11 ms·

Proof of Stake or Proof of Work, What's the Difference?

139 points by jungong 8y ago

lalaland1125 8y ago
For an alternative point of view, I highly recommend that people read http://www.truthcoin.info/blog/pow-cheapest/ http://www.truthcoin.info/blog/pow-cheapest/. One issue that proof of stake proponents often ignore is that proof of stake has its own costs that are roughly equivalent to the dollar cost of PoW. The issue is that you need to lock up money for PoS in order to mine it. That has a cost as you are forgoing interest on lending that money to an actually productive enterprise that is creating value. The net result is that funding and investment becomes more scarce because private investment is "crowded out" by people simply staking their Ethereum. This is the same harm caused by too much government debt "crowding out" private investment. Also, if the PoS staking rewards are too low, you are vulnerable to the exact same 51% attacks as PoW. So it's very unsure how this would significantly reduce fees unless you are also significantly increasing your vulnerability to attack. (Now, there are caveats about the fungibility and the ease of renting PoW miners vs renting PoS tokens, but many of the same principles apply).
- nowarninglabel 8y ago
  Not everyone wants to lend their money (I say this as someone who runs a crowdfunding loan site). Most cryptocurrency today is just being hodl'd by folks, not put into active investments. There are also not a lot of good, trustworthy investments available to those who want to lend directly in crypto, though I'm sure we'll get more and more as time goes on.
- AlexCoventry 8y ago
  > read http://www.truthcoin.info/blog/pow-cheapest/ http://www.truthcoin.info/blog/pow-cheapest/. Modern PoS protocols prevent stake grinding with per-verifier VRFs and multi-round verification procedures.
  - keymone 8y ago
    The complexity involved in making PoS “work” just increases the attack surface and enables political games around which workaround to implement next. And political games are decided by money, which is exactly what brings MR=MC, just like in PoW. So why bother and not use simplest possible system that guarantees security using the ultimate currency - energy?
    - AlexCoventry 8y ago
      Why bother with baroque consensus algorithms at all, and not just use USD? Because new systems with new properties will enable new capabilities.
      - keymone 8y ago
        PoS is closer to fiat than PoW. PoS is more complex and relies on trust. There is nothing “baroque” about PoW, it’s simplest, cheapest and most reliable of them all.
- covemarkets 8y ago
  "The issue is that you need to lock up money for PoS in order to mine it. That has a cost as you are forgoing interest on lending that money to an actually productive enterprise that is creating value. The net result is that funding and investment becomes more scarce because private investment is "crowded out" by people simply staking their Ethereum. This is the same harm caused by too much government debt "crowding out" private investment" This is zero sum thinking. Yes, people will lock up money, which could have been invested elsewhere. But you have to take into account the activity that happens on the chain as a result of POS, which itself will be productive presumably. Thus the capital locked up in POS will be invested productively - because the activities enabled by POS themselves will be productive. Of course, if there is nothing new that you can do as a result of POS - meaning, without POS you can already do all those things, then indeed there is no reason for POS. But the idea here ( which could be right or wrong ) is that POS will enable decentralized computation that would not happen otherwise. EDIT: to downvoter: you can't say that locking up coins detracts from productive investment without evaluating what the chain ends up doing as a result of switching to POS. I mean, if you think that nothing useful will happen on a POS chain, that's a valid argument, but that's a different argument than simply worrying about locked up coins
  - covemarkets 8y ago
    curious, what the downvoters are disagreeing with specifically in this comment.
- saurik 8y ago
  > One issue that proof of stake proponents often ignore is that proof of stake has its own costs that are roughly equivalent to the dollar cost of PoW. > Also, if the PoS staking rewards are too low, you are vulnerable to the exact same 51% attacks as PoW. "We all theoretically agree that I could have burned the most oil today (and in so doing, I will not be able to do something I could otherwise have done as my funds are locked up, which feels like a waste)" is a way way way way better scenario than "I guess we will all have to burn a bunch of oil to make sure I'm right (and in so doing we destroy our habitat, which more than feels like a waste)"... it really doesn't matter if it provides a better result than proof-of-work as long as it doesn't provide a worse one and has fewer externalities (if nothing else, as the people willing to play this game at all will have a selection bias for people who don't think the environment is important; we are already at the point where 1% of humanity's CO2 impact is from cryptocurrency mining, which is insane: "the economy is moving 1% slower as we are locking up capital in silly ways" is roughly harmless in comparison).
  - gruez 8y ago
    >"We all theoretically agree that I could have burned the most oil today [...]" is a way way way way better scenario than "I guess we will all have to burn a bunch of oil to make sure I'm right [...]" note this argument only works if the costs of burning oil (habitat destruction) is being externalized. thus, this is more of a problem with externalization than a pos vs pow issue.
    - topmonk 8y ago
      The realization of that sort of idealism is so far fetched it doesn't change the argument. Sure, you could possibly get the USA to create laws to stop externalizing the costs of co2 production, but everyone, everywhere? Including the most corrupt, war torn, and penniless places in the world? And what about the deep state? They once sold cocaine to us citizens in order to raise money for black ops. Would they think twice about mining PoW?
      - cabalamat 8y ago
- xwvvvvwx 8y ago
  > The issue is that you need to lock up money for PoS in order to mine it. That has a cost as you are forgoing interest on lending that money to an actually productive enterprise that is creating value. You do realize that stakers in PoS earn interest (paid for through inflation) on their locked collateral?
  - improv32 8y ago
    As I understand it, they earn a larger share of the money supply, as interest. But not actual economic profit stemming from some productive wealth-creating investment. Except insofar as their support of the coin itself enables ecomonic activity.
    - covemarkets 8y ago
      right, that's the main point. Why switch to POS at all? Suppose for a second ETH POS solution works as advertised. really fast and scalable. Then, there will be economic activity as a result of that speed and scalability, that would not have happened otherwise. At least that's the idea - may not ultimately work out.
    - kiriakasis 8y ago
      > productive wealth-creating investment like hashing blocks? If you believe this is a critique of PoS then it must also be a critique of PoW
- EGreg 8y ago
  By the way (as someone who thinks PoS has serious problems) even if Proof of Stake had the same dollar cost, it wouldn’t have the same energy cost. That matters significantly, now.
- mirekrusin 8y ago
  So you’re saying it’s the same but better for environment and faster, with the same dollar cost?
- tim333 8y ago
  >The issue is that you need to lock up money for PoS in order to mine it. Not really fiat money. You have to stake the coin in question but presumably you'd be holding that anyway. I don't see any real world costs that compare to the spend on electricity and GPUs you get with proof of work.
gvhst 8y ago
An interesting idea I've been pondering is PoS' effect on wealth distribution and inequality. Its clear that this system exhibits the phenomenon of "wealth begetting wealth," which isn't that different from our current society. However, the real kicker here is that the more wealth you have on a PoS network the more control you have over the network. This is baked into the system by construction, whereas in our current framework of wealth this is merely a correlation which can be controlled via legislation.
- perfmode 8y ago
  wealth is a correlate for control over legislation
- api 8y ago
  PoW has economies of scale that reward existing wealth too.
  - konschubert 8y ago
    Not just economies of scale. PoW IS a proof of capital. "I can buy one million dollars worth of mining hardware and wait a year to earn my money back" is a proof of capital.
    - xwvvvvwx 8y ago
      While it's true that the barriers to entry are quite similar in both (Eth 2.0 PoS depost is approx the same as 1 good bitcoin ASIC). However, the dynamics wrt capital are different in PoW, and it's probably more accurate to say that it represents proof of captial _burned_ (miner depreciation & electricity costs).
      - konschubert 8y ago
        Not capital burned, because it's reimbursed by the network via fees.
esotericn 8y ago
The difference is that there exists no proof that PoS is even possible. It exists purely as a rhetorical tool, used to attack the energy consumption of PoW.
- viraptor 8y ago
  What do you mean no proof? I'm not saying any of these are worth much in global economy, but they definitely exist as a proof PoS works: https://www.poslist.org/ https://www.poslist.org/
- xref 8y ago
  Soooo, how about we try it? There existed no proof PoW was even possible, and then Bitcoin tried it and here we are today.
  - icelancer 8y ago
    Nothing is stopping you from doing exactly that.
- DennisP 8y ago
  Actually there are formal proofs for the properties of various PoS designs, both in the Ethereum research community and outside it with academic projects. It's a fairly active area of research.
- latchkey 8y ago
  There are 500+ coins implementing some variation of PoS. Some are just copies, so the actual number is lower. Some are really innovative ideas that enable a whole new class of functionality that could not be accomplished with just PoW.
- Sargos 8y ago
  IOHK (Cardano) has proven that PoS is just as safe as PoW with actual mathematical proofs that are peer reviewed by actual cryptography professors. This is actually a big step forward as we now have trust that there's a system that acts the exact same way as PoW but in a vastly more energy efficient way in PoS. This almost relegates PoW to a legacy technology as there's no reason to use it anymore. https://twitter.com/IOHK_Charles/status/989540452322836480 https://twitter.com/IOHK_Charles/status/989540452322836480
DINKDINK 8y ago
PoW is a proven method to reach Byzantine-fault-tolerant consensus. PoS is a deceptive marketing ploy that the Ethereum "Foundation" has been using since 2014[1] to dupe people into buying ethereum believing that PoS will replace Proof-of-Work. [1] https://blog.ethereum.org/2014/01/15/slasher-a-punitive-proof-of-stake-algorithm/ https://blog.ethereum.org/2014/01/15/slasher-a-punitive-proo...
- fastball 8y ago
  There are other coins that already use PoS. How is it a ploy?
  - DINKDINK 8y ago
    >There are other coins that already use PoS. There are some coins that use PoS as a voting mechanism not a consensus mechanisms. If you so desired, you could do the same in any PoW chain. >How is it a ploy? Broadly small-game fallacy[1]. If PoS would work at scale ethereum developers would have already deployed it. It doesn't work. Why? An physical analogy for why PoS can never achieve BFT is: Assume 1) A cryptographic hash function is not broken 2) you live in a cave and you cannot talk the outside world You are given a letter with a series of nested hash pointers that could have only been produced if they expended resources to created. There is no way this could have been faked, even though you live in a cave, you can trust the message. PoW is a stable BFT solution. Another version of you in PoS land is also in a cave. You receive a message. It has a list of Arcade tickets that are signed by other Arcade tickets. In order to trust the veracity of this message you have to hope that someone else outside of your cave also saw this message to you because if they haven't, you could be being eclipse attacked, consequently defrauded. You cannot trust that this message hasn't been forged without contacting other people or hoping that other people have see this message. It's not stable it's not a solution to BFT. It's why after 4 years and counting Ethereum still hasn't implemented it. [1] https://unenumerated.blogspot.com/2015/05/small-game-fallacies.html https://unenumerated.blogspot.com/2015/05/small-game-fallaci...
    - DennisP 8y ago
buckie 8y ago
The problem with Proof of Work is that it is too inefficient and not that it consumes too much energy. If bitcoin could do 100k transactions per second globally, no one would be talking about Proof of Stake. We'd be talking about: how do we make mining green?
- Theodores 8y ago
  We don't. It will be bypassed. Remember those happy times when you could mine crypto at home? We know how that story unfolded and ended. Remember those happy times of a year ago when the greater fool game was being played out? We know how that story unfolded and ended. The shape-shifting blockchain moved on. There will be plenty of people that pursue their blockchain ideas with promises of revolution with people able to get kidney transplants extra betterly due to blockchain, promises of freeing people from the slavery of the 'fiat' printed money, promises of helping remote farmers in Africa have title to their land, promises of vegans able to buy their avocados with added blockchain goodness and so forth. There will be a lot of big words tantamount to pseudo science uttered complete with 'playground voices' (shouting louder if questioned) so these people will be able to get on with their save-the-world by blockchain things, in good faith, no arguments needed, picking up investors as needed. People like myself that ask the questions out of concern that folks involved don't get burned will learn to shut up. This group of people that are ideologically invested in blockchain will be making promises for solving the problems of 'making it green', leave them to it and watch how the market for crypto investments shakes out. I think that the problem will get bypassed. Bitcoin futures did not take off, really this was a failure of marketing rather than a fundamental problem. Next time round you will be able to invest in a fund with your 'fiat' currency (or real money if you want to see it that way). The bank will invest your money in Bitcoin but they won't be trading in it or using it as a means of exchange. Other crypto-currencies including Ethereum will go by the wayside and the Bitcoin maximalists will kind of win. In time this Bitcoin will be as originally promised - as good as gold. It will sit there in a bank and not in your wallet. It won't be vulnerable like a normal stock (even Apple isn't totally golden) or even property come the big crash. I am not saying that there will be a big crash in late stage, post 2008 capitalism, but what goes up must come down. Many perceived disadvantages of Bitcoin will become advantages. Not being able to do transactions quickly will become an advantage, it being too complicated for your grandma will become an advantage. When the world was on the Gold Standard the gold just sat there in Fort Knox, none of it being transacted. Bitcoin will be just the same, it will just sit there, not having to have blockchain things actually happen to it. It is in this way that the PoW problem, the slow speed problem as well as the mining-green problem gets solved. Already there are moves afoot for this new model of acceptance of how Bitcoin is going to be. Once Bitcoin is in the digital vaults of the financial institutions it will have a different store-of-value to today, people will be happy to invest in these products. It will work out fine and the people who are a tad zealous about saving-the-world-with-really-complicated-blockchain-ideas-and-no-domain-knowledge will just be heard from less and less. I am not trying to be nasty or dismissive of blockchain out of any bitterness, this is just my assessment of how things actually are panning out.
verdverm 8y ago
Does proof of authority have the most alignment with the legal infrastructure and existing wealth?
- gitgud 8y ago
  Proof of Authority would be regular fiat or centralised currency right? For example; Visa is the authoritative source of all Visa transactions...
teslaberry 8y ago
the 'post 2017' bubble truth of the answer is this: any successful network running proof of work will become a massive supercomputing cloud where only commercially centralized entities , including mining farms, and successful mining POOLS , are able to participate in a vast network which becomes dominated by a cartel of players who can bring the COST OF WORK DOWN AT SCALE. this doesn't necessarily mean the network dynamic leads to LESS decentralizatin over time, but it sort of means it does at the 'non-commercial' level of doing work. this is WORK WORK at the industrial scale. proof of stake is everything else, where network participation doesn't require WORK as the core of ensuring a cryptophraphic signing system for a bunch of data. in the modern sense, work is electricity or some proxy for electricity ( proof of compute cycles in the case of 'compute' coins like golem )
cipherpro 8y ago
Proof of stake is a solution to both the mining problem and scalability. Proof of stake, from a hardware perspective means professional machines being wholly dedicated to block production. This filters out smaller market participants who host nodes. This centralizes the network a bit, but not enough to make it not state power resistant. The trade off is enough scalability to fit current demand, and better and more efficient service as a global open computer. The bet of proof of stake vs work is really how much do we think states can influence the meme of blockchain’s uncheatable ledger, and if increases in performance is worth the risk. Either, due to the open properties of blockchain, we’ll likely see both situation play out in the open market.
sandGorgon 8y ago
I went through a nice twitter exchange with Craig Wright of BCH about the math of Pow . It was an awesome learning experience . Craig explained Pow as a multi-leader-follower Stackelberg game. While POS degrades to an oligopoly https://twitter.com/ProfFaustus/status/954320533654507520?s=19 https://twitter.com/ProfFaustus/status/954320533654507520?s=...
- keymone 8y ago
  Just FYI, that guy is a fraud and a scammer, faked evidence that he is satoshi and has consolidated an absolute majority of cryptocurrency world in an opinion that he is the most toxic thing that happened to cryptocurrency world.
- h1d 8y ago
  Craig is the guy who states himself as Satoshi, except he failed to provide any proof.
  - drexlspivey 8y ago
    Even worse, he tried to fake a proof.
h1d 8y ago
> energy consumption won't get any better unless some incredible technological achievements are made in processing capabilities or clean energy production. How would power consumption decrease if there's a technological advancement on processing capabilities? They'll just put more money to increase their hardware and not everyone will somehow feel easy on earth to never expand their hardware. > the fact that the 51% mark is becoming achievable is at best unsettling Seeing 51% should be treated as a given. The point is the system should not give incentive for them to act as such. Are you feeling unsettling to know U.S, Russia and Chinese army can combine their forces one day to take over the world?
EGreg 8y ago
CAN CRYPTOCURRENCY HELP SAVE THE WORLD? I have an idea. What about a cryptocurrency that is generated by proving you planted a tree, or other type of carbon sink? Maybe some viral MLM scheme? I originally wanted to make a cryptocurrency that encourages good, a “pay it forward” cryptocurrency. But I have come to realize that ultimately the priority is undoing the pollution and deforestation and desertification. If we can harness the power of viral mechanics and of greed but make a system that rewards only REDUCING the CO2 and other pollution, then this system would actually make a very significant impact motivating large groups of people, including those organized into corporations and other organizations, to take action. Maybe put carbon credits on a blockchain, for a start. But I would want reforestation, curbing other types of pollution, etc. to generate currency too. https://u.today/ibm-launches-carbon-credit-cryptocurrency-on-stellar-blockchain https://u.today/ibm-launches-carbon-credit-cryptocurrency-on... We have markets for crypto to trade vs fiat. The problem is, who will really prove that you did the good, and why can’t they just collude to issue more money? They would need something bigger to lose... If you have some desire to do this, please contact me at greg and the domain is qbix.com
mirekrusin 8y ago
So what amount is going to be roughly at stake for a single block? A lot? How much in %age if ether is going to be at stake? After X years, assuming better performance that is claimed by PoS?
- wmf 8y ago
  Given that so many people are using cryptocurrency as a store of value we should expect a large fraction to be staked.
dr_teh 8y ago
Can't believe after all this time, this is still up for debate... Proof-of-work is the only 'solution'. Proof-of-stake is a pipedream. You can't secure a system using itself, just ask Gödel.

139 points by jungong 8y ago

For an alternative point of view, I highly recommend that people read http://www.truthcoin.info/blog/pow-cheapest/ http://www.truthcoin.info/blog/pow-cheapest/. One issue that proof of stake proponents often ignore is that proof of stake has its own costs that are roughly equivalent to the dollar cost of PoW. The issue is that you need to lock up money for PoS in order to mine it. That has a cost as you are forgoing interest on lending that money to an actually productive enterprise that is creating value. The net result is that funding and investment becomes more scarce because private investment is "crowded out" by people simply staking their Ethereum. This is the same harm caused by too much government debt "crowding out" private investment. Also, if the PoS staking rewards are too low, you are vulnerable to the exact same 51% attacks as PoW. So it's very unsure how this would significantly reduce fees unless you are also significantly increasing your vulnerability to attack. (Now, there are caveats about the fungibility and the ease of renting PoW miners vs renting PoS tokens, but many of the same principles apply).

nowarninglabel 8y ago
Not everyone wants to lend their money (I say this as someone who runs a crowdfunding loan site). Most cryptocurrency today is just being hodl'd by folks, not put into active investments. There are also not a lot of good, trustworthy investments available to those who want to lend directly in crypto, though I'm sure we'll get more and more as time goes on.
AlexCoventry 8y ago
> read http://www.truthcoin.info/blog/pow-cheapest/ http://www.truthcoin.info/blog/pow-cheapest/. Modern PoS protocols prevent stake grinding with per-verifier VRFs and multi-round verification procedures.
- keymone 8y ago
  The complexity involved in making PoS “work” just increases the attack surface and enables political games around which workaround to implement next. And political games are decided by money, which is exactly what brings MR=MC, just like in PoW. So why bother and not use simplest possible system that guarantees security using the ultimate currency - energy?
  - AlexCoventry 8y ago
    Why bother with baroque consensus algorithms at all, and not just use USD? Because new systems with new properties will enable new capabilities.
    - keymone 8y ago
      PoS is closer to fiat than PoW. PoS is more complex and relies on trust. There is nothing “baroque” about PoW, it’s simplest, cheapest and most reliable of them all.
covemarkets 8y ago
"The issue is that you need to lock up money for PoS in order to mine it. That has a cost as you are forgoing interest on lending that money to an actually productive enterprise that is creating value. The net result is that funding and investment becomes more scarce because private investment is "crowded out" by people simply staking their Ethereum. This is the same harm caused by too much government debt "crowding out" private investment" This is zero sum thinking. Yes, people will lock up money, which could have been invested elsewhere. But you have to take into account the activity that happens on the chain as a result of POS, which itself will be productive presumably. Thus the capital locked up in POS will be invested productively - because the activities enabled by POS themselves will be productive. Of course, if there is nothing new that you can do as a result of POS - meaning, without POS you can already do all those things, then indeed there is no reason for POS. But the idea here ( which could be right or wrong ) is that POS will enable decentralized computation that would not happen otherwise. EDIT: to downvoter: you can't say that locking up coins detracts from productive investment without evaluating what the chain ends up doing as a result of switching to POS. I mean, if you think that nothing useful will happen on a POS chain, that's a valid argument, but that's a different argument than simply worrying about locked up coins
- covemarkets 8y ago
  curious, what the downvoters are disagreeing with specifically in this comment.
saurik 8y ago
> One issue that proof of stake proponents often ignore is that proof of stake has its own costs that are roughly equivalent to the dollar cost of PoW. > Also, if the PoS staking rewards are too low, you are vulnerable to the exact same 51% attacks as PoW. "We all theoretically agree that I could have burned the most oil today (and in so doing, I will not be able to do something I could otherwise have done as my funds are locked up, which feels like a waste)" is a way way way way better scenario than "I guess we will all have to burn a bunch of oil to make sure I'm right (and in so doing we destroy our habitat, which more than feels like a waste)"... it really doesn't matter if it provides a better result than proof-of-work as long as it doesn't provide a worse one and has fewer externalities (if nothing else, as the people willing to play this game at all will have a selection bias for people who don't think the environment is important; we are already at the point where 1% of humanity's CO2 impact is from cryptocurrency mining, which is insane: "the economy is moving 1% slower as we are locking up capital in silly ways" is roughly harmless in comparison).
- gruez 8y ago
  >"We all theoretically agree that I could have burned the most oil today [...]" is a way way way way better scenario than "I guess we will all have to burn a bunch of oil to make sure I'm right [...]" note this argument only works if the costs of burning oil (habitat destruction) is being externalized. thus, this is more of a problem with externalization than a pos vs pow issue.
  - topmonk 8y ago
    The realization of that sort of idealism is so far fetched it doesn't change the argument. Sure, you could possibly get the USA to create laws to stop externalizing the costs of co2 production, but everyone, everywhere? Including the most corrupt, war torn, and penniless places in the world? And what about the deep state? They once sold cocaine to us citizens in order to raise money for black ops. Would they think twice about mining PoW?
    - cabalamat 8y ago
xwvvvvwx 8y ago
> The issue is that you need to lock up money for PoS in order to mine it. That has a cost as you are forgoing interest on lending that money to an actually productive enterprise that is creating value. You do realize that stakers in PoS earn interest (paid for through inflation) on their locked collateral?
- improv32 8y ago
  As I understand it, they earn a larger share of the money supply, as interest. But not actual economic profit stemming from some productive wealth-creating investment. Except insofar as their support of the coin itself enables ecomonic activity.
  - covemarkets 8y ago
    right, that's the main point. Why switch to POS at all? Suppose for a second ETH POS solution works as advertised. really fast and scalable. Then, there will be economic activity as a result of that speed and scalability, that would not have happened otherwise. At least that's the idea - may not ultimately work out.
  - kiriakasis 8y ago
    > productive wealth-creating investment like hashing blocks? If you believe this is a critique of PoS then it must also be a critique of PoW
EGreg 8y ago
By the way (as someone who thinks PoS has serious problems) even if Proof of Stake had the same dollar cost, it wouldn’t have the same energy cost. That matters significantly, now.
mirekrusin 8y ago
So you’re saying it’s the same but better for environment and faster, with the same dollar cost?
tim333 8y ago
>The issue is that you need to lock up money for PoS in order to mine it. Not really fiat money. You have to stake the coin in question but presumably you'd be holding that anyway. I don't see any real world costs that compare to the spend on electricity and GPUs you get with proof of work.

gvhst 8y ago

An interesting idea I've been pondering is PoS' effect on wealth distribution and inequality. Its clear that this system exhibits the phenomenon of "wealth begetting wealth," which isn't that different from our current society. However, the real kicker here is that the more wealth you have on a PoS network the more control you have over the network. This is baked into the system by construction, whereas in our current framework of wealth this is merely a correlation which can be controlled via legislation.

perfmode 8y ago
wealth is a correlate for control over legislation
api 8y ago
PoW has economies of scale that reward existing wealth too.
- konschubert 8y ago
  Not just economies of scale. PoW IS a proof of capital. "I can buy one million dollars worth of mining hardware and wait a year to earn my money back" is a proof of capital.
  - xwvvvvwx 8y ago
    While it's true that the barriers to entry are quite similar in both (Eth 2.0 PoS depost is approx the same as 1 good bitcoin ASIC). However, the dynamics wrt capital are different in PoW, and it's probably more accurate to say that it represents proof of captial _burned_ (miner depreciation & electricity costs).
    - konschubert 8y ago
      Not capital burned, because it's reimbursed by the network via fees.

esotericn 8y ago

The difference is that there exists no proof that PoS is even possible. It exists purely as a rhetorical tool, used to attack the energy consumption of PoW.

viraptor 8y ago
What do you mean no proof? I'm not saying any of these are worth much in global economy, but they definitely exist as a proof PoS works: https://www.poslist.org/ https://www.poslist.org/
xref 8y ago
Soooo, how about we try it? There existed no proof PoW was even possible, and then Bitcoin tried it and here we are today.
- icelancer 8y ago
  Nothing is stopping you from doing exactly that.
DennisP 8y ago
Actually there are formal proofs for the properties of various PoS designs, both in the Ethereum research community and outside it with academic projects. It's a fairly active area of research.
latchkey 8y ago
There are 500+ coins implementing some variation of PoS. Some are just copies, so the actual number is lower. Some are really innovative ideas that enable a whole new class of functionality that could not be accomplished with just PoW.
Sargos 8y ago
IOHK (Cardano) has proven that PoS is just as safe as PoW with actual mathematical proofs that are peer reviewed by actual cryptography professors. This is actually a big step forward as we now have trust that there's a system that acts the exact same way as PoW but in a vastly more energy efficient way in PoS. This almost relegates PoW to a legacy technology as there's no reason to use it anymore. https://twitter.com/IOHK_Charles/status/989540452322836480 https://twitter.com/IOHK_Charles/status/989540452322836480

DINKDINK 8y ago

PoW is a proven method to reach Byzantine-fault-tolerant consensus. PoS is a deceptive marketing ploy that the Ethereum "Foundation" has been using since 2014[1] to dupe people into buying ethereum believing that PoS will replace Proof-of-Work. [1] https://blog.ethereum.org/2014/01/15/slasher-a-punitive-proof-of-stake-algorithm/ https://blog.ethereum.org/2014/01/15/slasher-a-punitive-proo...

fastball 8y ago
There are other coins that already use PoS. How is it a ploy?
- DINKDINK 8y ago
  >There are other coins that already use PoS. There are some coins that use PoS as a voting mechanism not a consensus mechanisms. If you so desired, you could do the same in any PoW chain. >How is it a ploy? Broadly small-game fallacy[1]. If PoS would work at scale ethereum developers would have already deployed it. It doesn't work. Why? An physical analogy for why PoS can never achieve BFT is: Assume 1) A cryptographic hash function is not broken 2) you live in a cave and you cannot talk the outside world You are given a letter with a series of nested hash pointers that could have only been produced if they expended resources to created. There is no way this could have been faked, even though you live in a cave, you can trust the message. PoW is a stable BFT solution. Another version of you in PoS land is also in a cave. You receive a message. It has a list of Arcade tickets that are signed by other Arcade tickets. In order to trust the veracity of this message you have to hope that someone else outside of your cave also saw this message to you because if they haven't, you could be being eclipse attacked, consequently defrauded. You cannot trust that this message hasn't been forged without contacting other people or hoping that other people have see this message. It's not stable it's not a solution to BFT. It's why after 4 years and counting Ethereum still hasn't implemented it. [1] https://unenumerated.blogspot.com/2015/05/small-game-fallacies.html https://unenumerated.blogspot.com/2015/05/small-game-fallaci...
  - DennisP 8y ago

buckie 8y ago

The problem with Proof of Work is that it is too inefficient and not that it consumes too much energy. If bitcoin could do 100k transactions per second globally, no one would be talking about Proof of Stake. We'd be talking about: how do we make mining green?

Theodores 8y ago
We don't. It will be bypassed. Remember those happy times when you could mine crypto at home? We know how that story unfolded and ended. Remember those happy times of a year ago when the greater fool game was being played out? We know how that story unfolded and ended. The shape-shifting blockchain moved on. There will be plenty of people that pursue their blockchain ideas with promises of revolution with people able to get kidney transplants extra betterly due to blockchain, promises of freeing people from the slavery of the 'fiat' printed money, promises of helping remote farmers in Africa have title to their land, promises of vegans able to buy their avocados with added blockchain goodness and so forth. There will be a lot of big words tantamount to pseudo science uttered complete with 'playground voices' (shouting louder if questioned) so these people will be able to get on with their save-the-world by blockchain things, in good faith, no arguments needed, picking up investors as needed. People like myself that ask the questions out of concern that folks involved don't get burned will learn to shut up. This group of people that are ideologically invested in blockchain will be making promises for solving the problems of 'making it green', leave them to it and watch how the market for crypto investments shakes out. I think that the problem will get bypassed. Bitcoin futures did not take off, really this was a failure of marketing rather than a fundamental problem. Next time round you will be able to invest in a fund with your 'fiat' currency (or real money if you want to see it that way). The bank will invest your money in Bitcoin but they won't be trading in it or using it as a means of exchange. Other crypto-currencies including Ethereum will go by the wayside and the Bitcoin maximalists will kind of win. In time this Bitcoin will be as originally promised - as good as gold. It will sit there in a bank and not in your wallet. It won't be vulnerable like a normal stock (even Apple isn't totally golden) or even property come the big crash. I am not saying that there will be a big crash in late stage, post 2008 capitalism, but what goes up must come down. Many perceived disadvantages of Bitcoin will become advantages. Not being able to do transactions quickly will become an advantage, it being too complicated for your grandma will become an advantage. When the world was on the Gold Standard the gold just sat there in Fort Knox, none of it being transacted. Bitcoin will be just the same, it will just sit there, not having to have blockchain things actually happen to it. It is in this way that the PoW problem, the slow speed problem as well as the mining-green problem gets solved. Already there are moves afoot for this new model of acceptance of how Bitcoin is going to be. Once Bitcoin is in the digital vaults of the financial institutions it will have a different store-of-value to today, people will be happy to invest in these products. It will work out fine and the people who are a tad zealous about saving-the-world-with-really-complicated-blockchain-ideas-and-no-domain-knowledge will just be heard from less and less. I am not trying to be nasty or dismissive of blockchain out of any bitterness, this is just my assessment of how things actually are panning out.

verdverm 8y ago

Does proof of authority have the most alignment with the legal infrastructure and existing wealth?

gitgud 8y ago
Proof of Authority would be regular fiat or centralised currency right? For example; Visa is the authoritative source of all Visa transactions...

teslaberry 8y ago

the 'post 2017' bubble truth of the answer is this: any successful network running proof of work will become a massive supercomputing cloud where only commercially centralized entities , including mining farms, and successful mining POOLS , are able to participate in a vast network which becomes dominated by a cartel of players who can bring the COST OF WORK DOWN AT SCALE. this doesn't necessarily mean the network dynamic leads to LESS decentralizatin over time, but it sort of means it does at the 'non-commercial' level of doing work. this is WORK WORK at the industrial scale. proof of stake is everything else, where network participation doesn't require WORK as the core of ensuring a cryptophraphic signing system for a bunch of data. in the modern sense, work is electricity or some proxy for electricity ( proof of compute cycles in the case of 'compute' coins like golem )

cipherpro 8y ago

Proof of stake is a solution to both the mining problem and scalability. Proof of stake, from a hardware perspective means professional machines being wholly dedicated to block production. This filters out smaller market participants who host nodes. This centralizes the network a bit, but not enough to make it not state power resistant. The trade off is enough scalability to fit current demand, and better and more efficient service as a global open computer. The bet of proof of stake vs work is really how much do we think states can influence the meme of blockchain’s uncheatable ledger, and if increases in performance is worth the risk. Either, due to the open properties of blockchain, we’ll likely see both situation play out in the open market.

sandGorgon 8y ago

I went through a nice twitter exchange with Craig Wright of BCH about the math of Pow . It was an awesome learning experience . Craig explained Pow as a multi-leader-follower Stackelberg game. While POS degrades to an oligopoly https://twitter.com/ProfFaustus/status/954320533654507520?s=19 https://twitter.com/ProfFaustus/status/954320533654507520?s=...

keymone 8y ago
Just FYI, that guy is a fraud and a scammer, faked evidence that he is satoshi and has consolidated an absolute majority of cryptocurrency world in an opinion that he is the most toxic thing that happened to cryptocurrency world.
h1d 8y ago
Craig is the guy who states himself as Satoshi, except he failed to provide any proof.
- drexlspivey 8y ago
  Even worse, he tried to fake a proof.

h1d 8y ago

> energy consumption won't get any better unless some incredible technological achievements are made in processing capabilities or clean energy production. How would power consumption decrease if there's a technological advancement on processing capabilities? They'll just put more money to increase their hardware and not everyone will somehow feel easy on earth to never expand their hardware. > the fact that the 51% mark is becoming achievable is at best unsettling Seeing 51% should be treated as a given. The point is the system should not give incentive for them to act as such. Are you feeling unsettling to know U.S, Russia and Chinese army can combine their forces one day to take over the world?

EGreg 8y ago

CAN CRYPTOCURRENCY HELP SAVE THE WORLD? I have an idea. What about a cryptocurrency that is generated by proving you planted a tree, or other type of carbon sink? Maybe some viral MLM scheme? I originally wanted to make a cryptocurrency that encourages good, a “pay it forward” cryptocurrency. But I have come to realize that ultimately the priority is undoing the pollution and deforestation and desertification. If we can harness the power of viral mechanics and of greed but make a system that rewards only REDUCING the CO2 and other pollution, then this system would actually make a very significant impact motivating large groups of people, including those organized into corporations and other organizations, to take action. Maybe put carbon credits on a blockchain, for a start. But I would want reforestation, curbing other types of pollution, etc. to generate currency too. https://u.today/ibm-launches-carbon-credit-cryptocurrency-on-stellar-blockchain https://u.today/ibm-launches-carbon-credit-cryptocurrency-on... We have markets for crypto to trade vs fiat. The problem is, who will really prove that you did the good, and why can’t they just collude to issue more money? They would need something bigger to lose... If you have some desire to do this, please contact me at greg and the domain is qbix.com

mirekrusin 8y ago

So what amount is going to be roughly at stake for a single block? A lot? How much in %age if ether is going to be at stake? After X years, assuming better performance that is claimed by PoS?

wmf 8y ago
Given that so many people are using cryptocurrency as a store of value we should expect a large fraction to be staked.

dr_teh 8y ago

Can't believe after all this time, this is still up for debate... Proof-of-work is the only 'solution'. Proof-of-stake is a pipedream. You can't secure a system using itself, just ask Gödel.