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Open for critique, but just by going off of this article: With "Proof of <wildcard>" you're essentially abstracting out how a community participates. Proof of

by lowglow 10y ago

Open for critique, but just by going off of this article: With "Proof of <wildcard>" you're essentially abstracting out how a community participates. Proof of Work exists to demonstrate good will by saying "This person works to participate and add value in the community" There is a buy-in a degree removed from the coin. Proof of Stake sounds like it just removes the work someone must do from the system and says "If they have money, they can buy in to the community without work". It's like saying: Instead of people putting in the work to contribute to the community through effort the community finds valuable (i.e. Proof of Work, e.g. Karma), we're going to let people just buy karma and trust that they have the community's best interest in mind. While this gives anyone the ability to buy into the community and participate in the consensus, this sounds like the opposite of what I want in a community, because these people don't have to work to demonstrate their value to the community that exists. Another issue is this doesn't encourage liquidity, it encourages people to hoard their coins/currency to participate. This might drive the price of the coin up I guess. Ethereum doesn't have a 'set amount' that will ever be released like bitcoin. They'll release coins indefinitely. Does this mean you'll have to participate in purchasing coins indefinitely to continue to participate to have a larger voice as the value of your coins gets diluted? There might also be the problem of who controls the coins might always maintain a majority, since the tokens/coins are just issued, there is no real work required to obtain them. That's a little weird and totalitarian and not utilitarian.

ikeboy 10y ago
Proof of work demonstrates that a certain amount of work was done, which cost a certain amount of money to produce. It's burning money to get currency, nothing more.
- Spivak 10y ago
  It also helps facilitate transactions, ensures the security and integrity of a network of mutually distrustful agents, and establishes a price floor for the currency loosely based on the price of electricity.
  - ikeboy 10y ago
    "establishes a price floor for the currency loosely based on the price of electricity." You have causality backwards: the difficult changes based on the price of the currency. If the price goes down, people will simply mine less.
rocqua 10y ago
There is an even larger issue with the basic proof of stake method. It's called 'nothing at stake'. With proof of work, you can only mine on any one block. You make sure this is the last block in the chain because otherwise you'd need to mine 2 blocks in a row to convince everyone. This ensures it is really hard to rewrite history. With proof of stake, nothing is preventing you from 'mining' on multiple base blocks on the same time. Anytime you spend a coin and get the goods, you might as well try and see if you can 'mine' 2 new blocks to erase your transaction. I've seen proposed solutions that combine these 2. Basically, a block then requires both proof of work and proof of stake. This doesn't help (much?) with electricity costs, but helps somewhat with centralization of power.
- gst 10y ago
  > With proof of stake, nothing is preventing you from 'mining' on multiple base blocks on the same time. Anytime you spend a coin and get the goods, you might as well try and see if you can 'mine' 2 new blocks to erase your transaction. Ethereum's proof-of-stake approach appears to solve the "nothing-at-stake" issue, see the Mauve paper for more details: http://vitalik.ca/files/mauve_paper.html http://vitalik.ca/files/mauve_paper.html TL;DR of their approach is that if you mine off-chain blocks they can get later-on included by other (PoS-)miners via the "dunkle" mechanism. If this happens there's a penalty for the original miner who mined a block that didn't make it into the current chain.
  - rocqua 10y ago
    Seems like that site vitalik.ca is down. Do you have any other sources for that paper?
    - gst 10y ago
      It's available in the Google cache: https://webcache.googleusercontent.com/search?q=cache:BPRBqz29DbcJ:vitalik.ca/files/mauve_paper.html+&cd=1&hl=en&ct=clnk&gl=us https://webcache.googleusercontent.com/search?q=cache:BPRBqz...
wmf 10y ago
Money and work are interchangeable [1] and mining doesn't necessarily add value to the community since a miner could mine empty blocks. Mining is using real money to buy electricity to generate Internet money. [1] I'm ignoring hippiecoins based on the labor theory of value.
- mdashx 10y ago
  I'm still not convinced by PoS, but at first glance, since money = work then PoS might be viable, because what's the difference? Energy goes into creating proof of stake coins, just like it goes into producing proof of work coins, so they should be equally viable... that's what I thought the first time I seriously looked at PoS. I want to believe that PoS is not simply an attempt to get something for nothing, but I think that maybe it's attempt to get money to work twice. In PoW, the work is done to get coins. In PoS, the work is done to get fiat or whatever, then exchanged for PoS, and then put to work mining, but the value was created outside the PoS system and now it's not clear where additional work is taking place to fuel block validation. I haven't decided 100% that it's a scam, but it is definitely complex and confusing. The mental model that I'm still stuck with is that PoW is like normal combustion engine... ASICs being high-displacement V8s, while PoS is like some kind of complex perpetual motion machine.

by lowglow 10y ago

ikeboy 10y ago

Proof of work demonstrates that a certain amount of work was done, which cost a certain amount of money to produce. It's burning money to get currency, nothing more.

Spivak 10y ago
It also helps facilitate transactions, ensures the security and integrity of a network of mutually distrustful agents, and establishes a price floor for the currency loosely based on the price of electricity.
- ikeboy 10y ago
  "establishes a price floor for the currency loosely based on the price of electricity." You have causality backwards: the difficult changes based on the price of the currency. If the price goes down, people will simply mine less.

rocqua 10y ago

There is an even larger issue with the basic proof of stake method. It's called 'nothing at stake'. With proof of work, you can only mine on any one block. You make sure this is the last block in the chain because otherwise you'd need to mine 2 blocks in a row to convince everyone. This ensures it is really hard to rewrite history. With proof of stake, nothing is preventing you from 'mining' on multiple base blocks on the same time. Anytime you spend a coin and get the goods, you might as well try and see if you can 'mine' 2 new blocks to erase your transaction. I've seen proposed solutions that combine these 2. Basically, a block then requires both proof of work and proof of stake. This doesn't help (much?) with electricity costs, but helps somewhat with centralization of power.

gst 10y ago
> With proof of stake, nothing is preventing you from 'mining' on multiple base blocks on the same time. Anytime you spend a coin and get the goods, you might as well try and see if you can 'mine' 2 new blocks to erase your transaction. Ethereum's proof-of-stake approach appears to solve the "nothing-at-stake" issue, see the Mauve paper for more details: http://vitalik.ca/files/mauve_paper.html http://vitalik.ca/files/mauve_paper.html TL;DR of their approach is that if you mine off-chain blocks they can get later-on included by other (PoS-)miners via the "dunkle" mechanism. If this happens there's a penalty for the original miner who mined a block that didn't make it into the current chain.
- rocqua 10y ago
  Seems like that site vitalik.ca is down. Do you have any other sources for that paper?
  - gst 10y ago
    It's available in the Google cache: https://webcache.googleusercontent.com/search?q=cache:BPRBqz29DbcJ:vitalik.ca/files/mauve_paper.html+&cd=1&hl=en&ct=clnk&gl=us https://webcache.googleusercontent.com/search?q=cache:BPRBqz...

wmf 10y ago

Money and work are interchangeable [1] and mining doesn't necessarily add value to the community since a miner could mine empty blocks. Mining is using real money to buy electricity to generate Internet money. [1] I'm ignoring hippiecoins based on the labor theory of value.

mdashx 10y ago
I'm still not convinced by PoS, but at first glance, since money = work then PoS might be viable, because what's the difference? Energy goes into creating proof of stake coins, just like it goes into producing proof of work coins, so they should be equally viable... that's what I thought the first time I seriously looked at PoS. I want to believe that PoS is not simply an attempt to get something for nothing, but I think that maybe it's attempt to get money to work twice. In PoW, the work is done to get coins. In PoS, the work is done to get fiat or whatever, then exchanged for PoS, and then put to work mining, but the value was created outside the PoS system and now it's not clear where additional work is taking place to fuel block validation. I haven't decided 100% that it's a scam, but it is definitely complex and confusing. The mental model that I'm still stuck with is that PoW is like normal combustion engine... ASICs being high-displacement V8s, while PoS is like some kind of complex perpetual motion machine.