The expert points to proof-of-stake (PoS) networks like Ethereum for having the possibility of crashing like the infamous Terra.
Ethereum has come under fire from bitcoin maximalist and former MicroStrategy CEO Michael Saylor, who compared the network to LUNA, which tragically collapsed in May 2022. Notable crypto firms. Now, Saylor has pointed the finger at Proof-of-Stake (PoS) networks like Ethereum for having the potential to crash like the infamous Terra.
Will Ethereum Break like LUNA?
In a Twitter post, the former CEO of MicroStrategy highlighted that Ethereum is at risk of seeing a LUNA-level event. The argument was basically a comparison of bitcoin to other cryptocurrencies like Ethereum, which Saylor believes are unstable.
The tweet included a link to a YouTube video from Trader University explaining the Ethereum Blockchain and why there might be a problem with the PoS network. It highlights the fact that the Ethereum network relies on staked ETH to function, which at this point sees a lot of coins staked because there is no way to withdraw them.
However, Matthew R. Kratter points out that once the withdrawal code becomes available, and if the price of the cryptocurrency falls further, more users will be inclined to withdraw their coins.
At the end of the video, Kratter then calls for regulators to investigate PoS networks like Cardano and Ethereum, to determine if they are at risk of a “catastrophic implosion risk.” This is in an effort to prevent another event like the collapse of LUNA.
Saylor then compares the network to bitcoin in his tweet, saying, “Bitcoin is engineered to be stable, robust, and increasingly secure & efficient over time based on Proof of Work and ASIC technology advances.” He further states that “Proof of Stake protocols are inherently unstable, inefficient, opaque, and risky due to their fragile design,” he added.
Drawing the Wrath of the Followers
Michael Saylor has always been a vocal bitcoin maximalist, preferring the pioneering cryptocurrency over all others in the space, despite its performance. This is not the first time Saylor has criticized Ethereum, but his most recent attempt has drawn the wrath of ETH supporters.
A user points to MicroStrategy’s bitcoin investments that were made under his leadership. At current prices, the company is experiencing unrealized losses on its BTC holdings, so a similar investment in ETH would have resulted in a profit for the company, as well as passive income, if the coins were staked.
However, Saylor remains a staunch supporter of bitcoin, and his Twitter page is proof of that. One of his most recent tweets includes an image of a bitcoin light bulb with the caption “Bitcoin is Eternal Light.”
By Audy Castaneda
