V. Buterin: "Minners can lost their business due to POS"

Vitalike Buterin shared his thoughts on the current state of cryptocurrencies world
11 September 2017   953

Vitalik Buterin, creator of Ethereum, one of the most popular person in cryptocurrency world, recently gave an interview for a Russian issue "Commersant".

When we will migrate to the Proof-of-Stake protocol, even at the first stage the need for mining will drop dramatically. Proof-of-Stake uses an algorithm that doesn't require large number of computers constantly make calculations. This is an algorithm where a coin is used inside the platform itself. The consensus will become much cheaper and safer. And in fact, miners can lose their business.
 

Vitalik Buterin
Creator of Ethereum

Vitalik also reported about the risks for cryptocurrency owners.

The biggest risk is financial. Much is said about this and I am no exception. The market is very volatile now. This affects both large crypto-currencies and ICO-projects. A bubble can burst at any moment, and projects can lose a lot of money at once. 
 

He also believes that there are risks in the fact that interest to the blockchain is growing too fast, because the technology itself is not yet ready to accept all this interest. 

This situation has now developed with bitcoin. There are not enough room in the blockchain, it's becoming more and more difficult to use, the commissions are growing. In Ethereum, it [the commission] is still less than one cent. We do not intend to divide the ETH, as it was done with bitcoin, it is not necessary, but the risks still remain.
 

Vitalik Buterin
Creator of Ethereum

In addition, according to Buterin, the risk remains high for fraud.

Any technology can be used for bad purposes. And ours, unfortunately, too - no matter how much we wish this would not happen. We can not guarantee 100% security.
 

Vitalik Buterin
Creator of Ethereum

Looking into the foreseeable future, Buterin believes that the types of fraud associated with using other people's data will be relevant, when one person impersonates another. This kind of fraud, he says, is practically ineradicable and will live for a very long time.

There are also new types of fraud, for example, related to competencies.

So, companies that issue smart contracts can issue a contract with a deliberate code error that allows them to withdraw all the money. Such a case was recently recorded in our community. And it's good that this happened on a small scale - this allows us to learn and set ourselves the task of minimizing such risks.
 

Vitalik Buterin
Creator of Ethereum

Additionally, Vitalik notes the growth of fraud in the ICO market, when fraudsters give out a fake ICO for a real project with the help of fake sites, collecting several thousand dollars from investors and disappearing in an unknown direction. 

'Kodak Miner' Turned Out to be a Scam

KashMiner by Spotlite USA was promoted as Kodak branded bitcoin miner 
17 July 2018   143

The KashMiner bitcoin miner, exhibited at the Kodak stand during the CES technology show in Las Vegas, was in fact a product designed to mislead potential consumers and with a potentially unattainable potential return. This is reported by BBC.

Spotlite USA is licensed by Kodak's lighting division, which allows it to use the famous brand in its products. In January 2018 the company introduced its miner and announced that it intends to lease it. According to its business plan, potential users had to pay a commission before getting the device. It was expected that after depositing $ 3,400, the customer will receive a device that will allow him to easily cover expenses and receive revenue from bitcoin mining.

However the company did not have an official Kodak license to use the brand in the production of mining equipment and initially overstated the indicators of the potential profit of its device, refusing to take into account the growing complexity and costs of bitcoin mining. The advertising materials reported that KashMiner brings $ 375 a month, which, subject to a 2-year contract, would allow the client to receive $ 5,600 of profit after paying a commission. Experts from the industry of cryptocurrency call this offer a scam.

There is no way your magical Kodak miner will make the same $375 every month.
 

Saifedean Ammous

Economist

CEO Spotlite USA Halston Mikail previously reported that he plans to install hundreds of miners at the headquarters of Kodak. According to him, he already managed to place 80 miners there, but the Kodak spokesman denied this information.

While you saw units at CES from our licensee Spotlite, the KashMiner is not a Kodak brand licensed product. Units were not installed at our headquarters.
 

Kodak Spokesman

In a phone call with the BBC, Spotlite's Halston Mikail said the US Securities and Exchange Commission (SEC) had prevented the scheme from going ahead.