ETHPoW Fork is BS, but Exchanges Should Still List It
Coinbase has announced it is considering listing forked Ethereum chains after the merge. This comes as a ray of hope for some, and infuriating news for others. The truth is, however, whether or not Coinbase or any other exchange lists ETHPoW will not affect the success of the forked chain.
What is ETHPoW?
ETHPoW, or Ethereum Proof of Work, is a proposed fork of the Ethereum chain that will take place after the Ethereum Proof of Stake Merge. The idea is to keep a version of Ethereum that uses the Proof of Work (PoW) consensus mechanism after the main Ethereum chain switches to the Proof of Stake (PoS) consensus algorithm.
The miners behind the PoW fork have rightly been called out as being primarily motivated by “making a quick buck”. Once the merge and fork happen, there will be two chains where wallets have the same balance. So if a wallet currently holds 1 Ether, that same wallet will have 1 Ether on the PoS chain and 1 Ether on the PoW chain — essentially doubling their Ether! In order for this doubling to matter, though, the Ethereum on the PoW chain needs to be worth something. That, and the desire to keep their mining equipment producing value, is what is motivating miners to fork Ethereum after the merge. It sounds like a solid plan, but it won’t work — even with Coinbase’s support.
Proof of Won’t Work
News of the proposed fork has generated much more buzz than it deserves. ETHPoW will likely have some non-zero USD value, but it will quickly dissolve into irrelevance. The reason we can be confident of this is because it has happened before.
If you are familiar with the crypto space, you have likely heard of Ethereum Classic (ETC). Ethereum Classic is a fork of Ethereum that came about after the 2016 hack of The DAO, which resulted in a loss of $60 million. After the hack, the Ethereum Foundation decided to fork Ethereum to return the blockchain to the state before the hack occurred. This caused a heated debate in the developer space which led some to remain on the pre-fork chain. There is a strong argument that ETC loyalists were correct in their position. Blockchain is meant to be a decentralized ecosystem, and decentralization is lost if a central foundation can just decide to fork the chain when something unpleasant happens. Nonetheless, ETC is essentially irrelevant. Even though it is listed on just about every exchange (including Coinbase), its market cap is around $5Billion while ETH has a market cap of $190Billion. Ethereum Classic, though arguably correct in its principles, has lost that battle. ETHPoW will almost certainly face the same fate.
What will (Probably) Happen
It is likely that the PoW fork will happen, people will liquidate their ETHPoW where they can, and the PoW fork will be an ecosystem of only miners with no compelling DApps and no real users. Coinbase listing ETHPoW will only allow people to sell it faster, accelerating its fall. To make matters worse for PoW, many decentralized exchanges and applications will no longer work except on the Ethereum PoS chain.
Why Coinbase Should List ETHPoW
Either way, Coinbase and other big exchanges should list ETHPoW. The blockchain space values decentralization and having an open marketplace of ideas. Choosing winners violates those core ideals. Allowing ETHPoW a fair shot will not disrupt the success of the PoS chain any more than ETC has disrupted Ethereum.
Kicking ETHPoW out of the marketplace of ideas sets the precedent that this space is not decentralized. It also gives PoW maximalists an excuse as to why their chain failed. If the chain is given fair access and fails then there is no debate to be had. But if the chain is blocked, even though it is a bad idea, its supporters will forever call foul.
It is better to let the marketplace of ideas, rather than giant corporations, decide ETHPoW’s fate.
