Paxful to Drop Ethereum Trading Due to Increased Centralization and Consensus Mechanism Pivot

Paxful, a New York-based, peer-to-peer (P2P) cryptocurrency trade, will drop Ethereum buying and selling from its platform on Dec. 22. Ray Youssef, CEO of the corporate, cited completely different causes for this resolution, with elevated centralization and the current consensus mechanism pivot amongst them. Youssef additionally acknowledged that tokens constructed on prime of Ethereum have been primarily scams.

P2P Exchange Paxful Drops Ethereum

Paxful, a New York-based, peer-to-peer cryptocurrency trade, has introduced that it’ll drop Ethereum from its platform. The announcement was made by way of electronic mail, after which utilizing social networks, by Paxful’s CEO Ray Youssef, who acknowledged that the adjustments the token has undergone lately have modified it right into a “digital type of fiat.”

Youssef defined that one of many first causes behind this motion has to do with the pivot that Ethereum executed, altering from a proof-of-work consensus mechanism just like the one Bitcoin additionally implements, to a proof-of-stake mechanism. Youssef defined that proof-of-work is the “innovation that makes Bitcoin the one sincere cash there may be.”

Another motive behind the choice has to do with the elevated centralization of Ethereum after this consensus change. Youssef acknowledged that Ethereum is presently managed by a small group of individuals and that it’ll turn out to be a permissioned community finally.

Scams and Criticism

Youssef additionally touched on tokenization and the way dangerous actors have taken benefit of the platform to commit scams utilizing Ethereum. He acknowledged:

The tokens that ETH has spawned have been scams which have robbed individuals of billions.

Furthermore, Youssef acknowledged that Paxful will all the time do “the correct factor,” even when that prices the corporate cash.

The statements made by Youssef brought about varied reactions on social media, with some customers criticizing the logic behind this resolution. When asked if the trade would turn out to be Bitcoin solely, Youssef answered that stablecoins issued on prime of Ethereum, like USDC and USDT, had actual use and so they couldn’t fully eradicate Ethereum from the platform as a result of customers must pay transaction charges. However, 94% of the trades on Paxful contain solely bitcoin, in accordance with Youssef.

Paxful was one of many exchanges that suspended their companies for Venezuelan customers on Sept. 2020 as a result of set of sanctions utilized by the U.S. authorities. The trade reported buying and selling volumes of $1.1 billion through the first half of 2020.

What do you concentrate on Paxful’s announcement about dropping Ethereum from its platform and the explanations behind this transfer? Tell us within the feedback part beneath.