Criticizes Ethereum: Decentralization Doubts on Pre-Mined Coin

Criticizes Ethereum: Decentralization Doubts on Pre-Mined Coin

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PlanB, known for the Stock-to-Flow model, has recently slammed Ethereum, criticizing its core mechanics, particularly its move from Proof of Work (PoW) to Proof of Stake (PoS). This critique comes as ETH's price and dominance have witnessed a significant drop this year.

Centralization and Pre-Mining: The West Side Story Between Ethereum and Bitcoin

PlanB referenced an old post by Vitalik Buterin from 2022, where Buterin criticized the Stock-to-Flow model. Seizing the opportunity, PlanB took a dig at Ethereum, calling it a "shitcoin" due to its centralized structure, pre-mined supply, PoS adoption, and flexible supply schedule.

"Yo, it's not cool to brag but ETH, that centralized & premined crap, with PoS instead of PoW, and a supply schedule as flexible as a jello worm, deserves every lick of mockery it gets," PlanB declared.

Meltem Demirors, an executive at Crucible Capital, echoed similar sentiments, labeling the shift to PoS a trillion-dollar mistake. She believes this move diluted Ethereum's core network and stifled GPU hardware innovation.

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Dive Deeper

ETH's tokenomics reveal that over 72 million ETH (around 60% of the circulating supply) was pre-mined during development, potentially giving a select few excessive control. Add to that the centralizing nature of PoS, and you've got a recipe for power concentration, PlanB points out.

"Bro, pre-mine's a big red flag, but I guess some folks just don't give a damn," PlanB added.

These criticisms gained momentum as Ethereum's dominance hit a five-year low, and ETH tumbled nearly 60% since late last year.

But Wait, There's More to Ethereum Than Meets the Eye

Analyst Danny Marques highlighted ETH's growing significance, pointing out that the Ethereum network processed a massive amount of stablecoin transactions in 2024, surpassing Visa. According to a Bitwise report, stablecoins processed nearly $14 trillion, outpacing Visa's $13 trillion, with ETH-based stablecoin supply accounting for over 50% of the total stablecoin supply.

Investor Wise also noted that Ethereum hosts 56% of all real-world asset (RWA) value, including stablecoins. Furthermore, AllThingsEVM.eth argued that Ethereum is becoming less centralized annually, while Bitcoin is becoming more centralized, as nation-states and institutions amass BTC.

Despite the ongoing criticism, Ethereum continues to enhance its performance and scalability. Lately, co-founder Vitalik Buterin proposed replacing the Ethereum Virtual Machine (EVM) with RISC-V to boost smart contract performance and scalability while maintaining backward compatibility with existing contracts.

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1. PlanB, renowned for the Stock-to-Flow model, has recently criticized Ethereum's core mechanics, particularly its shift from Proof of Work (PoW) to Proof of Stake (PoS).
2. PlanB labeled Ethereum as a "shitcoin" due to its centralized structure, pre-mined supply, PoS adoption, and flexible supply schedule.
3. Meltem Demirors, an executive at Crucible Capital, shares PlanB's sentiments, calling the shift to PoS a trillion-dollar mistake.
4. ETH's tokenomics reveal that over 72 million ETH (around 60% of the circulating supply) was pre-mined during development, potentially giving a select few excessive control.
5. PlanB points out that the centralizing nature of PoS, coupled with pre-mining, leads to power concentration.
6. Ethereum network processed a massive amount of stablecoin transactions in 2024, surpassing Visa, as highlighted by analyst Danny Marques.
7. Investor Wise noted that Ethereum hosts 56% of all real-world asset (RWA) value, including stablecoins.
8. Despite ongoing criticism, Ethereum continues to enhance itself for performance and scalability, with co-founder Vitalik Buterin proposing to replace the Ethereum Virtual Machine (EVM) with RISC-V to boost smart contract performance.
9. In 2022, Vitalik Buterin critiqued the Stock-to-Flow model, sparking further discussions within the crypto community.
10. PlanB, while criticizing Ethereum, encourages investors to be vigilant about pre-mining, a "big red flag", particularly when considering investment opportunities in finance and technology.

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