum computers.
So the thing that I tend to worry about — I mean one is that there’s always this kind of black swan risk of technical failure. What if the NSA comes out with a quantum computer out of the blue and just steals a bunch of coins before you can do anything about it?
As a second scenario, Buterin described that governments around the world could issue bans, for example on mining farms, which would then be confiscated and could be abused in the hands of the government:
[The second one is] political failure. So what if governments banned Bitcoin, commandeered the mining pools and use that to do what I call a 51% spawn camping attack – attacking the chain over and over again until it becomes non-viable? And meanwhile, the prices are low because the thing’s banned and there’s a crisis of confidence?”
Regarding the particular threats to Bitcoin, Buterin said that it could face a crisis as it loses interest from developers and users. This loss of interest would be mainly motivated by, according to Buterin, the low functionality of Bitcoin to different applications. Therefore, Buterin believes that in the long run users will prefer to use one of Bitcoin’s competitors.
Bitcoin doesn’t have what I call functionality escape velocity. So basically, sufficient functionality to serve as a trustless base layer for a lot of different applications. As a result of this, there’s a possibility that over time people will find Bitcoin less and less interesting and other platforms more interesting.
More reserved about Ethereum’s challenges, Buterin addressed the issue of whether Ether (ETH) can be considered as sound money. The inventor of Ethereum stated that this depends on the definition used of the word. However, he added that ETH is used as a store of value.
The word money does combine together a lot of different concepts. For example, people talk about unit of account, medium of exchange, store of value. For unit of account, ETH is not that and BTC is not that either. For medium of exchange, Bitcoin is used as that and ETH is used as that sometimes… ETH has store of value. That is definitely something that people use ETH for.
Below you can see the full podcast of Peter McCormack with Vitalik Buterin and Samson Mow: