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RE: Vitalik: Ethereum Stinks For Most Applications

in LeoFinance5 years ago (edited)

Blockchain consensus mechanisms come with a trilemma whereby you only get to pick two out of decentralization, security and scalability. Different consensus mechanisms emphasize the three in different ways. Bitcoin and Ethereum both use Proof-of-Work, which sacrifices scalability for decentralization and security. PoW is not just some primitive consensus mechanism which can and will inevitably be replaced by Proof-of-Stake or some variant of it such as DPoS. I believe using PoW is the very reason Bitcoin can be as massively valuable as it is. Also, it helps Ethereum attract applications involving high-value contracts that it is very decentralized and uses PoW.

I think Ethereum is best suited for high-value contracts that require a high-level of security simply because any less security would create incentives for an attack against the consensus mechanism. But as you write, Ethereum can be used as a source of deep liquidity for projects mainly using other, higher-throughput chains through cross-chain bridges.

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Ethereum has been hacked.

Bitcoin has never been hacked.

As far as I know, there was a situation in the early days of Bitcoin when there was a vulnerability to be exploited but the devs fixed it before anyone could do it.