Korbit Research Center "Proof-of-Work Ethereum Has High Survival Potential in Case of Hard Fork"

[Photo by Kobit]

[Asia Economy Reporter Lee Jung-yoon] The Kobit Research Center, under the domestic cryptocurrency exchange Kobit, has released an analysis indicating that the ETHPow, an Ethereum chain based on the Proof of Work (PoW) consensus mechanism, has a high likelihood of survival if it undergoes a hard fork.

On the 5th, the Kobit Research Center announced the publication of a report titled "Does the ETHPoW Chain Have Economic Value?" which analyzes the economic value of the ETHPoW hard fork. Ethereum is scheduled for the Merge upgrade on September 19, which will transition the network from the existing Proof of Work mining method, based on computer calculations, to a Proof of Stake (PoS) system where holders receive a proportional share. A hard fork refers to the process in blockchain-based cryptocurrencies where a new currency splits off.

This report focuses on examining the arguments for and against the economic value of the proposed hard fork of Ethereum by miners who wish to maintain the existing Proof of Work method ahead of the Ethereum Merge upgrade.

According to the Kobit Research Center, the mainstream Ethereum community, centered around the Ethereum Foundation, denies the value of the ETHPoW hard fork. Their rationale is that the most widely used fiat-collateralized stablecoins, Tether (USDT) and USDC, have announced their support for the Proof of Stake chain.

Another argument is that if USDT and USDC on ETHPoW lose their value, decentralized finance (DeFi) services based on them would struggle to operate normally, potentially leading to a collapse in value. Furthermore, maintaining and updating applications (apps) running on Ethereum requires a certain level of development resources, and project teams with limited resources are more likely to choose the Proof of Stake chain over the Proof of Work chain.

On the other hand, proponents who recognize the value of the ETHPoW chain, such as Kevin Jo, founder of the cryptocurrency hedge fund Galois Capital, explain that the Proof of Work-based Ethereum chain has a long history of stable operation, and users who prefer the status quo may remain. They also argue that those concerned about centralization and security issues in the Proof of Stake-based Ethereum may prefer the Proof of Work chain.

Finally, they point out that there are many chains, such as Terra Classic (LUNC) and Ethereum Classic (ETC), which maintain a certain scale of value despite relatively poor network conditions.

Based on these perspectives, the Research Center concluded that if the Proof of Work camp proceeds with the hard fork, it is likely to survive. Jeong Seok-moon, head of the Kobit Research Center, stated, "Most existing Ethereum apps will lose value on the Proof of Work chain, but a very small number of apps may succeed in surviving. If so, they will generate a level of transactions sufficient to sustain the value of the Proof of Work hard fork chain." He added, "Whether the Proof of Work hard fork camp can complete the necessary technical preparations before the mid-September Merge schedule is a critical variable at this point."

This content was produced with the assistance of AI translation services.