Michael Saylor, the chairman of the Microstrategy board and owner of 130,000 Bitcoin on the balance sheet of his business, thinks Ethereum is just as dangerous as Terra.
Since 2015, Ether developers have been attempting to switch from the inefficient proof-of-work (PoW) protocol to the more effective proof-of-stake protocol (PoS). Saylor believes that because of this milestone’s realization in September, the blockchain is in danger of imploding.
In PoS, the validators required to confirm transactions must have enough ETH. In his most recent video, Matthew R. Kratter pinpointed this specific issue as the situation’s Achilles heel, receiving Michael Saylor’s admiration.
According to Kratter, the network would come to an end if Ether were to be widely withheld and became unavailable for consensus PoS for whatever reason:
“More users will choose to withdraw their coins as the price of Ethereum declines. This in turn compromises Ethereum’s security and may result in a downward spiral.”
If proof-of-stake systems like Ethereum and Cardano are susceptible to devastating explosions like Terra Luna, regulators need to take this into account.
Saylor supports Kratter’s assertion and adds that PoS are inherently dangerous due to their fragile architecture.