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Paxful Delists Ethereum Citing Lack of Decentralization

Author

Jonathan Gibson

Tags

Reading time

3 mins
Last update

Author

Jonathan Gibson

Tags

Reading time

3 mins
Last update

Author

Jonathan Gibson

Tags

Reading time

3 mins
Last update

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Paxful, one of the largest peer-to-peer (P2P) cryptocurrency trading platforms in the world, announced that it delisted Ethereum (ETH), the second most popular virtual currency in the world. The information was released by Ray Youssef, the founder of the platform, on Twitter a few hours ago. 

Paxful Delists Ethereum due to Decentralization Issues

In a recent tweet published by Ray Youssef, he explains that he has made a personal decision to remove ETH from their marketplace starting on December 22nd. Therefore, tomorrow, people and users on the Paxful platform would not be able to trade ETH anymore. But there are some reasons that he gave about the current situation. 

In the letter that he wrote, he explains that the biggest problem that the world is currently experiencing is related to an “economic apartheid.” The goal that he has is to see a world where Bitcoin frees billions of people that are held back by the current evil financial system, mostly located in the Global South. 

Youssef mentioned that the main reason to remove ETH from Paxful is related to the fact that ETH switched from Proof-of-Work (PoW) to Proof-of-Stake (PoS) earlier this year. This change in the consensus algorithm behind Ethereum has created criticism from multiple parties over the last few months. 

Meanwhile, Bitcoin (BTC), the largest cryptocurrency in the market, remains the Proof-of-Work king, which is seen by many as one of the main benefits of Bitcoin. 

The founder of Paxful wrote about this:

“ETH switched from proof-of-work to proof-of-stake. Proof-of-work is the innovation that makes Bitcoin the only honest money there is, whereas proof-of-stake has rendered ETH essentially a digital form of fiat.”

There are two more reasons in the letter that Youssef wrote. He mentioned that Ethereum is not decentralized and that is controlled by a small group of people. This is something that could create issues with this digital asset as a small number of entities could control the network, something that would render Ethereum a pensioned blockchain network. 

The other reason that he gave is that Ethereum’s blockchain network has seen the creation of multiple tokens and projects that ended up stealing billions in funds from people through scams. This has “stolen valuable momentum away from Bitcoin.” 

“In short, our industry is under attack right now – which means our responsibility to protect our users is greater than ever before,” he mentioned. “We are not perfect, but we’ll always do the right thing, even if it’s not popular, and even if it costs us money.” 

Ethereum has lost just 0.1% of its value in the last 24 hours, showing that there was not a large impact on the price of this virtual currency. Let’s not forget that the last few days have been hard for Bitcoin and other digital currencies. Bitcoin lost 5.5% of its value in the last 7 days, followed by 8.2% Ethereum and 8.8% Binance Coin (BNB). 

Will other projects and cryptocurrency trading platforms take similar measures against Ethereum due to their changes to a Proof-of-Stake consensus algorithm?