Ethereum Premine Debate On Fairness, Regulation, and Centralization
When it comes to Ethereum the biggest drawback is Ethereum’s Premine. For many pre-mine is the biggest hurdle that would keep the Etehreum away from being decentralized. A pre-mine is illegal and unethical activity. That supports some influential people over others in a political fashion. Pre-mines have also created issues for the Ethereum in past and it would be a dilemma in the future as well.
Many crypto experts including Bitcoin analysts and consultant Gigi quite frequently argued that Ethereum’s pre-mine is the key reason why the crypto blockchain company would never be decentralized as Bitcoin (BTC). Experts have also added that pre-mine is also a reason why Ethereum would always be controlled by some influential people. These people might be politicians, regulators, or financial sector tycoons. These people are also a reason that Etehreum is considered the most stable cryptocurrency company. In addition to that, experts have also said that premise is similar to an initial coin offering (ICO), thereby putting Ethereum potentially under security from the US Securities and Exchange Commission.
However, on the other hand, Etehreum officials, developers, and the cryptocurrency community have denied all these allegations. They further said that the 2014 pre-mine does not have any impact on the company’s decentralization vision. They also referenced Ethreum’s distribution by saying that cryptocurrency was distributed to thousands of people. As of this writing, the Ethereum’s (ETH) community also voiced that the platform’s move towards PoS won’t diminish it’s decentralization possibility.
While critics have been saying that Ethereum’s premise sale risks regulatory repercussions for the platform. The claim that Etehreum offered tokens to a selected group of people is the biggest reason that regulators are skeptical of trusting Ethereum as of now. On the other hand, data shows the same. It has been concluded that 40% of Ethereum (ETH) tokens are being sold to only 100 purchasers. This offering itself is an illegal security offering, that’s the reason that Etehreum faced strict regulatory action after the launch of its first ICO back in 2014. Gigi, the Bitcoin expert, at that moment of time was the only individual who said that premise sale likely presents ETH as security. He also added that “First, the ICO can be classified as a security offering and the ether tokens as securities.”
On the other to defend its decentralization vision, the Ethereum officials provided two counter-arguments against these reasons. They said that at the time of the initial coin offering (ICO) there were over 10,000 different virtual addresses that have participated in the ICO. This shows that there was a large number of users who were awarded the coins. It is almost impossible to select desired people to be aware of the coins.
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