Centralized Stablecoins Could Be a Significant Decider Of The Contentious Ethereum Hard Fork In Future

by | Aug 14, 2022 | Market, Market News, News | 0 comments

Like the other blockchain networks, Ethereum is also focusing on improving and updating its technology. A hard fork is one of the crucial concerns for every crypto network. Ethereum is expected to get controversial future hard forks due to stablecoin issues. The co-founder of Ethereum, Vitalik Buterin stated that stablecoins like Tether (USDT) or USD coins (USDC) could be a major determinant of the contentious Ethereum hard fork in the future.

What Is Hard Fork?

A hard fork takes place when a fundamental change of the protocol in a blockchain network works on two separate versions. Mainly, one network follows the previous version and another one pursues the previous version of the blockchain. When any update occurs, a hard fork is the greatest concern to consider.

Vitalik’s Concern On Ethereum’s Future :

On August 3, at the BUIDL Asia conference in Seoul, Buterin and the co-founder of the Near Protocol (NEAR), Illia Polosukhin discussed the merger of Ethereum. In that program, Buterin revealed his concern about the future hard fork which could be manipulated by the centralized stablecoins in the network.

Buterin said that after the merger, users will get two separate networks. Then they will have exchanges, oracle suppliers, and also, stablecoin suppliers. That time they have to decide which one they would ‘respect’ or give importance to. As both networks will have 100 billion USDT each. According to Buterin, they need to stop respecting one of them (Tether).

Though the co-founder of Ethereum did not get any ‘indication’ that the debate will be an issue of the upcoming Ethereum merger. But he anticipated that the stablecoins could affect Ethereum in the future.

Buterin said, “The fact USDC decides which chain to consider Ethereum could be a crucial decider of a controversial hard fork in the future.”

The co-founder’s statement brought the Ethereum users into a new concern. Though the anticipation raised a question mark on the centralized stablecoins position.

Anticipation And Suggestion :

Vitalik Buterin further assumed that within the next 5 to 10 years Ethereum could see more contentious hard forks along with several centralized stablecoins providers. This forecast is another worry of the network users. Vitalik thinks it could weaken the Ethereum foundation and ETH2 clients would be more powerful. Rather, someone like Coinbase will handle the stablecoins.

Vitalik further suggested to the Centralized players. He advised them to choose between different stablecoins. Also, encouragement to adopt various stablecoins would be required. He believes users can go with USDC and also DAI. There is no surety of the tendency to use centralized stablecoins. But it hopes something like DAI which says, “we are not a purified crypto economy, covers a whole bunch of real-world assets.”

Vitalik again raises a new sensation in the market through his statement regarding stablecoins. These centralized stablecoins are now treated as the destiny of the Ethereum hard forks. Where the blockchain network could be manipulated. But the upcoming merger will not be affected by the controversy as Vitalik expected.

About The Upcoming Merger :

The upcoming merger is going to be a significant technological enhancement for the Ethereum blockchain in the last few years. It would merge into two remarkable transitions. The blockchain would be transited from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. This merger is going ahead following the successful integration of the Georli test net that will take place in the mid of August this year. The upcoming merge will occur the next month September 19 as the team is expected. Now, this merge becomes a focused project for the Ethereum blockchain. While the further future is in the hands of the centralized stablecoins as Vitalik anticipated.