PoW Mechanism Punishes Miners with Lower Hash Power – Says Ethereum Co-Founder Vitalik Buterin

Many analysts and experts pass comments on Proof-of-Work and Proof-of-Stake mechanisms about their mining profitability. Recently, the Co-Founder Vitalik Buterin argued that the PoW mechanism is currently punishing miners with lower hash power. 

PoW Hash Power Declines

The merge from PoW to the PoS mechanism will greatly impact miners as the hash power of Proof-of-Work (PoW) continues to decline. Although the PoS promises better energy efficiency and better output, the Proof-of-Stake consensus mechanism and Proof-of-Work consensus mechanism have become the main topic for experts and analysts for a long time. 

Some PoW proponents have started to outline flaws in the PoS mechanism. Vitalik Buterin recently gave a counterargument to these statements about PoS. Udi Wertheimer, a popular bitcoin org bitcoin org - Event OrganiserTechnologyPayment solution  atheist and former blockchain research lead at Colu, Udi Wertheimer, pointed out some issues about the PoS mechanism through Twitter. According to Wertheimer, PoS does not provide rewards to stakers; instead, PoS forces users to stake. Wertheimer argued that PoS’s reward to stakers is a way of punishment.

The Co-Founder of Ethereum, Vitalik Buterin Vitalik Buterin   Vitalik Buterin is a well-known tech geek, influencer, and computer programmer. To promote the blockchain, he started Bitcoin Magazine and provided blockchain information for cryptocurrency investors. In 2015, he co-founded Ethereum, a blockchain platform that contributed to decentralized finance.   Quick Facts   Full name Vitaly Dmitrievich Buterin Birth 31-01-1994, Kolomna, Russia Education University of Waterloo Wife/Partner To be updated / Not Married Famous for Ethereum, ETH, Blockchain advocate/promoter  Net Worth $1B (refer for realtime)   Buterin recognized the need for decentralized finance and used smart contracts to publish the Ethereum whitepaper.  His contributions paved the way for Ethereum's transition to Proof-of-Stake, which proved to be scalable and effective. Furthermore, he introduced Ether (ETH), the blockchain platform's native coin. A Timeline of Vitalik’s Career Co-founded Bitcoin Magazine (2011) – Established one of the first crypto publications, writing extensively on Bitcoin and blockchain. Authored Ethereum Whitepaper (2013) – Proposed a blockchain with smart contract functionality for decentralized applications (dApps). Co-founded Ethereum (2015) – Launched Ethereum after a successful $18M ICO, revolutionizing the blockchain ecosystem. Developed Ethereum Virtual Machine (2015–2016) – Created the EVM, enabling developers to build and deploy smart contracts. Worked on Ethereum Scalability (2017–2021) – Contributed to Layer 2 solutions like Rollups, Plasma, and Sharding. Led Ethereum’s Transition to Proof-of-Stake (2018–2022) – Helped develop and implement Ethereum 2.0, merging the Beacon Chain in 2022. Blockchain Research & Cryptography (2016–Present) – Focused on zk-SNARKs, privacy tech, and decentralized governance models. Philanthropy & Crypto Advocacy (2017–Present) – Donated millions in crypto for pandemic relief, AI research, and financial inclusion.   Key Achievements of Ethereum's Co-founder   Year  Achievements Details 2014 Thiel Fellowship Awarded a $100,000 grant by Peter Thiel to work on Ethereum. 2018 Fortune 30 Under 30 Recognized as one of the most influential young leaders in technology. 2018 World Technology Award in IT Software Honored for contributions to blockchain and Ethereum’s development. 2021 Time 100 Most Influential People Recognized for his impact on the global crypto and blockchain ecosystem. 2022 Ethereum’s Transition to Proof-of-Stake Successfully led Ethereum’s transition from Proof-of-Work to Proof-of-Stake.   Other Useful links to connect with Vitalik Buterin   Platform Link X (formerly Twitter) https://twitter.com/VitalikButerin GitHub https://github.com/vbuterin Ethereum Official Website https://ethereum.org Vitalik’s Blog https://vitalik.ca     EntrepreneurCrypto and Blockchain Expert , joined the discussion and gave a harsh reply to these accusations made on PoS by Wertheimer. If Wertheimer’s assertion is considered for all consensus mechanisms, then PoW punishes miners whose percentage of hash power is lower than the supply of the asset. Buterin said, “And PoW penalizes anyone who has a smaller percentage of hash power than their percentage of the coin supply. (Actually, it penalizes much more than that because profit < revenue, but you get the point).”

Not Much Profit In PoW

However, Buterin’s counter arguments are correct, as miners encounter several issues in the PoW mechanism. Generally, there is significantly less profit for miners as their hash power is meager compared to the ratio of asset supply. This is because of the daily increasing competition in the mining industry, as miners are lured by mining profits, and when they enter the crypto mining market, the difficulty soars.

Additionally, the cost of mining rigs and electricity has touched high in some countries, resulting in less profit in mining than ever before, and some PoW miners have started giving up their mining business. Buterin made the arguments to counter Wertheimer’s assertion.

Wertheimer’s point was about the network’s non-stakers who get diluted when more tokens are circulated into the network to reward stakers, significantly building an inflationary trend of the token.