Ethereum: USD/ETH (ETH=) The main reason ProgPoW is so contentious is because it just is. Here’s why

Ethereum: USD/ETH (ETH=) The main reason ProgPoW is so contentious is because it just is. Here’s why

ProgPoW is a somewhat contentious Ethereum improvement proposal to implement an ASIC-resistant mining algorithm. Now a new petition against ProgPoW is circulating. Dubbed EIP 2538, the petition carries high profile signatories from projects including Uniswap, ConsenSys, Truffle Suite, MakerDAO, Synthetix, Gnosis and many more.

The reason ProgPoW is so contentious is, in short, because it is.

ProgPoW in brief

Ethereum plans to transition from proof of work (PoW) to proof of stake (PoS) in the near-ish future. This has proven to be a very technically complex undertaking. It’s also socially complex, with people being worried about miners opposing the transition.

Miners have good reasons to oppose the change, as a shift to proof of stake would destroy their source of income.

But for the fork to go ahead smoothly, miners need to be on board. As the actual operators of the Ethereum network, the success of the fork is dependent on miners willingly making the conversion.

If they split, and some agree to update and others refuse to update, you can get a hard fork like what happened with Bitcoin and Bitcoin Cash… or, you know, like Ethereum and Ethereum Classic.

One of the main justifications given for the ProgPoW fork is the argument that if you go into the PoS transition with ASIC-resistance, your mining infrastructure is more decentralised and therefore there’s a better chance of it all going smoothly.

Metacontention

ProgPoW was proposed in part because people were worried the shift to PoS would be contentious. But critics of the proposal point out that ProgPoW is itself quite contentious, and there aren’t really any solid, provable reasons for it to go ahead.

So the main argument in favour of ProgPoW is that it could help unify the Ethereum community in the face of a contentious update. The main argument against ProgPoW is it’s a contentious update.

“Because Ethereum is a global platform with a large and diverse group of stakeholders, it is critical that major changes to the protocol have a clear purpose and broad support. EIP-1057 [ProgPoW] clearly lacks that support, yet activation is still being considered,” the petition reads.

“A stated goal of ProgPoW is to avoid contentious forks while transitioning to proof-of-stake, yet it is at odds with its own aims if activation increases the likelihood of that undesired outcome.”

On the one hand, this makes perfect sense. On the other hand, it wouldn’t be contentious if ProgPoW opponents would just get on board with it, so using that contentiousness as a reason to oppose ProgPoW is circular logic at its best.

Of course, there are other, more valid, reasons why ProgPoW is so contentious.

Why ProgPoW is contentious

One factor being named in opposition to the ProgPoW fork is the fact that Ethereum already has measures to help ensure smoother sailing during the transition from proof of work to proof of stake, such as the difficulty bomb.

  • What’s the difficulty bomb? This is like a gradually exploding bomb which increases mining difficulty over time. The effect of this is degraded blockchain performance and decreased miner profits.If left unchecked, the bomb explodes enough for Ethereum to enter a so-called “ice age”, where the blockchain is functionally frozen, mining is completely unprofitable and everything basically dies. The idea is that, with the difficulty bomb hanging over their heads, miners have no reason to oppose the shift to proof of stake, and the community itself is nicely unified against the looming spectre of imminent death.The difficulty bomb was exploding a little too fast though, so it’s been delayed on multiple occasions, most recently in December 2019.

As the argument goes, ProgPoW is an unnecessary cost and unnecessary risk with no clear benefits, and in that light it is simply an objectively bad decision. Other reasons for opposing ProgPoW veer a little closer to conspiracy theories.

For example, there are allegations (but not much evidence) that NVIDIA funded the team responsible for developing ProgPoW in an effort to make big bucks selling GPUs to Ethereum miners. Of course, these can be equally countered by arguing that existing miners have a financial incentive to try to oppose ProgPoW any way they can, even if that means lying on the Internet.

The most solid argument against ProgPoW is simply that there’s little reason to believe it will accomplish anything except replacing one special interest group with another. With no reason to do it, and some reasons not to do it, the smart thing is to not do it.

Opinion: Don’t go with your gut, unless it says to

The main reason ProgPoW is so contentious, and will continue to be contentious, is because there is no right answer. There are no clear and obvious answers to all the pros and cons of GPU vs ASIC mining, and trying to look for a rational decision just takes you in circles.

In fact, if you look at the responses to any ProgPoW polls, you will see that about 99% of responses fall into one of two categories:

  1. The respondent personally stands to gain or lose something. For example, they have a garage full of GPUs just itching to mine some ETH.
  2. The respondent’s opinion is purely emotional.

The emotional responses are mostly pro-ProgPoW, because people just don’t like ASIC miners. There’s always going to be that perception that ASIC miners came along and took their jobs ruined everything, so a lot of people will mostly lean towards screwing them when given the chance. ProgPoW is seen as an opportunity to do exactly that, so it will naturally pick up a solid foundation of support.

But what does this mean for the debate?

On the one hand, the emotional nature of the argument means a lot of people aren’t going to be changing their minds, so the issue will continue rankling until ProgPoW goes through, regardless of any rational arguments for or against it. As such, it may be best to just rip off the bandage and be done with it.

On the other hand, that doesn’t seem like a sound foundation for good decision-making, and most parenting books advise guardians not to reward tantrums.

But most importantly, there’s just not a solid level of majority support for ProgPoW. Different polls show different results, but it’s looking like maybe 55% to 45%, or 60% to 40%, in favour of ProgPoW.

It doesn’t matter that one side has a simple majority. When the numbers are that close, the decision will always be controversial and going through with it will always be inviting trouble.

Going through with ProgPoW might be the only way to finally end the debate. But if the worst consequence of not going through with ProgPoW is that there’s too much debate, that’s a pretty good outcome.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 254.05.

The projected lower bound is: 191.01.

The projected closing price is: 222.53.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 16.2144. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 12 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 44.43. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 8 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -222.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 11 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 7 period(s) ago.

Rex Takasugi – TD Profile

FOREX ETH= closed down -2.970 at 220.890. Volume was 8% above average (neutral) and Bollinger Bands were 50% wider than normal.

Open     High      Low     Close     Volume___
223.550 228.500 209.270 220.890 153,278
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 255.52 204.13 177.87
Volatility: 99 89 76
Volume: 331,738 203,343 98,588

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX ETH= is currently 24.2% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of ETH= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on ETH= and have had this outlook for the last 52 periods.

#eth news#ethereum#ethereum forecast#ethereum news#ethereum techncial analysis#investing#shayne heffernan#trading#usd/eth