ETH 2.0 is upon us
Is there a risk associated with owning ETH2.0 ...
Well first lets talk about the positive things.
ETH merge that transforms ETH to ETH 2.0 is by far one of the biggest event in the crypto universe right now.
It is slated to happen in the first half of Sep 2022
The after effects of the merge
The fee drops tremendously.That looks to be the case on the positive side.
One would be able to stake ETH as ETH moves from POW to POS
Technically one would need 32 ETH to do this however there would be pools that would allow you to do this.
ETH goes green
The blockchain would need a lot less energy to function.
Hopefully a lot more corporate investors would line up. This could mean that all those who shun crypto's POW version for being an energy guzzler could turn to ETH 2.0 and start staking, hodling and investing in defi.
Is this all only good ?
So far everyone seems to be talking all positive about the ETH merge event however it remains to be seen what future holds for ETH post the merge event.
The serious change in the distribution of nodes.
A majority of staking nodes would be controlled by the likes of
Coinbase
Binance
Kraken and
Lido finance
So how is that a risk one may ask ?
currently holding or trading in ETH or even mining it with a rig does not require a KYC
However with the control of the staking nodes in the hands of a handful of enities it may be possible for them to influence the blockchain in ways not everyone likes.
What if they ask you to do a KYC for holding or staking ETH or ban your wallet as per their whims and fancy?
Would it be desirable for the decentralized nature of the blockchain?
There is a realistic risk that the level of decentralization would get diluted and this may adversely affect the blockchain.
The precedence is already set with Tornado cash
August 8 2022
U.S Treasury Sanctions Virtual Currency Mixer Tornado Cash
What this means is that any wallet has interacted with the Tornado cash wallet would are at the risk of facing the sanctions.
This is what Brian Armstrong of CEO coinbase has said about sanctions in a tweet.
"Sanctioning a technology (as opposed to an individual or entity) seems like a bad precedent to me, and it should probably be challenged. Could have many downstream unintended consequences.
#TornadoCash"
He went on to add
Hopefully obvious point: we will always follow the law.
So what happens if in the future if govt.s want to extend their control over ETH ?
Could they do some arm twisting and use coercion to force both centralized platforms to fall in line in the name of compliance ?
We can only hope that the Tornadocash sanctions was a one off event however there is no guarantee that such things cannot happen in the future.
As for now we can only keep our fingers crossed and hope for the best.
