4 ms·

Once proof of stake becomes the norm, this phenomenon will be an interesting exhibit in the Museum of Cryptocurrency

__blockcipher__ 9y ago
Why do you think PoS is workable in the long run? I'm hesitant about the implications of solely tying voting power to how much currency you hold. Hash rate isn't much better, since it's the definition of a capital-intensive business, but there's still some possibility of getting better performance through clever innovations
- jacoblambda 9y ago
  Something I am interested in but haven't seen much on is the idea of creating a proof of stake system where the value of one's stake is directly related to how liquid it is. i.e. how much they actually use their funds. Think currency regularly moving in and out of their account, providing smart contract loans, etc. I feel as if a proof of stake system that requires those staking to not only support the network but also be heavily involved in it as well would resolve some of the issues with current proof of stake systems.
  - wmf 9y ago
    Proof of Wash Trading!
  - __blockcipher__ 9y ago
    How do you deal with spam tx? In other words pretending to use your stake but you’re not actually? The same issue as what i’ve encountered when trying to imagine a cryptocurrency that is slightly inflationary, like 1% yearly. There is no objective way to decide how much the money supply should grow, as far as I can tell, because there is no way to separate “real” from “fake” usage.
    - jacoblambda 8y ago
      One aspect that wouldn't eliminate the issue of "useless" or fake tx would be to have the liquidity aspect be a modifier where stakes being il-liquid devalue but over some threshold, the stake modifier is at a constant 1x. Another potential mitigation tool would be to have the protocol look for tight tx loops (i.e. Naive liquidity falsifying) and either negate or reduce their influence on the liquidity calculation. Whether this is actually possible I have absolutely no idea. If I was to have any real trust in this idea I would have to look for/develop either formal proofs or some real demonstrable examples of it working. Beyond that I think it boils down to game theory and economics. If it could work, it would likely require careful calibration to minimise the benefit of gaming the system or otherwise being a bad actor.
      - __blockcipher__ 8y ago
        My brain isn't working very well right now so I'm having trouble understanding what you're saying, but is what you're getting at similar to the metric of "coin days destroyed"? (ie if you send 5 BTC to address foo and those 5 BTC haven't been moved for 365 days then you've destroyed 365*5 coindays
        jacoblambda 8y ago
        More or less ya that is about right. Now that would still only be part of the overall calculation as I think that assets such as loans and smart contracts should be considered in the calculation. The money from loans and such is in use by people on the network but its owner should still be able to claim it for staking purposes.
DINKDINK 9y ago
It’s been 5-6 years since proof of stake was first proposed. Nothing is cheaper than proof of work: http://www.truthcoin.info/blog/pow-cheapest/ http://www.truthcoin.info/blog/pow-cheapest/
- rspeer 9y ago
  "Nothing is cheaper than proof of work" is a ludicrously overstated claim from an overstated article. Proof of work is as expensive as it can feasibly be. When you say "nothing is cheaper than proof of work", it means you have the problem that only proof of work solves, which is that you want to achieve decentralized consensus and you trust nobody. Everything is cheaper than proof of work, as long as you trust somebody. And if you're an anarcho-capitalist who trusts nobody, why should I want to live in the world you create? A little bit of trust is worth it to stop burning coal to power useless computation.
  - grey-area 9y ago
    This is the central problem of cryptcurrences based on bitcoin - people want trust, they want verified counter parties, they don’t want a currency just anonymous enough to make petty crime easy. That makes POW remarkably unsuited to a currency as it solves the wrong problems. Also if you’re going to have POW, all these ASICS could at least be folding proteins or doing other grid computing, so they have a useful byproduct.
    - __blockcipher__ 8y ago
      This makes no sense to me. >people want trust, they want verified counter parties then you don't understand what makes cryptocurrency useful. you can send it to anyone, anywhere, with no government to tell you "no you can't buy these [censored books / illegal drugs / unregulated services]" or "no you can't send it to [blacklisted country]". <== I'm talking about currencies like XMR (monero) there since Bitcoin is a little more trackable The more you rely on trusted third parties, the less useful cryptocurrencies are since USD is far more stable and dominant. PoW has problems, but PoS also has massive problems. I'm not confident a PoS coin can survive longterm - but it'll be interesting to see; many coins are trying

Why do you think PoS is workable in the long run? I'm hesitant about the implications of solely tying voting power to how much currency you hold. Hash rate isn't much better, since it's the definition of a capital-intensive business, but there's still some possibility of getting better performance through clever innovations

jacoblambda 9y ago
Something I am interested in but haven't seen much on is the idea of creating a proof of stake system where the value of one's stake is directly related to how liquid it is. i.e. how much they actually use their funds. Think currency regularly moving in and out of their account, providing smart contract loans, etc. I feel as if a proof of stake system that requires those staking to not only support the network but also be heavily involved in it as well would resolve some of the issues with current proof of stake systems.
- wmf 9y ago
  Proof of Wash Trading!
- __blockcipher__ 9y ago
  How do you deal with spam tx? In other words pretending to use your stake but you’re not actually? The same issue as what i’ve encountered when trying to imagine a cryptocurrency that is slightly inflationary, like 1% yearly. There is no objective way to decide how much the money supply should grow, as far as I can tell, because there is no way to separate “real” from “fake” usage.
  - jacoblambda 8y ago
    One aspect that wouldn't eliminate the issue of "useless" or fake tx would be to have the liquidity aspect be a modifier where stakes being il-liquid devalue but over some threshold, the stake modifier is at a constant 1x. Another potential mitigation tool would be to have the protocol look for tight tx loops (i.e. Naive liquidity falsifying) and either negate or reduce their influence on the liquidity calculation. Whether this is actually possible I have absolutely no idea. If I was to have any real trust in this idea I would have to look for/develop either formal proofs or some real demonstrable examples of it working. Beyond that I think it boils down to game theory and economics. If it could work, it would likely require careful calibration to minimise the benefit of gaming the system or otherwise being a bad actor.
    - __blockcipher__ 8y ago
      My brain isn't working very well right now so I'm having trouble understanding what you're saying, but is what you're getting at similar to the metric of "coin days destroyed"? (ie if you send 5 BTC to address foo and those 5 BTC haven't been moved for 365 days then you've destroyed 365*5 coindays
      - jacoblambda 8y ago
        More or less ya that is about right. Now that would still only be part of the overall calculation as I think that assets such as loans and smart contracts should be considered in the calculation. The money from loans and such is in use by people on the network but its owner should still be able to claim it for staking purposes.

DINKDINK 9y ago

It’s been 5-6 years since proof of stake was first proposed. Nothing is cheaper than proof of work: http://www.truthcoin.info/blog/pow-cheapest/ http://www.truthcoin.info/blog/pow-cheapest/

rspeer 9y ago
"Nothing is cheaper than proof of work" is a ludicrously overstated claim from an overstated article. Proof of work is as expensive as it can feasibly be. When you say "nothing is cheaper than proof of work", it means you have the problem that only proof of work solves, which is that you want to achieve decentralized consensus and you trust nobody. Everything is cheaper than proof of work, as long as you trust somebody. And if you're an anarcho-capitalist who trusts nobody, why should I want to live in the world you create? A little bit of trust is worth it to stop burning coal to power useless computation.
- grey-area 9y ago
  This is the central problem of cryptcurrences based on bitcoin - people want trust, they want verified counter parties, they don’t want a currency just anonymous enough to make petty crime easy. That makes POW remarkably unsuited to a currency as it solves the wrong problems. Also if you’re going to have POW, all these ASICS could at least be folding proteins or doing other grid computing, so they have a useful byproduct.
  - __blockcipher__ 8y ago
    This makes no sense to me. >people want trust, they want verified counter parties then you don't understand what makes cryptocurrency useful. you can send it to anyone, anywhere, with no government to tell you "no you can't buy these [censored books / illegal drugs / unregulated services]" or "no you can't send it to [blacklisted country]". <== I'm talking about currencies like XMR (monero) there since Bitcoin is a little more trackable The more you rely on trusted third parties, the less useful cryptocurrencies are since USD is far more stable and dominant. PoW has problems, but PoS also has massive problems. I'm not confident a PoS coin can survive longterm - but it'll be interesting to see; many coins are trying