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Not everyone may know this, but in 2020 a Bitcoin fork was created whose consensus algorithm is based on PoS.
The relationship between Bitcoin’s PoS fork and Ethereum’s Merge
In view of the Merge, which took place successfully yesterday, the question appears to be a natural one. What many are wondering is whether the price evolution of BitcoinPoS (BPS) can be a good guide to determine the future of Ethereum.
Question: is bitcoin PoS (forked in 2020: https://t.co/txg3TSpm2v) price development good guidance for the future price of today's ethereum PoS fork? Yes, no, why? pic.twitter.com/OHgyglLk0p
— PlanB (@100trillionUSD) September 15, 2022
Taking just a small step back, in 2020, a group of developers created a fork of the Bitcoin network, changing its original consensus mechanism.
On the official website they define it as:
“The next evolution in Bitcoin technology. Satoshi’s vision reimagined.”
Going then to look at the price chart of the protocol’s native token, it does not appear that the project has been successful so far. In fact, quite the opposite.
It is enough to look at the daily volume value, which is $86 at the time of writing, to see that the idea has been neither appreciated nor accepted by the community.
The main differences between Bitcoin and Ethereum
And therein lies the difference with the Ethereum Merge, an update that has been expected by all. Given the size of the ecosystem and the potential of its future developments, the move to PoS was instrumental in creating a more sustainable and above all, more scale-efficient environment.
Its positive effects will not be immediate, but visible over a long-term time horizon.
Moreover, the Bitcoin ecosystem is not at all comparable to that of Ethereum, given the nature of the two blockchains and the goal according to which they were created.
The former presents itself as the revolution in payment systems, whose strength lies in the development of the Lightning Network, layer 2 of Bitcoin.
The second, on the other hand, was created as the first programmable blockchain, whose potential is based precisely in the smart contract creation environment. Hence, the need to be able to rely on a more efficient and scalable ecosystem, paving the way for a more robust and sustainable Web3 future.
Thus, the BPS value trend cannot be a good estimate of the future evolution of ETH success with the introduction of PoS.
PlanB’s vision and tweets
The series of tweets posted yesterday by the PlanB account, famous for creating the stock-to-flow model for BTC price prediction, appears curious.
It is worth mentioning that his words were not figments of imagination, but based on real analysis and numbers. Even if the influence and vision of a Bitcoin maximalist appears evident, they should nonetheless be considered objectively. Beyond preferences and the “faction” one is part of, one must be able to consider all sides of the coin.
About two hours before the BitcoinPoS price question, another tweet had been posted, the first in this series:
Ethereum forked from PoW (energy) to PoS (trust/politics/fiat) today.
Next: some idiot will fork #bitcoin from PoW to PoS .. because climate 🤡
— PlanB (@100trillionUSD) September 15, 2022
This sort of fierceness toward Ethereum’s transition to Proof of Stake and the reasons for it seems evident.
His words in fact cast a bad light to some extent on the issue of environmental impact, which is not entirely marginal. It is worth noting that the energy requirements of Ethereum’s network now, thanks to the abandonment of PoW, have been reduced by more than 99.9%.
A few hours later in the afternoon, PlanB continued to reinforce his idea with the following tweet:
This is what governments, regulators, MSM and many ESG investors fail to understand:
– bitcoin/PoW can go CARBON NEGATIVE
– PoS can not do that https://t.co/bwuTM05DOR— PlanB (@100trillionUSD) September 15, 2022
The statement he makes is a bit strong, since environmental impact has been one of the biggest selling points in promoting Ethereum’s transition from PoW to PoS.
In fact, he is keen to point out that in the not-too-distant future Bitcoin may even become Carbon Negative. In contrast, all PoS systems, although much less energy-intensive, will never be able to achieve this, given their technical nature.