Key Takeaways:
Senior ETF analyst Eric Balchunas from Bloomberg shared an excerpt from the "Bitcoin: Beginners Guide" book which claimed that Ethereum was not safer than Bitcoin and that the US government could take it down.
The claim faced severe flak from the community which provided clarity that only 28% of Ethereum's nodes were on Amazon.
Though Eric later deleted the tweet, the claims spread like wildfire and drew the irk of the entire Ethereum community.
Bloomberg ETF expert Eric Balchunas has criticized Ethereum by sharing an excerpt from the book, "Bitcoin: Beginners Guide". The excerpt said that Ethereum was less secure than Bitcoin and could be turned off if the US government pressured AWS to shut down Ethereum's validator nodes.
Eric soon came under severe attack after sharing this tweet and deleted it soon. However, by then the news of this error had already spread.
In tweeting an excerpt from the book, Eric made a gross mistake. Books have static information that cannot keep up with new crypto developments.
Expectedly, Eric faced severe criticism from the Ethereum community which clarified that only around 28% of Ethereum's validator nodes are on AWS.
Further, like all true Ethereum is a censorship-resistant blockchain which means that it cannot be banned. A proof of this concept lies with Tornado Cash and Monero, both of which were banned across the world but still thrive.
Looking at this from another angle, we see that around 28% of validators rely on AWS. If the validators somehow get shut down, there would be another 72% of validators that can as easily keep Ethereum up as it is now. Ethereum has over 1 million validators.
Data from Ethernodes show that only 32% of Ethereum's validators are located in the US which means that in an unlikely situation where the government gets bent on banning Ethereum, it can only take down 32% of the validators, leaving at least 68% up which roughly equals to 680 million validators.
A top few countries that host Ethereum nodes are shown below. In total, there are over 81 countries that host Ethereum validator nodes. Further, there are hundreds of potential validators that can replace the existing ones at a moment's notice.
Talking about the cloud networks where Ethereum validators are located, we find that though a large number of them exist on AWS, however, most of them exist on small independent cloud networks. If they get banned from the US, there would be enough of them to sustain Ethereum's workload at current speeds. In other words, you would not even realize the US-based validators are gone.
To end the discussion, it is now necessary to compare the Bitcoin and Ethereum networks and understand why Ethereum is not inferior to Bitcoin.
Ethereum does not need highly specialized mining rigs like Bitcoin. Ethereum is based on the proof-of-work consensus mechanism. It relies on staked ETH to allow validators to verify and add transactions to the blockchain. This means that it requires far less complicated software.
Further, to become an ETH validator, you do not need to own all the 32 ETH, you can ask delegators to stake their ETH with you and become a validator by pooled resources.
On the other hand, Bitcoin mining has become a seriously sophisticated operation with millions of dollars required sustain profitable operations.
On the matter of decentralization, ETH is at its peak with over 1 million validators spread across 81 countries. However, Bitcoin is not as decentralized as it used to be once due to the increase in difficulty which necessitates complex hardware like ASIC miners.
Large blockchain networks like Ethereum are sufficiently decentralized to prevent any kind of attacks, disaster, or censorship. They are geographically distributed across 81 countries and rely on multiple independent cloud networks to sustain. Banning Ethereum would seriously take the entire world's effort and yet, it would not guarantee a complete shut down.
Such global bans were placed on crypto mixers like Tornado Cash and even on the Monero chain. A little later, to everyone's surprise, both of these bans fell on their face. Recently, in the WazirX hack, Tornado Cash was used to erase the link between the hacker and the stolen funds.
Crypto networks were built to resist any kind of censorship. This has been present since the dawn of blockchains and has given birth to Bitcoin, Ethereum, and hundreds of other blockchain projects. Banning them could never be fully successful as long as the last single node stands.
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