Sigh... it was only a couple of weeks ago when the entire crypto ecosystem was holding their breath for the upcoming Ethereum Merge that was due to take place in the middle of September... and all the eyes were on how and if the technical aspects would hold up. It was essentially just an issue of if the change from Proof of Work to Proof of Stake would be disruptive from a technical point of view.

... then there appeared talk about a potential breakaway Proof of Work chain that would be powered by rogue miners and opportunistic "supporters" which looked more and more like a cash grab and dump on unsuspecting retail traders and novices. It was quite clear that pretty much every project that had either value or reputation was going to move to Proof of Stake, and that would leave the Proof of Work chain dead on arrival. Although, it would be an interesting little natural experiment as various tokens would plummet to zero immediately... and the ensuing chaos and unraveling of duplicated DeFi protocols would be nice to watch... from a distance!

And with the last week... came the HUGE news that OFAC (the US Office for Foreign Asset Control) designated the smart contracts of Tornado Cash (an Ethereum mixer... and interestingly enough, only the Ethereum contracts were designated) as sanctioned entities. Now... the move itself was odd... as smart contracts aren't really entities... but it did have huge shockwaves throughout the entire Ethereum ecosystem as many addresses suddenly got blacklisted by association... either wittingly or as unwitting recipients of dusting attacks.

Anyway... the legality and wisdom of this move is something that will have to be sorted out eventually. But there is a more pressing issue... in that there are many exchanges and projects on Ethereum that MUST comply with OFAC sanctions.... and at the moment, they hold the majority stake of Ethereum.

With Ethereum moving to a Proof of Stake consensus, that means that majority of validators will be forced to comply with OFAC sanctions... which is the equivalent of financial censorship... which is one of the core tenets that cryptocurrencies and the cipherpunk movement holds dearest. With the Merge only weeks away... this leaves the Ethereum community in a pretty large pickle. Will the minority begin slashing the majority stakers... many of whom are just staking customer funds... will there be a consensus split between the OFAC compliant and the non-compliant?

This appears to be a battle for the spirit and future direction of not only Ethereum but all cryptocurrencies. And lets not kid ourselves, if any particular chain is not going to be target for sanctions... then it is because it just isn't worth it at the moment. This is a battle for privacy and the right to privacy.... not because we are terrorists or funding bodies for terrorism, but because there is something fundamentally wrong with a surveillance state (and I am by no means a anti-government person). There is nothing wrong with government... but there should be clear lines of what is and what isn't acceptable. One of which should be that a superpower SHOULD NOT impose their sanctions in such a haphazard and irresponsible way that damages the core right to privacy.

Anyway... when the Merge comes. Who will choose the decentralised validators? And who will choose to park with exchanges and OFAC compliant pools? I am by no means a fighter or a revolutionary... but I am a gentle idealist. Although it is more convenient to stake with exchanges or otherwise... I will be moving my stake behind non-compliant pools.

By all means, chase down terrorists and rogue states... but not by removing everyone's right to privacy in a blanket fashion.

I can also be found cross-posting at:
Hive
Steem
Publish0x

Handy Crypto Tools

Ledger Nano S/X: Keep your crypto safe and offline with the leading hardware wallet provider. Not your keys, not your crypto!
Binance: My first choice of centralised exchange, featuring a wide variety of crypto and savings products.
GMX.io: Decentralised perpetual futures trading on Arbitrum!
Kucoin: My second choice in exchanges, many tokens listed here that you can't get on Binance!
FTX: Regulated US-based exchange with some pretty interesting and useful discounts on trading and withdrawal fees for FTT holders. Decent fiat on-ramp as well!
MXC: Listings of lots of interesting tokens that are usually only available on DEXs. Avoid high gas prices!
Huobi: One of the largest exchanges in the world, some very interesting listings and early access sales through Primelist.
Gate.io: If you are after some of the weirdest and strangest tokens, this is one of the easiest off-chain places to get them!
Coinbase: If you need a regulated and safe environment to trade, this is the first exchange for most newcomers!
Crypto.com: Mixed feelings, but they have the BEST looking VISA debit card in existence! Seriously, it is beautiful!
CoinList: Access to early investor and crowdsale of vetted and reserached projects.
Cointracking: Automated or manual tracking of crypto for accounting and taxation reports.
Poloniex: One of the older regulated exchanges that has come into new ownership. I used to use it quite a lot, but have since stopped.
Bitfinex: Ahhh... another oldie, but a goodie exchange. Most noted for the close affiliation with USDT and the Basic "no-KYC" tier!