Have you heard the news about Paxful removing the Ethereum wallet from its platform? As a cryptocurrency exchange offering various digital wallets, Paxful’s decision to remove Ethereum might have surprised some users.
But why did they do it? Keep reading to discover the reasons behind Paxful’s decision and what it means for the future of cryptocurrency trading. So, let’s get started!
Overview of Paxful’s Cryptocurrency Wallet Services
So, let’s talk about Paxful’s wallets. Paxful is an exchange platform that enables you to trade numerous crypto coins, such as Bitcoin and Ethereum. But it’s not just about trading – they also offer wallets to help you keep your digital currencies safe and organised.
What’s cool about Paxful’s wallets is that they also work with other features on the platform. So, you can easily deposit or withdraw funds and make trades directly from your wallet.
Overall, Paxful’s wallets are an essential part of their platform. No matter what your financial and investment goals are, it is easier to manage your digital currencies. Whether you’re a pro trader or just starting out, Paxful has a wallet that will work for you.
So, why exactly did Paxful get rid of a significant crypto wallet, Ethereum? Let’s take a look at the backstory and what led up to the shocking decision.
What Caused The Removal of Ethereum Wallet From Paxful?
The news broke on the 21st of December 2022 through a Tweet by the CEO, Ray Youssef.
He released a Tweet saying, “We finally kicked #ethereum off our marketplace. 11.6m humans safer. Integrity over revenue,”
But was this an out-of-the-blue decision? Not really. Youseff had actually hinted at it ten days before the official announcement.
In the announcement tweet, Youseff attached a screenshot of his statement. The statement shed more light on why he decided to remove Ethereum from his peer-to-peer exchange platform. Youssef mentioned three reasons for removing Ethereum: the move of ETH to proof-of-stake (PoS) from proof-of-work (POW), a lack of decentralisation, and the continuous growth of dissemination of scams in its ecosystem.
Now, let’s look at each reason in-depth and what Youseff had to say about them.
1. The Move of ETH To Proof-of-Stake (PoS) From Proof-of-Work (POW):
Youseff argued that Ethereum has basically become a digital form of fiat due to its move to a proof-of-stake validating mechanism.
He continued, saying, “Revenue is nice, but integrity trumps all,”.
Talking about the Ethereum network’s move to proof-of-stake (POS) validation from proof-of-work (POW), he claimed that “Proof-of-work is the innovation that makes bitcoin (BTC) the only honest money there is, whereas proof-of-stake has rendered ETH essentially a digital form of fiat,”. ETH is “controlled by a small number of people, and one day you will need permission to use it,” he continued.
Youssef has some strong opinions about Ethereum and its consensus mechanism, PoS. He believes that PoW is the innovation that makes Bitcoin the only honest money out there. Meanwhile, according to Youssef, PoS has essentially turned Ethereum into a digital version of fiat money.
2. Lack of Decentralisation:
Youssef is also critical of the centralisation that still exists within the Ethereum project. He believes that a small group of insiders hold too much influence over the platform, which goes against the principles of decentralisation that crypto was built on.
3. The Continuous Growth of Dissemination of Scams in its Ecosystem:
Finally, Youssef takes issue with the prevalence of scams in the Ethereum ecosystem. While he acknowledges that the platform has some real-world use cases, he believes that tokenisation has allowed scammers to rob people of billions of dollars. This has hurt individual investors and set back the industry’s progress towards its mission.
Despite the challenges facing the crypto industry, Youssef remains committed to protecting Paxful’s users and doing the right thing, even if it’s not popular or profitable.
In November 2022, FTX, a famous cryptocurrency exchange, experienced a major security
breach that left many users worried about the safety of their assets. In response, Youssef became a strong supporter of self-custody in the Bitcoin and cryptocurrency community.
Youssef was urging people to take control of their assets and move them to storage options that they could manage themselves. He specifically suggested that Paxful users follow suit and consider self-custody a safer alternative to storing their assets on centralised exchanges.
It’s great to see a CEO taking a proactive stance on security and advocating for user control over their own assets. Youssef is promoting a safer and more decentralised future for cryptocurrencies by encouraging self-custody.
On Twitter, Youssef said Paxful will continue to offer trade in stablecoins Tether (USDT) and USD coin (USDC), but he wasn’t overly excited about it.
In conclusion, Youssef’s decision to remove the Ethereum wallet from Paxful’s platform is driven by a combination of factors, including his belief in the superiority of Bitcoin’s PoW consensus mechanism, his concerns about Ethereum’s centralisation, and the prevalence of scams in the Ethereum ecosystem.
By taking a strong stance on security and advocating for user control over their own assets, Youssef is promoting a safer and more decentralised future for cryptocurrencies. While the crypto industry faces many challenges, leaders like Youssef are working hard to protect their users and promote responsible innovation in the space.
As the crypto world continues to evolve, focusing on security, transparency, and user empowerment is vital to building a more trustworthy and equitable financial system.