I’ve been talking a lot about Bitcoin recently….but
I have another crypto love for very different reasons. That is Ethereum.
It does things Bitcion cannot…but are those things turning it to the darkside? Does Ethereum
have BIG bad news? Well find out in about 10 minutes…because it’s time for Chico Crypto!!
So why do I love Ethereum? Well while Bitcoin remains the most decentralized blockchain as of
right now Ethereum is a close second…Bitcoin and it’s proof of work blockchain has just under 15000
core nodes. While Ethereum and it’s proof of work blockchain, has just under 6500 nodes. Although,
with the proof of stake switch coming this year, Ethereum will be the most decentralized based on
node count, as each eth2 validator is running a full node…and as we can see from beaconchain
which tracks these validators, there are over 300 thousand of them.
Without a doubt Ethereum is the most decentralized among smart contract platforms. Besides the large
and diverse base of node operators, they also have many layers of governance to officially
make changes to the protocol. Per example the iterations EIP-1559 went through and how long
it took to be adopted. So out of the other layer 1 smart contract-capable blockchain out there,
none even come close to Ethereum’s decentralization.
Although…are critical infrastructure pieces of Ethereum
centralized?? Well last week the world found out that may be the case….
Ethereum has a wallet provider for connecting to the blockchain and
ecosystem of dapps called Metamask. I’m sure a majority of people who watch the
channel have used it in some for a time or two.
Metamask dominantes in market share. As of April 2021 the wallet had 5 million monthly active
users, then just 4 months later by August of the same year that number had doubled to
over 10 million active users monthly. With the last stats …in 3 more months, November of 2021
that number doubled once again, to over 21 million active users a month.
It’s been 5 months since November, so it’s highly plausible Metamask has between
30 to 40 million monthly active users today.
No other wallet service provider in the space even comes close to that number.
But is Metamask centralized?? Well late last week this kind of came to the forefront. It
was reported that Venezulan users of Metamask could no longer access the
wallet. Metamask was getting blocked throughout the entirety of a country…
So what happened? Well to get the full story, we need to understand
how metamask works and who owns Metamask. First, who owns Metmask? Well that is the
leading Ethereum development and software company Consensys.
Consensys owns a large suie of Ethereum tools. Audit and Tooling from Consensys diligence,
Codefi for institutional development, Quorum the Enterprise blockchain and ethereum fork,
Truffle the developer tools and testing environment, but finally Infura…
Infura provides API access to Ethereum, Ethereum 2.0,
IPFS, Filecoin and other layer 2 networks on Eth. It’s how dapps and wallets connect
and communicate with the Ethereum blockchain. Including metamask….
Although Infura is fully centralized…the reason
Metamask was blocking users of Venezuela? Infura was doing it…
Infrua tweeted after the outrage of this “In response to the concerns we have been hearing,
we want everyone to know that we corrected the problem that so many of you have pointed out. In
changing some configurations as a result of the new sanctions directives from the United States
and other jurisdictions, we mistakenly configured the settings more broadly than they needed to be.
This was our oversight, and we are grateful that it was pointed out to us.
Once we determined what happened, we were able to fix the problem, and service has been restored.”
The United States government directed Infura to block IPs due to sanctions, and they funked up,
blocking entire countries. They “fixed” it…but the damage was already done. Infura can and could
eventually block a user, a group of users, or what has shown to be possible…entire regions.
That is because it’s fully centralized and controlled by a single entity. Consensys.
Although it’s not only Consensys now…there may be influence coming from the world
of bankers. Protos posted this article last week “ConsenSys lawsuit reveals JPMorgan
owns critical Ethereum infrastructure” and it states “A group of 35 shareholders of
Ethereum giant ConsenSys AG (CAG) have filed for a special audit of a 2020 deal
that saw JPMorgan Chase acquire an “influential” stake in two of its flagship products. What were
those two products? Well below it says “The deal, known within CAG as Project North Star,
resulted in financial institutions (JPMorgan) winning a significant slice in the company’s
lucrative intellectual property (IP), specifically MetaMask and Infura.”
So Consensys is in bed with the bankers, which is a result of Consensys acquiring JP Morgan’s
built quorum blockchain for enterprise. This was announced back in 2020, and as we can see from
the press release Consensys said “In addition to ConsenSys’ acquisition of the Quorum, J.P.
Morgan made a strategic investment in ConsenSys to support its mission to help developers build
next-generation networks and enable enterprises to launch more powerful financial infrastructure.”
Uh oh!! The legacy bankers have infiltrated Ethereum and have their paws on the inside of
Ethereum’s largest and leading software tooling and development company. Legacy
bankers that are like 2 peas in a pod with politicians and governments across the globe.
Could this ever evolving relationship between Consensys and JP Morgan have
influenced and sped up their decision to block entire countries through Infura??
Well if we go back to Protos article we can see how much of a stake JP Morgan has in Consensys,
thus it’s related products, including Infura and Metamask…it was a 10
percent..a very influential number..
Soo is one of Ethereum’s most utilized and popular tools,
the Metamask wallet, a fully centralized banker influenced piece of boohickey?
Well yes and no…let me try and explain…beginning with centralization.
Metamask by default is a non custodial wallet,
that defaults to centralized settings. Since Consensys owns both Metamask and Infura,
the wallet will default to the Centralized service Infura for connecting the wallets to the ETH
blockchain. Using default settings you are going to get centralized problems like the GEO blocking,
but also you have service outages as Infura has fully went down before on multiple occasions.
Although, luckily Metamask was originally built back in 2016
with choice in mind. Metamask has custom settings that allow you to point your wallet to and use
whatever service you would like to. Including decentralized ones.
Yes, you can use the decentralized Infura with Metamask, aka the Pocket network. Pocket
functions as an inclusive relay network for API requests to Ethereum and other major blockchains.
It’s not just one centralized company providing the API request and calls, but a network of over
33 thousand nodes. Meaning it’s decentralized, it’s unstoppable, and will likely never go down.
Sooo for those who don’t wanna play the centralized game but still use metamask,
let’s add the Pocket RPC Ethereum endpoint to your metamask wallet. Within POKT network
documentation, they have a quick guide, I’ve included that in the description if you want to
read and do it yourself. First you will have your metamask open…at the top in networks,
you will click on Ethereum and then you will click add networks. You can call this whatever you like,
I’m calling it Pocket Network Ethereum…now go to the Pocket network documentation
and copy and past what’s needed. First you will need the RPC URL, copy and paste that. You can do
the same with Chain ID, which is 1, and then finally you will need your currency symbol,
which will be Ethereum, finally click save…and you have added the POKT network to your metamask.
With this you can do any Ethereum transaction like normal…it’s just now not running through
the centralized service Infura, but the decentralized service Pocket network….
Now the final thing I want to talk about is regarding JP Morgan and Metamask.
Everyone should know that Metamask ha plans to launch a token…back in November,
founder of Consensys and co-founder of Ethereum Joe Lubin hinted at it saying
“ConsenSys is vigorously controlled by its employees, which includes me.
And we are driving towards decentralization of several of our projects. Wen $MASK? Stay tuned.”
Sooo, now that we know JP Morgan has a 10 percent stake in Consensys, thus a
10 percent stake in Metamask, will the MASK token be seen as JP Morgan launching a crypto token?
As much as I hate seeing the bankers infiltrate crypto, there are ways around
it (cough cough POCKET) and the creation of MASK with JP Morgan 10 percent behind it,
will only bring legitimacy to the token space. But does that also mean JP will be
getting 10 percent of the mask tokens when they are launched? Will they hodl or will they dump?
Only time will tell and I’ll be here to cover it all. Cheers I’ll see you next time!