3 ms·

This is one of the reasons I prefer proof-of-stake schemes, despite the complexity, low power consensus is preferable given roughly equivalent tamper resistanc

This is one of the reasons I prefer proof-of-stake schemes, despite the complexity, low power consensus is preferable given roughly equivalent tamper resistance. State collusion with mining pools is a credible threat to proof-of-work schemes.

jstanley 9y ago
Proof of Stake is just Proof of Work with hidden work. Miners will crank whatever handle they can crank to increase their payout, up to the point where they spend more marginal effort cranking the handle than the corresponding marginal payout is worth. In PoW (in bitcoin) that handle is SHA256. In Proof of Stake, it's more obscure, but they will find it, and they will crank it, and you'll just be back where you started. I'm not convinced PoS is a practical improvement on PoW.
- jcfrei 9y ago
  This is a misleading argument. Yes, miners will always spend more until marginal revenue == marginal cost. The problem with the proof of work system of bitcoin (and many others) is its inefficiency that only allows for a low transactions throughput. Proof of work has no inherent value for the system, it's simply a way to cap the network throughput to about 1MB per 10 minutes because anything lower than 10 minutes will make the network increasingly vulnerable to adversarial attacks [1]. There's got to be a way to increase network throughput beyond this while maintaining censorship resistance and decentralization. [1] C. Decker, Information Propagation in the Bitcoin Network: http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23fc0/P2P2013_041.pdf http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23...
  - tylersmith 9y ago
    The point is expend work to create signatures, creating a crytoeconomic cost to state changes.
    - jcfrei 9y ago
      The purpose of PoW is to reduce the number of forks and also making double spending attacks very expensive. Why can't the computing power of the entire network be used to just verify the integrity of all transactions and skip the nonce finding part? This would immensely increase network throughput. The reason is because Bitcoin's PoW implementation can't provide the same level of consensus and security with a higher number of transactions. Newer PoS systems might.
spiorf 9y ago
The problem with POS is that you do not have a mathematical guarantee of immutability. It costs nothing to try to stake on different blocks, and every counter-measure relies on the fact that the network is not partitioned. This would be fatal in case of a remote crash vulnerability, because an attacker could partition the network at will. Or a nation/state could cut internet access. Without real world energy, you lose byzantine fault tolerance.
- _coldfire 9y ago
  The only proven countermeasure so far is delegated proof of stake, which has "trusted" parties doing the staking. But this goes against the idea of decentralisation. Some people wonder if pure proof-of-stake is even possible. Ethereum is likely going with DPOS, yet to see a single solution to the nothing-at-stake problem.

jstanley 9y ago

Proof of Stake is just Proof of Work with hidden work. Miners will crank whatever handle they can crank to increase their payout, up to the point where they spend more marginal effort cranking the handle than the corresponding marginal payout is worth. In PoW (in bitcoin) that handle is SHA256. In Proof of Stake, it's more obscure, but they will find it, and they will crank it, and you'll just be back where you started. I'm not convinced PoS is a practical improvement on PoW.

jcfrei 9y ago
This is a misleading argument. Yes, miners will always spend more until marginal revenue == marginal cost. The problem with the proof of work system of bitcoin (and many others) is its inefficiency that only allows for a low transactions throughput. Proof of work has no inherent value for the system, it's simply a way to cap the network throughput to about 1MB per 10 minutes because anything lower than 10 minutes will make the network increasingly vulnerable to adversarial attacks [1]. There's got to be a way to increase network throughput beyond this while maintaining censorship resistance and decentralization. [1] C. Decker, Information Propagation in the Bitcoin Network: http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23fc0/P2P2013_041.pdf http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23...
- tylersmith 9y ago
  The point is expend work to create signatures, creating a crytoeconomic cost to state changes.
  - jcfrei 9y ago
    The purpose of PoW is to reduce the number of forks and also making double spending attacks very expensive. Why can't the computing power of the entire network be used to just verify the integrity of all transactions and skip the nonce finding part? This would immensely increase network throughput. The reason is because Bitcoin's PoW implementation can't provide the same level of consensus and security with a higher number of transactions. Newer PoS systems might.

spiorf 9y ago

The problem with POS is that you do not have a mathematical guarantee of immutability. It costs nothing to try to stake on different blocks, and every counter-measure relies on the fact that the network is not partitioned. This would be fatal in case of a remote crash vulnerability, because an attacker could partition the network at will. Or a nation/state could cut internet access. Without real world energy, you lose byzantine fault tolerance.

_coldfire 9y ago
The only proven countermeasure so far is delegated proof of stake, which has "trusted" parties doing the staking. But this goes against the idea of decentralisation. Some people wonder if pure proof-of-stake is even possible. Ethereum is likely going with DPOS, yet to see a single solution to the nothing-at-stake problem.