Changpeng Zhao, CEO of the world’s largest crypto exchange Binance, said that Ethereum’s (ETH) transition to a proof-of-stake (PoS) consensus mechanism is a move in the right direction. But he said it wasn’t “something life-changing”. Here are the details…
Zhao comments on ETH and merge update
Zhao said in a recent Crypto Banter interview that Ethereum’s revolutionary change will be to lower transaction costs and increase its scalability through sharding. Zhao used the following statements:
I think [Ethereum’s transition to PoS] is very important. But I don’t think this is a radical change. There are other Blockchains that already have PoS. There are other Blockchains that are staking, deflationary… I think all of these are important. But it’s not like something earth-shaking. But it’s definitely heading in the right direction. I think it will be groundbreaking when fees come down, sharding kicks in. This is a much more difficult problem to solve.
There are misunderstandings about PoW
Sharding is the process of splitting the Ethereum infrastructure into smaller pieces called shards to distribute the load and increase the scalability of the Blockchain. Binance CEO also comments on the proof-of-work (PoW) consensus mechanisms that Bitcoin (BTC) currently uses. According to Zhao, there is a lot of “false information” surrounding PoW models. Zhao uses the following expressions:
I think PoW is fine. I think all these ‘Bitcoin is not energy efficient’, ‘uses too much energy’ criticism is purely misinformation and misunderstanding. This is because we can measure the amount of energy Bitcoin uses. But if you try to measure the amount of energy banks use, buildings to manage a trillion-dollar asset in city centers, they’ll say ‘there’s no more efficient way than this’. Banks spend much more energy on electricity alone. The expense they use to manage their assets is much higher than that of Bitcoin.
CZ backs MicroStrategy’s Bitcoin purchase
Meanwhile, CZ also commented on the recent acquisition of a company famous for its Bitcoin purchases. According to Michael Saylor, chairman of Microstrategy, his company recently purchased 301 Bitcoins for $6 million at an average price of $19,851 per coin. Saylor detailed that the company currently has 130,000 Bitcoins on its balance sheet.
Binance CEO also quoted Michael Saylor’s tweet explaining the issue. It was clear that CZ supported the MicroStrategy acquisition by saying “save this tweet”. CZ’s tweet included the following statements:
Skeptics today will say a few years later, ‘You’re so lucky you got Bitcoin so early. Save this tweet. It is not financial advice.
https://twitter.com/cz_binance/status/1572351500097302530
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