What does it mean for a cryptocurrency to “transition from PoW to PoS”? What does it mean for decentralized entities to come to a consensus on a massive change to how they operate?
Decentralized governance is really hard, and chains split all the time—remember Bitcoin Classic? Ethereum Classic? All pretty dead now, but in their day they represented substantial chain splits that took a long time to fully resolve.
So, I would say that such a transition is mostly a question of decentralized governance, not a question of technology. If Bitcoin “transitioned to PoS”, what actually would have happened is that someone invented a whole new PoS cryptocurrency with very little relationship to Bitcoin, and managed to convince everyone that this new cryptocurrency was actually Bitcoin and that they should all immediately switch. That’s really really hard to do!
So, one might wonder why Ethereum seems to be able to do this and yet Bitcoin is a much harder nut to crack. I think the biggest reason is the nature of the decentralized governance of both cryptocurrencies. Bitcoin was effectively released into the wild to fend for itself from Satoshi’s initial implementation. Ethereum, on the other hand, has always had a strong steering hand in the Ethereum Foundation. Because there is a concept of legitimate governance within the Ethereum ecosystem, it’s a lot easier to roll out breaking upgrades. But make no mistake—even with this stronger governance, the Ethereum PoW->PoS upgrade is effectively the same as the one described above, where we’re swapping out the existing protocol with something pretty different and just trying to convince everyone that its the “legitimate continuation” of that protocol.
What does it mean for a cryptocurrency to “transition from PoW to PoS”? What does it mean for decentralized entities to come to a consensus on a massive change to how they operate?
Decentralized governance is really hard, and chains split all the time—remember Bitcoin Classic? Ethereum Classic? All pretty dead now, but in their day they represented substantial chain splits that took a long time to fully resolve.
So, I would say that such a transition is mostly a question of decentralized governance, not a question of technology. If Bitcoin “transitioned to PoS”, what actually would have happened is that someone invented a whole new PoS cryptocurrency with very little relationship to Bitcoin, and managed to convince everyone that this new cryptocurrency was actually Bitcoin and that they should all immediately switch. That’s really really hard to do!
So, one might wonder why Ethereum seems to be able to do this and yet Bitcoin is a much harder nut to crack. I think the biggest reason is the nature of the decentralized governance of both cryptocurrencies. Bitcoin was effectively released into the wild to fend for itself from Satoshi’s initial implementation. Ethereum, on the other hand, has always had a strong steering hand in the Ethereum Foundation. Because there is a concept of legitimate governance within the Ethereum ecosystem, it’s a lot easier to roll out breaking upgrades. But make no mistake—even with this stronger governance, the Ethereum PoW->PoS upgrade is effectively the same as the one described above, where we’re swapping out the existing protocol with something pretty different and just trying to convince everyone that its the “legitimate continuation” of that protocol.