I am, it's a nice currency.
this post was submitted on 15 Apr 2025
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It's an environmental disaster where the worst people in the world use vast resources to power and cool entropy machines
Is fiat better?
We drop interest rates in order to spurn more consumption, to hit an inflation target as technology lowers the price of goods, what would you call that?
Yes, fiat is a better ledger system for currency. Proof-of-work crypto has gotta be the most energy inefficient design in the history of humanity.
what would you call that?
I call it capitalism. As long as the bourgeois controls money - whether that's gold, fiat or crypto curriencies - then it's going to drive a system based on infinite growth and consumption
I agree with your ultimate assessment of money, but the security mechanism of bitcoin is an order or two less energy demanding than the security mechanism of the dollar. The US military is the largest consumer of energy on the planet. Projection is how champions of US hegemony attack bitcoin. Theirs aren't the best arguments for you to use, keep it simple and stick to the base condemnation of money and crypto's technological acceleration of it's potency.
The problem I see is people always want to raid the cookie jar. People want easy answers to crisis caused by previously misallocated capital, and the easy answer is to steal from fixed income, forcing people onto the risk curve.
This then dramatically inflates home values, leading to fewer children, and makes the rich richer via the cantillon effect. It also creates a debt trap via unfunded entitlements, which with fewer children just leads to an avalanche of debt, as politicians promise to keep the system running via more borrowing. Centralized control leads to a tragedy of the commons in our currency.
The goal of PoW is to be resilient and neutral in order to build a secure consensus from parties that don't know or trust each others and it's the most efficient way to achieve that goal. We currently don't know other consensus mechanism that would be as resilient or neutral. There is Proof-of-Less-Work which is an interesting innovation from Alephium but it's still based on PoW.
How the bourgeois controls money in Bitcoin ? How can infinite growth happen on a fixed supply ? How consumption would increase if money tends to gain value over time ?
Money ≠ Capitalism
Money is a primitive technology discovered by human way before scribing. In fact the first form of scribing appearing is money. It's so old and so embeded in our civilization that we don't really know how it works or how it emerge. We have no proof that bartering existed before money, the idea that money was made to fix bartering issues is false.
Bitcoin ≠ currency
Bitcoin is not a currency, it's a decentralized p2p network of trust building a consensus over a common immutable history that qualify as truth. Money is the first application of it but we already have other usecase such as the free software OpenTimeStamp used during Guatemala's election for exemple.
Edit : Grammar
Money ≠ Capitalism
I never said or implied otherwise. I actually implied the opposite. Money isn't inherently controlled by capitalists, but a capitalist society needs to have the bourgeoisie controlling the money.
How the bourgeois controls money in Bitcoin ?
Because they own the massive "mining" operations that do the vast majority of the entropy generation. Those datacenters are capital. They also control the markets that determine the speculative value of bitcoin.
We have no proof that bartering existed before money, the idea that money was made to fix bartering issues is false.
I never said or implied that. I'm actually a fan of David Graeber who wrote about that in Debt: the first 5000 years
Bitcoin is not a currency, it’s a decentralized p2p network of trust building a consensus over a common immutable history that qualify as truth
You're describing the concept of a blockchain. Bitcoin is an attempt to use a blockchain to implement a currency. Of course it has failed as a currency, so they've changed the purpose to be a financial instrument that's easy to speculate on
We currently don’t know other consensus mechanism that would be as resilient or neutral
This is the crux of why bitcoin is a shit idea. You can't be neutral on a moving train. It's far more efficient to establish actual trust instead of chasing a mathematical ideal of trust.
The core idea you're getting at is: because of the blockchain, you can be certain that when satoshis are added to your bitcoin wallet, the transaction was authentic, and as long as your key isn't compromised, you can trust that it will remain in your wallet. It's a neat mathematical trick, but you still need to be certain that your computer is secure, that the person isn't sending you money tied to a crime, that any third parties being used haven't built in backdoors, that your wallet isn't physically destroyed, and so on and so on.
It makes much more sense to have a handful of trusted entities (like with ssl certificates)
they own the massive "mining" operations
This doesn't make them controlling Bitcoin at all. Bitcoin has a polycentric governance when no single actor could control it. Mining is a more complexe than simply buying ASICs and burning electricity. Wall Street guys invested millions if not billions into Bitcoin mining company that have died because it was just rich guys knowing nothing about mining that thought that they would make tons of money.
Also while you're right that currently they are more private companies you could have governement-mining like Buthan is doing right now and has done for a few years. Community mining could also exist, I mean a mining pool is a cooperative design.
You're describing the concept of a blockchain.
No. The blockchain is just the format use to store the data, the real innovation come from Nakamoto's consensus, and the difficulty adjustment.
Blockchain is a buzzword from the banking industry and fintech. Blockchains existed decades before Bitcoin but they weren't marketed as such. Even git (2005) works like a blockchain but with another governance and without all the decentralized BS.
Currency is the first application but we already have other uses such as OpenTimeStamp used during Guatemala's election of 2023 for exemple. And we will have more and more once client-side validation technologies such as the RGB protocole will be live for exemple.
Of course it has failed as a currency
It hasn't fail as a currency when you watch what is happening in some Africa countries such as Nigeria, Democratic Republic of Congo to name a few. Same for latin america with Peru or Asia with India or Vietnam.
Also the ammount in USD that is transacting on Bitcoin yearly is in par with other payment processor such as Visa, Mastercard and outrunning AmericanExpress.
Bitcoin will never replace state money even tho many bitcoiners idealize this. However there is a high probability that in the future many if not most or all of the state currencies will run on Bitcoin as it's more efficient. We are at the beggining it's like the 90s for the web when nobody thought that this useless technology will permit us to buy stuff online. But this is me speculating here.
but you still need to be certain that your computer is secure
Same for every single software... Banking, PayPal etc... are not immune to that.
You can also mitigate the risks proportionnaly to your wealth and threat model. Multi-device multisig is an exemple. Liana Wallet with miniscript and timelocked is another.
You don't have to be as secure for a few thousand sats, than tens of millions, than a full bitcoin or more.
We (human) are very bad at information security. Bitcoin had a strong impact on that field of IT, it is so big that in 10 years we have made enormous progress, significantly more than in the last 50 years of computer science.
It makes much more sense to have a handful of trusted entities
How does Bitcoin is incompatible with that vision ? Any way I disagree with that statement and I think that these "handful of trusted entities" will indead use Bitcoin to transact. But again this is my point of view and me speculating.
with ssl certificates
SSL certificate also use asymetrical cryptography just like Bitcoin. How is this different since you also have to be sure that the private key of the "trusted entity" isn't compromise ?
No it's more complex than that, actually Bitcoin mining could help financing the energy transition and cleaning methane from the atmoshpere.
Peer-reviewed scientific papers :
- https://www.jbs.cam.ac.uk/2025/cambridge-study-sustainable-energy-rising-in-bitcoin-mining/
- https://nicholasinstitute.duke.edu/sites/default/files/publications/rethinking-load-growth.pdf
- https://en.odfoundation.eu/content/uploads/2024/05/20.05.2024_odf_bitcoin_mining_eu_elect_grids_eng-1.pdf
- https://www.theirm.org/news/bitcoin-and-the-energy-transition-from-risk-to-opportunity/
Mainstream media coverage
- https://www.bbc.com/news/articles/cly4xe373p4o
- https://www.bloomberg.com/news/articles/2023-08-30/bitcoin-btc-miners-like-bit-digital-draw-from-iceland-s-renewable-energy-surplus
- https://www.reuters.com/technology/cryptominer-mara-taps-us-shale-patch-power-generation-new-pilot-program-2024-10-08/
- https://www.forbes.com/sites/digital-assets/2023/07/07/everything-you-need-to-know-about-bitcoin-and-the-environment/
- https://www.euronews.com/next/2023/05/05/bhutan-has-secretly-mined-bitcoin-in-the-himalayas-for-years-and-it-did-so-sustainably
Edit : added more sources because I published it before finishing by mistakes
It's money. It's private property. I'm anti- both of those. But, I am coerced and compelled to participate in a monetary economy. So, as long as we are stuck in this situation I choose to save my money in a form that is the most reflective of my rejection of existing centralized hierarchical institutions and one that I believe can leverage those rather toxic aspects of capitalism to springboard it's value. Like, you don't have to be a monetary luddite just because you're a communist (In fact, some people are communists and socialists specifically because they understand money more intimately and exactingly than most capitalists).
So I'm money negative overall, bitcoin positive within that negative space. I'd be cool if it sucked a bunch of the inflated value out of real estate, though I don't know if it'll actually do that. Governments for sure will never allow it to hamstring their ability to raise military funding through inflation as a lot of anti-war libertarians envision.
It's private property.
Why does it count as private property and not personal property?
To be clear I am referring to marxist definitions of property and not common law definitions. It's not personal as it has no personal practical use to me, it is very purely an asset, a fungible and liquid capital. The possession of which necessarily deprives others of doing the same (Finite supply). I own it specifically to leverage it's value and that alone.
Bitcoin is a better gold than gold. It will be in central bank reserves and trade settlement currencies/mechanisms. In terms of price, gold going up is always bullish for Bitcoin, because there is a cap on gold price rise that is more gold mining, and because bitcoin is a better gold than gold, retail sales of gold for bitcoin.
I'm pro-₿itcoin
I'm an ETH-head. I understand it. It makes sense. Bitcoin? Bitcoin doesn't make any sense to me. I have severe concern about its long-term security model and the community's overall lack of desire to change anything about the protocol, including its security model.
That said, I'm overall negative about crypto in general these days. VCs, corporations, institutions, politicians, etc have all seemingly co-oped crypto in a big way. There's not much about the original cypherpunk ideals that remains anymore.
I'm part of Breadchain, a project spearheaded by The Blockchain Socialist to promote and fund left-aligned crypto projects that help workers and coops, etc. But again, these days I'm getting very jaded about the trajectory of crypto.
My biggest worry about Bitcoin is that it's still on proof of work. Even if it has shown itself to be bulletproof, it uses as much electricity as a small country and I don't think the environmentalists are going to just let that slide.
Proof-of-Stake is not a great match for Bitcoin because it fails at being neutral, it's a plutocracy system and is not as resilient as PoW.
You know what other global industries consume more than small countries ? All of them, including banking. This is an unfaire comparison in my opinion. Also the energy consumption is not the most interesting factor, the source of the energy is more interesting in my opinion.
Here is a comment I just made under OP's post to list a few academic peer-reviewed paper about the positive environmental impact of Bitcoin's PoW for financing renewable energy production and cleaning methane from the atmosphere. I've also included some articles from mainstream media.
Do you happen to have a source showing that Proof-of-Work (PoW) is more secure than Proof-of-Stake (PoS)? Most comparisons I've come across seems to show that PoS is more secure, especially when it comes to cryptoeconomic defense.
For example, PoS has built-in economic deterrents:
- As an attacker accumulates, the price of the token tends to rise, making the attack increasingly costly.
- Existing holders benefit from this price increase and can sell to the attacker, effectively extracting value from an attacker during an attempted takeover.
This is unique to PoS and doesn't exist in PoW, where the cost of an attack is external and doesn't get progressively more difficult to attack.
I don't have a source, I've made those assumptions after countless conversation with various actors across the blockchain space both from PoW chains and PoS ones.
It's not much about security but more about permissionless, neutrality and resilience. PoS isn't insecure but it's less resilient and tend to have neutrality issue that we don't have seen yet on Bitcoin PoW for exemple.
There is different things here. First with PoS you don't have a link to the real world, atoms and stuff. You don't really have a physical cost to secure the network, you don't have external factors like you have on mining farms. The competition is completely different where you have to find the cheapest energy source and the most stable places to mine. In PoS validator gets richer and gets more influence, in PoW this isn't exactly the case due to physical reasons.
If for some reasons like a bug or a global disaster and that all the nodes went offline when the validator start to come back online they will have to communicate and choose what is the real chain. With PoW miners will simply mine the longest chain as it's the consensus. Bringing more resilience.
Also in PoS like on Ethereum an issue is centralization of the validator, on PoW this is more about concentration while not an ideal thing this isn't as bad as Lido and AWS centralisation.
I agree with a lot of your points, but I’d add that money is a limited economic resource tied to the real world, atoms and all that. Buying stake in a network carries a real, physical cost similar to buying mining equipment.
Also, I don’t think PoS’s more flexible recovery models are necessarily a bad thing. They actually provide adaptability in case of problems.
But if we look at resilience historically, PoW chains have been vulnerable to 51% attacks, like we’ve seen with Ethereum Classic and Bitcoin Gold. Where as with PoS, noone has even been able buy up 51% of a chain for an attack.
Sorry but you can't compare the physical ressources of PoW and PoS, mining isn't buying a shit tons of ASICs and getting bitcoins.
How it's recovery model is more flexible ? How does mining can't adapt to issues ?
51% on Bitcoin has been highly improbable from decades now, miners will see it comming fast enough to adapt. Forks and 51% attacks are two very different concept. You had it with ETH PoW and you'll probably get new fork even after PoS chains.
Again I never said that PoS was less secure, I said it was more neutral and resilient. Bitcoin needs to be neutral and resilient as a network. PoS is a different consensus mechanism that have different tradeoff.
I mean in general, Bitcoin aside, PoS is more resilient than PoW. The only major resilience issue I know of in PoS is when validators came offline for Ethereum and couldn't reach finality. But I don't think that's a fair comparison to PoW because PoW doesn't have finality in the first place. Also, because PoS has finality, it's resistant to long-range attacks, even if someone did a 51% attack (which has never happened for a PoS chain), they wouldn't be able to rewrite finalized blocks.
Do you understand what it would need to change multiple blocks on 51% attack. Getting 51% of hashrate is a thing, maintaining long enough is another. Also if 51% attacks happen in a PoW consensus it can recover from it, not without any damage but it can recover. On PoS systems, once it happend it's done.
PoW has probabilistic finality. The deeper a block is buried under subsequent blocks, the less likely it is to be reversed. Deterministic finality is not a universal upgrade — it trades off with flexibility and recovery mechanisms.
Main risks regarding PoS resilience are in my opinion :
- Centralized staking: A few providers (Lido) control large shares of stake, increasing systemic risk.
- Recovery assumptions: PoS chains often rely on subjective knowledge of the canonical chain in recovery scenarios (see "weak subjectivity").
- Slashing risks: Honest validators can be penalized due to bugs or network issues.
Centralized staking: Yes, it’s a concern, but so is centralized mining. We’ve seen real-world 51% attacks on PoW chains due to mining centralization.
Weak subjectivity: True, it’s a real factor, but not a showstopper. Clients just need to use a recent finalized checkpoint.
Slashing risk: It exists in theory, but we haven’t seen it hit honest validators in practice, even on smaller PoS chains.
We’ve seen real-world 51% attacks on PoW chains due to mining centralization.
What chains are you referring too ? Cuz except some SHA-256 mining coins like BCH I can't remember hearing about that.
Here's a list of a number of them: https://99bitcoins.com/wiki/51-percent-attack/
I should note that I'm lumping in security as part of resilience, since being able to recover from problems includes being able to recover from attacks and limiting damage from attacks. If something is not as secure it's not as resilient, either.
Thanks for the link, interesting stuff.
So yes that's mainly unknown tokens, chains that forks from popular chains. Also 51% of hashrate from a pool doesn't mean malicious actor to easily do a 51% attacks. While the pool dominance isn't an ideal situation it's usually not as bad as some people like to tell.
But there is no explaination on how PoW is less secure than PoS chains (especially with most tokenomics launch), PoW is indeed a better design to recover from attacks.
Sure, those attacks happened on lesser-known chains like Ethereum Classic and Bitcoin Gold, but doesn’t that actually suggest PoS is more resilient in practice, even if can be argued that it’s weaker in theory?
In PoS, to extract value or compromise finality, an attacker needs to control 67% of the stake, which has never successfully happened, even on unknown tokens or forks from popular chains. That’s a pretty strong track record for security and resilience.
The lack of successful 67% attacks on major PoS chains is indeed a positive sign. However, this could also reflect social deterrence, early-stage economics, or insufficient adversarial incentives — not necessarily intrinsic robustness.
- Liveliness attacks (e.g., preventing finality without conflicting it) can happen with 1/3 of the stake. This happened on Ethereum in 2023.
- Censorship and delay attacks are feasible with much less than 67% if coordination and MEV strategies are used.
Anyway my initial argument was that Bitcoin have no interest to move away from its PoW and especially not to transition to PoS. PoW isn't perfect and has its drawbacks but PoS is not a better system, it's an alternative with other drawbacks that doesn't meet every chains needs.
True, I agree that PoS has tradeoffs and isn't a perfect solution. And I totally understand that Bitcoin has lots of reasons to stick with PoW. I was speaking more generally about resilience and security in PoW vs. PoS.
I don’t think what happened to Ethereum is a fair comparison, because PoW doesn’t have finality to begin with. When Ethereum temporarily lost finality, it just reverted to a PoW-like model, where finality is probabilistic. It was a degradation, not a catastrophic failure.
Aside from the long term security guarantees that every Bitcoiner is just ignoring, the narrative around energy usage has pretty much gone away. Why? I have no idea. Ethereum in comparison has gone to PoS and reduced its energy usage to near trivial amounts while at the same time democratizing securing the network in a way more sustainable way.
Ethereum's long-term security model is Proof of Stake.
At best, it's economic rent with holders getting free money from workers. At worst, it's a game of musical chairs that only people who don't use the money can win. Profits from securing the network ought to automatically adjust towards zero.
PoS is why Ethereum bailed out everyone with money in the DAO. PoW is why Bitcoin didn't bail out anyone with money in MtGox. The cost of auditing smart contracts ought to be internalized to the people using them, not an external cost for all users.
Upgrading Bitcoin is a great idea. Ethereum's flexibility has been proven useful by the huge variety of projects that run on it. So we should support BIP 300 and get some of that. But I would not consider Ethereum's security model to be an upgrade.
At best, it’s economic rent with holders getting free money from workers.
The workers are the ones securing the network. Anybody can participate, providing they have as little as 0.01 ETH to put up as collateral.
At worst, it’s a game of musical chairs that only people who don’t use the money can win. Profits from securing the network ought to automatically adjust towards zero.
Ethereum base fees are in fact sent to a burn address and removed from circulation. Validators get priority tips only.
PoS is why Ethereum bailed out everyone with money in the DAO.
PoS is unrelated to the DAO hack. PoS is a consensus mechanism change from PoW. Instead of solving increasingly more difficult and energy-intensive puzzles to determine who gets to process the next block, in Ethereum it's randomly chosen amongst the validators.
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Firstly, the DAO fork was not a rollback or bailout. It was a unique situation where the hackers had to wait 28 days for withdrawals, so a smart contract change was executed.
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There was strong consensus across developers, users, miners and community alike - it was hardly a centralized decision.
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Those who disagreed simply moved to Ethereum Classic. It's a win-win situation for all.
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Ethereum was still a very, very new project then. You know which other project did a rollback when it was less than 2 years old? Value overflow incident - Bitcoin Wiki
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EIP-999 being rejected is the final deathblow to this hypothesis. There was a chance to rollback 500,000 ETH to an entity managed by one of its co-founders, and the community overwhelmingly rejected it. Rollbacks do not happen on Ethereum.
Upgrading Bitcoin is a great idea
An idea that virtually NOBODY in the bitcoin community agrees with. The entire value prop of Bitcoin is that it's ossified and simple.
But I would not consider Ethereum’s security model to be an upgrade
Ethereum's model is sustainable 10, 20, 50 years from now. In order for Bitcoin's security to be sustainable, the price of BTC must rise. Each Bitcoin halving reduces the block reward for miners ... so unless the price just goes up forever as Bitcoin literally burns the planet, the result is a decrease in the overall hashrate of the network, allowing for an easier attack.
This is demonstrably true: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4727999
At best, it’s economic rent with holders getting free money from workers.
The workers are the ones securing the network. Anybody can participate, providing they have as little as 0.01 ETH to put up as collateral.
The workers - people with jobs - are not securing the Ethereum network. The rich can more easily afford the opportunity cost and transaction costs of staking, and thus get a higher percentage return than the poor with mostly cash reserves. It recreates the feedback cycle we're seeing with the dollar.
https://en.wikipedia.org/wiki/Economic_rent
At worst, it’s a game of musical chairs that only people who don’t use the money can win. Profits from securing the network ought to automatically adjust towards zero.
Ethereum base fees are in fact sent to a burn address and removed from circulation. Validators get priority tips only.
I'm talking about net profits, not base fees. You would need something like difficulty adjustment.
PoS is why Ethereum bailed out everyone with money in the DAO.
PoS is unrelated to the DAO hack.
No, it was related. I was an ETH user myself until then. The reason they did the bailout was because they were afraid the hacker would risk PoS.
And there wasn't a strong consensus. They explicitly said "the code is the contract" and pointed towards the code itself when asked about design intent before the hack. Those of us who disagreed with the bailout just left.
You know which other project did a rollback when it was less than 2 years old? Value overflow incident - Bitcoin Wiki
This was a bug in Bitcoin, not a bug in a user-created smart contact. Ethereum was working perfectly at the time of the hack.
There was a chance to rollback 500,000 ETH to an entity managed by one of its co-founders, and the community overwhelmingly rejected it. Rollbacks do not happen on Ethereum.
Not doing it every time proves that these co-founders were not as influential as Vitalik Buterin (who had invested in the DAO). The DAO hacker's money was rolled back with a hard fork.
The entire value prop of Bitcoin is that it's ossified and simple.
That would make altcoins worthwhile, wouldn't it! The value proposition of Bitcoin has not changed since it was the most complicated cryptocurrency.
Each Bitcoin halving reduces the block reward for miners ... so unless the price just goes up forever as Bitcoin literally burns the planet, the result is a decrease in the overall hashrate of the network, allowing for an easier attack.
This is addressed in the Bitcoin whitepaper. A block's transaction fees alone are already worth more than the total block reward used to be.
The DAO happened six years before Ethereum switched to Proof of Stake. Forking was probably the wrong call but the users voted with their feet and Ethereum Classic is still there if anybody wants to use it. Payments do decrease as a larger percentage of all Ethereum is dedicated to staking. Proof of Stake is not economic rent, the stakers only receive payment while they continue to perform their duties faithfully, if they fail or cheat they are instead penalized and lose their status.
The DAO happened six years before Ethereum switched to Proof of Stake.
I know, I was an ETH user myself until then. The reason they did the bailout was because they were afraid the hacker would risk PoS.
Proof of Stake is not economic rent
Do you agree that stakers are making a profit - a higher return than the cost of bringing the factor into production?
They clearly do expect to make a profit, otherwise they wouldn't stake. But rent is only one part of profit and in this case, where the activity does require some amount of effort, skill, and risk, and is subject to competition both from other stakers and from other chains, categorizing it as rent is an error.
Economic rent is when the owner of a factor of production is paid more than the costs of bringing it into production. It doesn't imply literally zero skill/effort/risk.
I'm suggesting that it's better to set those profits on fire than it is to give them away below cost, just for owning something.
That's a greatly oversimplified definition that would capture essentially all productive activity. If I paint someone's house and charge them more than the cost of paint, am I earning economic rent? As the owner of my tools and my own labor, the answer according to that definition would be yes.
In your hypothetical, you're paying the cost of bringing the painted house into production with your labor, not getting paid just for owning something.
A closer comparison would be landlords who claim "being a landlord is a job" because they pay themselves to paint the house (or other property management).
Being a landlord can be a kind of hybrid, it depends. If you just own land and collect rent while doing nothing to provide value to anybody then yes, all you're going is gatekeeping access to something that you didn't make which is basically the textbook definition of economic rent and it's parasitic. Using your labor and capital to build or maintain an improvement (like a house) and then leasing that out isn't economic rent, it actually is a real job just like any other, but only for the portion of the income that is due to the improvement; the lion's share of the income is almost always due to land ownership so it's still parasitism but with a garnish of legitimate work.
I don't think reading only the first sentence of the Wikipedia/Mirian-Webster definition in isolation is very helpful, you really have to dig deeper if you want to have a good sense of what economists are really trying to communicate with the concept of economic rent.
With all due respect, I have read quite a bit and was trying to inform you. We seem to agree on how landlords are parasitic, but not on how being a staker is essentially the same thing.
Yes, it takes some know-how, and they have to set it up, but at the end of the day, that cost is significantly less than the income the rent seeker receives. There is no mechanism to reduce their profits, especially not approaching zero.
I can appreciate that your intentions here are good but I remain convinced that you've got the economic aspect of this quite wrong. If the rewards of staking were zero the network would be at risk because nobody would be willing to do the necessary work of securing it. This is in stark contrast to land, which would be just as capable of productive use even without a rich person to own it. Validator slots are freely available to anybody who is prepared to do the required work and dedicate the required capital, and they are subject to unrestricted competition from other stakers and other networks, their profits do not come from any privilege given by law or unnatural strategic advantage. The full cost of staking is surprisingly difficult to determine, it's potentially much more than just the cost of hardware and electricity given the risk involved, not just from slashing but also from holding a volatile asset, in addition to the sacrificed opportunity cost of the staked capital. The rewards of staking would fall to less than half of what they are today if the percentage of Ethereum staked were to get anywhere close to 100%, and if the price of Ethereum were to fall in the future they could well already be effectively less than zero.
Difficulty adjustment minimizes profits (rewards - costs), not block rewards. The profit is the problem.