Justin Bons

‘Not even a single TX has been censored on ETH’ — Cyber Capital founder

Bons noted that even with 50% OFAC compliance among Ethereum validators, blocks will still be produced within 30 seconds.

Ethereum bulls have hit back against claims the network has become prone to censorship post-Merge, with one arguing that “not even a single” transaction has been censored on the network. 

In a 19-part thread to his 29,100 followers on Oct. 17, Cyber Capital founder and CIO Justin Bons argued that contrary to “what some Bitcoiners are falsely claiming,” not a single transaction on Ethereum has been stopped as a result of Office of Foreign Assets Control (OFAC) sanctions.

Bons was referring to recent reports suggesting Ethereum has become too reliant on OFAC-compliant Miner Extractable Value (MEV)-Boost relays since the Merge.

Last week, it was reported that more than 51% of Ethereum blocks are now complying with the U.S. sanctions after transitioning to proof-of-stake (PoS). 

The crypto-fund manager argued that despite the increasing presence of OFAC-compliant MEV-Boost relays, it only becomes censorship when producers refuse to build on non-compliant blocks, though that would result in forking and splitting of the chain, explaining:

“Even with 50% OFAC compliance, a non-compliant ETH TX will be confirmed within 30 sec! Compared to BTC’s more variable 10min!”

Bons further argued it only takes one contributing validator to include what may be an OFAC-sanctioned transaction in the canonical chain.

“This means that a very small minority of validators/miners can counter such censorship over both ETH & BTC! Easily less than 1% can prevent censorship,” he explained.

Having attributed most of this backlash to “Bitcoiners,” Bons also argued that Ethereum with its new PoS consensus mechanism is “less vulnerable” and “far more secure” than Bitcoin under proof-of-work (PoW) because institutional players are not economically incentivized to try split the chain.

Related: Ethereum may now be more vulnerable to censorship — Blockchain analyst

Ethereum developers have also working to improve Ethereum’s censorship resistance too — with Ethereum developer Terence Tsao of Prysmatic Labs on Oct. 17 announcing that he and fellow developer Marius van der Wijden had begun building a solution to address the issue:

Ethereum co-founder Vitalik Buterin recently proposed a Partial Block Auction solution, where a block builder only has the right to decide some of the contents of the block.

Ethereum research and development organization Flashbots is also looking to soon roll out its fully decentralized and EVM-compatible block builder — Single Unifying Auctions for Value Expression (SUAVE) – in order to combat censorship issues.

On Aug. 8, the United States Treasury Department added more than 40 cryptocurrency addresses allegedly connected to controversial mixer Tornado Cash to the Specially Designated Nationals list of OFAC, effectively barring U.S. residents from using the mixing service. 

‘Not even a single TX has been censored on ETH’ — Cyber Capital founder

Bons noted that even with 50% OFAC compliance among Ethereum validators, blocks will still be produced within 30 seconds.

Ethereum bulls have hit back against claims the network has become prone to censorship post-Merge, with one arguing that “not even a single” transaction has been censored on the network. 

In a 19-part thread to his 29,100 followers on Oct. 17, Cyber Capital founder and chief investment office Justin Bons argued that contrary to “what some Bitcoiners are falsely claiming,” not a single transaction on Ethereum has been stopped as a result of Office of Foreign Assets Control (OFAC) sanctions.

Bons was referring to recent reports suggesting Ethereum has become too reliant on OFAC-compliant Miner Extractable Value (MEV)-Boost relays since the Merge.

Last week, it was reported that more than 51% of Ethereum blocks are now complying with the U.S. sanctions after transitioning to proof-of-stake (PoS). 

The crypto-fund manager argued that despite the increasing presence of OFAC-compliant MEV-Boost relays, it only becomes censorship when producers refuse to build on non-compliant blocks, though that would result in forking and splitting of the chain, explaining:

“Even with 50% OFAC compliance, a non-compliant ETH TX will be confirmed within 30 sec! Compared to BTC’s more variable 10min!”

Bons further argued it only takes one contributing validator to include what may be an OFAC-sanctioned transaction in the canonical chain.

“This means that a very small minority of validators/miners can counter such censorship over both ETH & BTC! Easily less than 1% can prevent censorship,” he explained.

Having attributed most of this backlash to “Bitcoiners,” Bons also argued that Ethereum, with its new PoS consensus mechanism, is “less vulnerable” and “far more secure” than Bitcoin (BTC) under proof-of-work (PoW) because institutional players are not economically incentivized to try split the chain.

Related: Ethereum may now be more vulnerable to censorship — Blockchain analyst

Ethereum developers have also working to improve Ethereum’s censorship resistance too — with Ethereum developer Terence Tsao of Prysmatic Labs on Oct. 17 announcing that he and fellow developer Marius van der Wijden had begun building a solution to address the issue:

Ethereum co-founder Vitalik Buterin recently proposed a Partial Block Auction solution, where a block builder only has the right to decide some of the contents of the block.

Ethereum research and development organization Flashbots is also looking to soon roll out its fully decentralized and EVM-compatible block builder — Single Unifying Auctions for Value Expression (SUAVE) — in order to combat censorship issues.

On Aug. 8, the United States Treasury Department added more than 40 cryptocurrency addresses allegedly connected to controversial mixer Tornado Cash to the Specially Designated Nationals list of OFAC, effectively barring U.S. residents from using the mixing service. 

Bitcoin is ‘one of the worst cryptocurrencies’ claims Cyber Capital founder

The comments come as Ethereum and Cardano are soon undergoing significant upgrades, while Bitcoin has remained largely unaltered.

Founder and chief investment officer of crypto-focused fund Cyber Capital Justin Bons have called Bitcoin (BTC) “technically one of the worst cryptocurrencies,” and a “purely speculative asset without utility” in comparison with other cryptocurrencies due to its lack of technological progress.

Bons added his two cents in an 11-part Twitter thread on Sunday, stating that Bitcoin and BTC’s value proposition has long deteriorated due to a broken long-term security model, comparatively weak economic qualities and lack of capacity, programmability and composability.

Bons has been an outspoken figure in the crypto community for several years now, having established one of Europe’s oldest cryptocurrency funds, Cyber Capital, in 2016 and considering himself a full-time crypto researcher since 2014. In addition, Bons has run nodes on the Bitcoin and Bitcoin Cash networks.

While Justin said he vigorously defended BTC in 2014, he said “the reality is that BTC dramatically changed since that time,” with the decision to not increase the block size limit representing a “major departure from the original vision and purpose of Bitcoin:”

“The world has also moved on and progressed. I remember it used to be said that BTC would just adopt the best technologies. This thesis has obviously completely failed as BTC has no smart contracts, privacy tech or scaling breakthroughs.”

Bons, however, doesn’t appear to address the Bitcoin Lightning network, which is one of the more obvious solutions to the network’s scaling problem.

Bons added that competitor networks have adopted superior token design methods, with some smart contract networks adopting fee-burning mechanisms that can trigger negative inflation rates for the token:

“BTCs economic qualities are also incredibly weak […] BTC is competing with cryptocurrencies that can achieve negative inflation […] due to fee burning, high capacity & high utility […] such as ETH post-merge & alternatives such as AVAX, NEAR & EGLD.”

Without any significant technological advances or utility, Bons argues that BTC has for many people become a purely speculative asset, who continue to invest “contrary to fundamental reasons of revenue, utility & use case analysis.”

Bons isn’t the first to use such strong language to describe Bitcoin.

In June 2022, Chair of China’s Blockchain Service Network (BSN) Yifan He told Cointelegraph that “all unregulated cryptocurrencies including Bitcoin are Ponzi schemes.”

Former United States Treasurer and current Ripple Board Member Rosa Rios said last year in September that Bitcoin is nothing more than a speculative tool in comparison to other digital assets like XRP, which is primarily used to facilitate cross-border payments.

Related: What is the purpose of Bitcoin: Speculation or dollarization?

When it was originally launched in 2009, Bitcoin was designed as an electronic peer-to-peer cash system. Satoshi Nakamoto’s Bitcoin white paper addressed that any speculation regarding its value as an investment is simply a by-product of its main purpose.

The narrative surrounding Bitcoin has changed over time, with the leading cryptocurrency being seen as an inflation hedge, store of value and digital gold throughout the years.