In a recent tweet from Compass Mining Benjaminion_xyz made the bold claim that the Ethereum network is overpaying for security. He said "In the sense that we're overpaying for security" when talking about ETH moving over from POW into POS.
Who is Overpaying for Security:
The Ethereum network pays out or "tips" miners for doing work on the algorithm. This gives users a reason to work on the block chain, as it is profitable. The development team is not paying for this service, if they were actually paying for this security then it would come out of the 72,000,000 coins the put into pre-mined wallets. Don't lets these crayon eating clowns fool you, they are not paying for sh*t. They still have their precious coins and the miners haven't even mined the same amount of coins that they pre-mined! As of 2/1/2022 there is a total supply of 119,408,203 ETH mined. This means that only 47,408,203 coins have been mined! Meaning that over half of the current supply of ETH is pre-mined and held by the dev team.
Why Should you Care:
When ETH moves from POW over to POS then users with 32 ETH can set up a node and essentially stake for more ETH. As of 2/1/2022 you would need $86,400 to set up a single ETH node. This means the average gamer / hobbiest miner will not be able to afford "mining" ETH anymore. Less miners means less security and decentralization. This means that it will also be easier to preform network attacks, Imagine if your bank decided they didn't need those extra security cameras or vault to protect your assets anymore! This is a genius move made by the team and I can't wait to see ETH tank down below the price of ETC after the first attack / hack. Lets theorize that someone is able to gain access to the network information for a large amount of nodes, and lets say they have malicious intent. With amazing exploits, even from larger companies *Cough* Log4J *Cough* I find it hard to imagine there wont be a vulnerability somewhere.
Conclusion:
The dev team is delusional thinking they are overpaying for security when its one of the reason why ETH became one of the larger coins. With ALGO already being a POS coin with faster network transactions and lower gas fees its only a matter of time before the Crypto tech is realized by someone's massive cranium and people stop buying popular coins and move to coins with more utility. With POW ETH could at the very least claim to be the 2nd most secure coin in the market but with the high entry point for creating nodes the are fu*ked.
