‘Ethereum a Self-Assembled Ponzi Scheme,’ Says Berkeley Researcher

Skerry Technologies’ “Chief Mad Scientist” Nicholas Weaver calls Ethereum a “self-assembled Ponzi scheme.” Speaking to hosts Kailey Leinz and Matt Miller on Bloomberg Crypto, the crypto critic, and cyber security expert expressed strong opinions about several entities in the crypto space.

Criticizing the Ethereum network, Weaver claims that economically, it is a self-assembled Ponzi scheme. When asked about Ethereum’s transition to proof of stake, Weaver replies, “But proof of stake doesn’t solve Ethereum’s problems.”

So first of all, Ethereum has been promising proof of stake since it started. And it’s always been six months out. So wake me up when the transition happens.

The computer scientist adds that when looking at the throughput of the system, it is unaffected by the proof of work or proof of stake. Weaver explains that from a processing viewpoint, Ethereum’s process power is 1/5000th a little Raspberry Pi compute module and that shifting to proof of stake doesn’t solve that problem. According to him, it also creates another hardship ‘he who has the gold makes the rules.’

“Ethereum community has already shown that their mantra of ‘code is law’ is a lie. If you steal their money, such as the original DAO hack, they will change the code to steal it back. And switching to proof of stake literally says those who have the most money make the rules.”

Weaver, who is also a researcher at the International Computer Science Institute (ICSI) at UC Berkeley, believes that crypto, technologically, is not as innovative as people think it is. He claims that crypto mining burns up half of the world’s electricity and yet can only handle very few transactions. “The technology is so bad that I can only teach it to mock it.”