Ethereum Has Issues

>and it neither invalidates the original proposed solution nor lessens its usefulness

Yes, you're right that by itself it doesn't invalidate the proposed solution. Aside from that, blockchains are still useless and that's what invalidates it. They don't do anything meaningful. Any blockchain-based solution is useful in spite of the blockchain, not because of it. I've never seen any use of blockchains to disprove this.

>Blockchains create a completely transparent, decentralized ledger.

No they don't, in theory they could do that if everything was perfect and if we didn't have to deal with the other side effects of open trade and capitalism, but in practice they don't. Every blockchain I've seen is heavily manipulated by private interests and has serious problems with centralized control. And those are just the big L1 chains. It only gets worse when you consider side chains, a lot of those have no attempt at providing transparency or decentralization at all and it's evident they're privately controlled by one company or group.

>If you don't see any novelty or potential value in that, then that's fine.

I agree there's novelty in it, but that's about it. There's no practical value whatsoever, current or potential. They're useless. I've been pretty consistent about this for the last year. Personally I humored crypto enthusiasts for the last 10 years before this and I listened to as many of their pitches as I could, I tried to look high and low for the good in it, but it's just not there. Enough is enough. It's all bad and nothing meaningful has been accomplished. There's no practical uses of this technology. However it is a very big lightning rod for scammers and fraud.

That's not true at all. In theory, a perfect market will self-regulate. No one buys or sells from scammers and they are naturally outcompeted from the marketplace. However, in real world, markets aren't perfect and that's why regulation is needed, but it's up to debate. It can be argued that the market would always find a way to weed out scammers even without regulation. Over-regulation is also sub-optimal.

> Not disinflationary like Bitcoin, but actually deflationary, with token burn

It's possible there's some recent development I'm not aware of so please fill in any gap here, but my understanding: Token burn is already in place since EIP1559 (base gas fees get burned now, instead of getting paid out to miners/validators. There is a separate priority fee for incentivizing inclusion in times of congestion). It will work similarly on ETH2. As laid out in EIP1559, this means that the ETH supply may be inflationary or deflationary at different times, depending on if total base fees are greater or smaller than miner/validator rewards. So it's not a given. However I could agree that given continued growth of Ethereum adoption, the deflationary hypothesis is not unlikely.

> Staking that 1 ETH just got 10% more expensive because the opportunity cost of staking that ETH increased relative to spending it.

Can you explain how this follows?

Shouldn't it be the opposite; as long as you don't require the immediate liquidity, deflation should mean that it's actually preferable to hodl, and staking rewards compound with that.

Aside from that, due to MEV, being a validator means you get reserved slots where you can [extract MEV yourself/safely submit transactions of your own without being front-run]. This is something that is today primarily taken advantage of by bigger or more proficient actors - meaning yes, this is a force towards validator consolidation. On the other hand I believe the "flashbots market" will likely become more efficient and accessible to the point where commonly used validator clients will have built-in interfaces to exploit this through an open market for privately broadcasted transactions (as mentioned in references this already is the case for ETH1). This means that over time the playing field gets leveled as getting a cut from MEV gets accessible for smaller non-professional stakers as well.

Looking at the current direction, I would agree in the sense that we're on the track for consolidation of staking power and resulting compounding centralization of ETH wealth, but not for the reasons you're stating, and I would not agree that smaller stakers are driven out by design - it works out that way despite the small-staker-incentive situation, not because of it.

Future EIPs may change the dynamics further in either direction. I don't think it seems obvious either way.

I am pretty anti-crypto generally but I feel compelled to reply to your maximalist position that there is "no practical value whatsoever, current or potential" to blockchains. The one use case I have seen for blockchain that is real is that cryptocurrency is great for moving money around the world when governments or banks maybe don't want you to do so. At the very least the experience of sending crypto is about as annoying or a little bit less annoying than sending a wire, and you can avoid all those pesky AML/KYC requirements that banks and payment processors impose.

I am not suggesting that this isn't ethically fraught -- of course it is. But one can imagine uses. I personally have known a couple people who fled Syria during the civil war, and bitcoin was a useful way to pull money out of the country, and much less dangerous than carrying a suitcase of cash.

Releasing PoS was hard enough on Cardano, can’t imagine the stress on Ethereum with so many moving parts and bad actors