The upgrade on Ethereum from the PoW to PoS mechanism has attracted large criticisms from many investors today. Some have considered it a march towards centralization while others see it as giving more room for minting new coins to exceed the total supply. A notable critic of the Ethereum transition to PoS has been the CEO and co-founder of Paxful – a popular crypto exchange platform regulated in the US today. This has led to his decision to remove Ethereum from the list of coins exchangeable on the platform.
This move has not been well received by many crypto traders today. Thus, many would consider it as stifling interest in buying Ethereum (ETH) today while others see it as an attack on all the cryptocurrencies using the PoS mechanism. Can the market withstand this shock? What impacts will this have on the prices of Ethereum? This work has addressed these important questions on the removal of Ethereum from Paxful marketplace.
Why is Paxful deleting Ethereum from its platform?
The CEO of Paxful has given four important reasons why he decided to remove Ethereum from the platform.
Security of users:
Addressing the 11.6 million users of the platform through his tweets on Twitter, Youssef stated that the security of humans and integrity over revenue was more important than any other thing else.
Preference for the PoW as the most reliable:
Speaking on the Ethereum transition to the proof-of-stake mechanism, Youssef stated that the proof-of-work (PoW) mechanism has been the innovation that makes Bitcoin the only reliable money so far. Hence, Ethereum lost the mark by moving to utilize the PoS mechanism which has made it less reliable and now to be considered as a digital form of fiat.
March towards Centralization:
With the transition to the PoS mechanism, Youssef believes that Ethereum has now become fully centralized and now allows the tokenization of assets which he considered a promoter of scam and fraud across the crypto industry today. He argued that many tokens that were established on the Ethereum blockchain had been scams that robbed people of billions of dollars in the market.
Support for self-custody:
Speaking on the way forward, Youssef rather called for crypto users to embrace self-custody for their digital assets and embrace Bitcoin as the only true money there is in the crypto industry.
What effects will the removal of Ethereum from Paxful have on the price of this coin?
The removal of Ethereum from the Paxful exchange platform is one likely to impact negatively on the performance of Ethereum in the market. This is believed to be the case based on the limitations it will place on users who hitherto preferred to buy Ethereum using the Paxful platform alone.
Added to this, the strong criticisms given to Ethereum by the CEO of the platform as the major reasons for removing Ethereum from the platform is one that will likely discourage some investors from investing so much into Ethereum again. Thus reducing the capital inflows into Ethereum needed to push the coin to greater heights during the next bull run.
Is Ethereum still worth investing?
Ethereum today still retains the status of the second most valuable Cryptocurrency in the world. A lot of investors believe that the transition to PoS mechanism is more of an advantage to this coin as it has increased its scalability and reduced the cost of transacting on its blockchain. Hence, many suppose that this coin still has the potential to rise further and create new highs in the market again.