Is Ethereum Proof of Stake Sustainable? — Considering from the Perspective of Competition Among Smart Contract Platforms

30 Pages Posted: 26 Sep 2023

See all articles by Kenji Saito

Kenji Saito

Waseda University; Keio Research Institute at SFC, Keio University

Yutaka Soejima

SBI Financial and Economic Research Institute

Toshihiko Sugiura

SBI Financial and Economic Research Institute

Yukinobu Kitamura

Rissho University, Data Science Department; Hitotsubashi University - Institute of Economic Research

Mitsuru Iwamura

Waseda University - Graduate School of Commerce

Date Written: September 7, 2023

Abstract

Since the Merge update upon which Ethereum transitioned to Proof of Stake, it has been touted that it resulted in lower power consumption and increased security. However, even if that is the case, can this state be sustained?

In this paper, we focus on the potential impact of competition with other smart contract platforms on the price of Ethereum’s native currency, Ether (ETH), thereby raising questions about the safety and sustainability purportedly brought about by the design of Proof of Stake.

Keywords: Proof of Stake, Blockchain, Cryptocurrency, Smart Contract, Competition

JEL Classification: B31, E42, E51

Suggested Citation

Saito, Kenji and Soejima, Yutaka and Sugiura, Toshihiko and Kitamura, Yukinobu and Iwamura, Mitsuru, Is Ethereum Proof of Stake Sustainable? — Considering from the Perspective of Competition Among Smart Contract Platforms (September 7, 2023). Available at SSRN: https://ssrn.com/abstract=4564717 or http://dx.doi.org/10.2139/ssrn.4564717

Kenji Saito (Contact Author)

Waseda University ( email )

1-6-1 Nishiwaseda, Shinjuku-ku
tokyo, 169-8050
Japan

Keio Research Institute at SFC, Keio University ( email )

5322 Endo
Fujisawa, 252-0882
Japan

Yutaka Soejima

SBI Financial and Economic Research Institute ( email )

Izumi Garden Tower 19F
1-6-1 Roppongi, Minato-ku
Tokyo, 106-6019
Japan
+81362291001 (Phone)

Toshihiko Sugiura

SBI Financial and Economic Research Institute

Yukinobu Kitamura

Rissho University, Data Science Department ( email )

Magechi 1700
Kumagaya, Saitama 3600194
Japan
+81485391426 (Phone)
+81485362522 (Fax)

Hitotsubashi University - Institute of Economic Research ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8306
Japan
81425808394 (Phone)
81425808394 (Fax)

Mitsuru Iwamura

Waseda University - Graduate School of Commerce

1-6-1, Nishi-Waseda
Shinjyuku, Tokyo, 169-8050
Japan

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