Bitcoin developer says PoS rewards aren't 'returns', Vitalik retorts

Buterin responded to criticism by saying that PoW-based mining rewards are not much different from the PoS system, however, Wertheimer did not quick to point out the differences.

Indie developer and Bitcoin promoter Udi Wertheimer created a buzz on Crypto Twitter earlier Monday after claiming that a proof-of-stake (PoS)-based performance reward system for staking is more of a penalty for non-participants. /p>

Wertheimer, who is a well-known Ethereum critic, believes that the PoS staking reward system is not exactly a performance reward. In PoS staking, a user cannot do anything with their staked ETH, while those who do not stake their tokens and participate in other network activities are not rewarded.

With theEthereum Merge just a few days away, the sneakiness of the PoS system didn't really sit well with the Ethereum community, including co-founder Vitalik Buterin.

Buterin responded to Wertheimer's criticisms by saying Bitcoin mining isn't much different from PoS staking, because proof-of-work (PoW) mining "penalizes anyone with a percentage of hash power lower than its parts supply percentage".

And PoW penalizes anyone with a lower hash power percentage than their coin supply percentage ☺️

(Actually, it penalizes a lot more than that because profit < income, but you get the idea)

Wertheimer was quick to remind Buterin that miners and holders are two different sets that do not necessarily overlap in the PoW ecosystem, while the same cannot be said for the PoS system. He further explained that with liquid staking, holders and stakers could be expected to overlap due to the loophole in the reward system.

Related: Ethereum Merger: How Will the PoS Transition Impact the ETH Ecosystem?

Another user claimed that t...