“What do you think of the merger? I recently innocently asked William “Wills” de Vogelaere, co-founder of Spankchain and probably half a dozen other protocols in the macabre underworld of Ethereum.
I was of course referring to the long-awaited software update that started Ethereum minors and replaced them with a cohort of eco-friendly actors on September 15.
“You mean Ethereum illusionde Vogelaere joined bitterly.
“OhoI thought. It could get juicy. It turned out that de Vogelaere was expressing an opinion rarely aired in public: that the merger was a mistake. Or, if it’s not an italicized error, some sort of off topic distraction.
“It didn’t add anything really interesting other than the environmental factor,” he fumed.
According to de Vogelaere, the whole enterprise was a naïve capitulation. Influential people who worry about Ethereum’s huge carbon footprint, he said, are only exploiting environmentalist fears for their own cynical ends. “Nobody really gives a fuck if something is green, as long as it works,” he said. “Companies don’t care as long as they can be seen to care.”
Maronn’! Admittedly, it’s not hard to see why people like de Vogelaere are in a bad mood – since the merger went through, the price of ETH has fallen. Bitcoin supporters ridicule the change. dark whispers about Ethereum now being a “security” has raised the hedgehogs of even the oldest Ethereum connoisseurs – and even led some to the embrace of a group of long-outcast Ethereum fanatics. (We will come back to this.)
As de Vogalaere told me, the idea that public opinion of Ethereum would improve as a result of the merger may have turned out to be a canard. Regulators, he said, will hardly change their minds now that this single environmental grievance has been eliminated, especially given this new push to label it a safety issue.
And yes, yes, fusion has been a fabulous display of technical skill. Merging Ethereum in real time was like turning on the engine of a car as it exploded at full throttle on a highway, we are told. It’s revolutionary from an R&D point of view, but so was the atomic bomb.
Even so, de Vogelaere believes, the supposed technical improvements of fusion are overstated. It was supposed to facilitate various upgrades that would introduce more efficiency into the network. But de Vogelaere thinks these solutions have been around for a long time anyway, in the form of side chains— annexes to the flagship network that use different validation methods — such as Polygon. Only Ethereum’s computing environment, the “virtual machine”, has any real value, he argued, and that is not significantly affected by the move to the staking model.
He too (God!) pointed out that those who don’t have the minimum amount to bet independently – 32 ETH, around $42,500 and falling at the time of writing – should bet through centralized exchanges like Coinbase. This means putting the majority of Ethereum on a corporate exchange with a single point of failure.
So we have established that Ethereum price is now in the shit and regulators are on the move. But is de Vogelaere’s point of view perhaps only a minority point of view?
Not so! Kristy Leigh-Minehan, a longtime Ethereum miner (who may admittedly be a bit biased), is not enough anti-fusion in the same resentful vein as our de Vogelaere. On the contrary, she wonders if it didn’t happen a little too soon. “The move to proof-of-stake is a key part of Ethereum’s DNA and was always planned,” she said. “It was necessary and required for future optimizations and scalability features – the question everyone needs to ask is: was it now The good moment?”
Minehan isn’t so sure. “I personally don’t think it’s in the current regulatory climate,” she said. She wonders if the prospect of ETH being newly classified as security could risk “scaring off validators, operators and entrepreneurs.” The primacy of US regulators in particular, she added, can be bewildering. Echoing de Vogelaere, she said, “It is undeniable that Ethereum has taken root in the United States – that will be its greatest strength and its greatest weakness.”
At least some Breed Ethereum advocates remain optimistic. “It might have some impact on regulatory decision-making,” ventured Mat Dryhurst, a left-leaning podcaster and early adopter of NFTs. “But to be honest, I don’t really feel like it’s too much of a concern on the developer side. People are excited to create more utility for the network, and the merger felt like a celebration of another milestone on a long roadmap.
But isn’t this certainly a bit overhyped? “It’s not a big technological innovation, and I don’t think it was planned,” Dryhurst hesitated. “Rollups, zkEVM [zero-knowledge virtual machines] etc are still needed to scale. I think this only establishes the credibility of this coin of crypto and increases confidence that other ideas discussed will be executed. He added that he was recently at ETH Berlin and the energy was “as bullish as ever”.
The Merry Old Guard
There is perhaps a cohort that wholeheartedly agrees with all of de Vogelaere’s and his ilk’s disastrous diagnoses on fusion – and unabashedly gloats about it. They are guardians of another now-defunct network that they believe has been, like the miners, also betrayed by the cowardly managers of Ethereum proper: an older, abandoned iteration of the Ethereum network called Ethereum. Classic whose supporters are arguably the most OG you can get in the brief but melodramatic lifespan of Ethereum politics.
Ethereum Classic was born in 2016 in the wake of a deleterious hack of the Ethereum network’s first decentralized autonomous organization, or The DAO. Traditional Ethereum developers voted overwhelmingly to “cancel” the hack and make the victims whole, which a few finicky people saw as a deadly betrayal of Ethereum’s fundamental principle of immutability. They clung to the old hacked network and Ethereum was cut in half. Since then, they have been waiting for the merger, believing that the newly unemployed miners (whom they are actively trying to seduce) would flock to Ethereum Classic in search of new revenue.
Incredibly, after six years of patient anticipation, they were right.
“We have seen a significant increase in interest in Ethereum Classic over the past two months,” said Bob Summerwill, executive director of ETC Cooperative, the foundation behind the development of Ethereum Classic, whose ticker is ETC. “The merger was obviously a catalyst.” He added that the amount of mining power on the network has since increased tenfold, and Ethereum Classic is now the third-largest proof-of-work chain by market capitalization and the second-largest by volume.
Summerwill, like others, pointed out that fears over US capture of the network and newly vigorous regulators may have galvanized many of these miners into ETC. “Ethereum Classic seems to benefit from providing a known and likely safer alternative to these issues,” he said. It was a bumpy start, however: Ethereum Classic, like many others, has recently taken a dive and its miners are operating at a loss. “We’re always trying to find a new balance,” Summerwill said.
Still, it’s a somewhat stunning reversal. After years of agonizing waiting, you must be wondering if the grumpy old pedants of the Ethereum Classic network — and even the so-called Ethereum regulators — have the final say.
As de Vogelaere put it: “ETH may have played its fucking me.”
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