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The ‘Ethereum is a security’ debate has been going on for a while now. With the move to proof of stake from proof of work closer than ever, the thoughts and think pieces around these have ramped up significantly over the last couple of weeks. It has begun to gain more traction as some notable personalities in the crypto community have chimed in in support of Ethereum being a security and founder Vitalik Buterin has now taken to Twitter to address them.
Buterin Strikes Back
Vitalik Buterin has responded to those who keep saying that Ethereum is a security. This school of thought has arisen from the fact that Ethereum is now moving to a new proof mechanism and a lot of personalities have argued that this makes the digital asset a security. One of these has been a Twitter user and Bitcoin supporter who goes by the name Nick Payton on Twitter. According to Payton, the fact that users of the network were able to vote to change to proof of stake made it a security.
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This obviously struck a nerve with founder Buterin who had lashed out at Payton. In a quote tweet, the Ethereum founder explained that believing that the network moving to a proof of stake mechanism meant that users could vote on protocol parameters was a “bold-faced lie”. He explained that proof of stake does not work any differently from proof of work in that regard, saying, “Nodes reject invalid blocks, in PoS and in PoW. It’s not hard.”
ETH price maintaining above $1,000 | Source: ETHUSD on TradingView.com
In another tweet, the Ethereum founder also corrected some grammatical uses that may have led to confusion. “When talking about things like proof of stake, we don’t say “it’s a security”, we say “it’s secure”,” said Buterin, alluding to the words often used to describe the move to proof of stake. “I know these suffixes are hard though, so I forgive the error,” he concluded.
But Is Ethereum A Security?
Mostly the debate about whether Ethereum is a security has been happening in circles that are densely Bitcoin maximalist. However, their support of bitcoin does not mean that their stance on Ethereum being a security has not been taken seriously and has been garnering support from crypto investors.
Besides the move to proof of stake which is believed to give users the right to vote on protocol parameters after the merge, there is also the fact that Ethereum had an ICO when it first launched. It was not incredibly popular at that point but a lot of people had first gotten into the digital ICO back in 2014. Due to this, many believe that Ethereum qualifies to be called a security.
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Another prominent figure in the space who has chimed in is MicroStrategy CEO, Michael Saylor. According to Saylor, Ethereum can be classified as a security because of a number of things. “It was issued via an ICO [initial coin launch],” said the CEO. “There’s a management team. There was a pre-mine. There’s a hard fork. There are continual hard forks. There’s a difficulty bomb that keeps getting pushed back.”
“For it to be a commodity, there can’t be an issuer, and the truth is you can’t really make decisions. One of the fundamental insights in the crypto industry is the fact that you can change it is what makes it a security,” Saylor added.
Featured image from Bloomberg, charts from TradingView.com
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