5 ms·

Ethereum proof of stake is coming and should fix that elegantly.

by JohnJamesRambo 7y ago

all_blue_chucks 7y ago
I hear it's powered by cold fusion and Half Life 3.
- away_throw 7y ago
  50% since they announced a third Half Life game.
rsynnott 7y ago
I feel like that’s been coming any day now since about 2014. And seems like a TERRIBLE idea, anyway. The rich get richer, built right into the system!
- spir 7y ago
  Phase 0 of Ethereum v2 arrives in Q1 2020. Coming since 2014 but finally arriving :) Proof of stake reduces the issuance of new ETH to pay for the cost of securing the network. It's cheaper than paying miners. And anybody can buy ETH to stake so it's more egalitarian than mining which requires economies of scale in hardware and electricity.
  - tfha 7y ago
    Doesn't phase 0 exclude the ability to transfer money? The whole point of a "currency"???
    - nullc 7y ago
      My understanding is that Phase 0 features the ability to lock up eth and take it out of circulation. You might consider if perhaps the parties in control of that system have a different idea of its point than you do.
    - meirdavis 7y ago
      Correct. Phase 0 isn't useful by itself and phase 1 isn't that useful either. Phase 2 is when people can actually start using ETH2 instead of ETH1.
  - celticninja 7y ago
    PoS would be more egalitarian if it was that way from the start, however as it is transitioning from PoW this means that anyone that bought in early, now has an opportunity to solidify their position. For new entrants to reach the same level of investment would be significantly higher. So the ETH rich get richer and it widens the gap.
- jdnenej 7y ago
  PoW is exactly the same. The rich can afford the most hardware and electicity. PoS just short circuits the burning power step. It's also the same as bank interest.
  - rsynnott 7y ago
    When you put your money in a bank, it doesn’t just sit there. Deposits, while possibly not the most efficient way to do it, support useful economic activity. Proof of work is also terrible, obviously. Proof of stake seems like an awful thing to _aspire_ to, tho.
    - Zamicol 7y ago
      The minimum stake of 32 eth is probably going to require something like a laptop to run. Those with larger stakes are going to need to devote more computer resources to the network.
      - gerikson 7y ago
        32 ETH is ~$4,800 at today's price of $151.07[1]. What's the expected "payout" for this stake? [1] CoinMarketCap used as source.
        DennisP 7y ago
        Expected payout depends on the total amount staked. With a large amount staked it's only a couple percent annually; with a small amount it's up to 18% annually. The idea is an equilibrium will be reached in the middle somewhere.
        gerikson 7y ago
        That's an interesting formula.
        lawfulcactus 7y ago
        How are participants prevented from simply splitting up their stakes?
- wyldfire 7y ago
  Proof-of-stake has been in use in other non-Ethereum cryptocoins for a very long time [1] [2]. In Nano's case, there's no transaction fees paid to stakeholders (nor their delegated representatives). [1] https://en.wikipedia.org/wiki/Peercoin https://en.wikipedia.org/wiki/Peercoin [2] https://en.bitcoinwiki.org/wiki/Nano https://en.bitcoinwiki.org/wiki/Nano
  - _Kristijan_ 7y ago
    Nano consensus mechanism is called Open Representative Voting (ORV). It has similar sides to proof-of-stake, but differs in important places. e.g. it is less a "stake" than a voting weight that the users themselves distribute to nodes of their choice (or their own). ORV's self-description at: https://docs.nano.org/glossary/#open-representative-voting-orv https://docs.nano.org/glossary/#open-representative-voting-o...
    - wyldfire 7y ago
      > or their own Sure, it's an optionally-delegated-proof-of-stake. In practice, most do delegate their stake. But at the end of the day the "voting weight" that secures transactions is majority stake and not a proof of work.
- DennisP 7y ago
  The rich get richer in proof of work, too. It's not like those giant mining rigs are free. It's also true in bank accounts; the more money deposited, the more interest you earn. At least in proof of stake everybody gets the same interest rate regardless of deposit size. Banks generally give better rates to larger accounts.
- qes 7y ago
  Decred set up it's mixed PoS/PoW so that there is an opportunity cost to staking - your funds are locked for a random amount of time up to several months. The staking rewards are also not enough to keep indefinitely staking. Your share of stake will continuously decrease, and, aside from ticket splitting, you would need to acquire more decred along the way to continue staking at the same level.
- hanniabu 7y ago
  Ethereum wasn't launched until July 2015 so there's one inaccuracy. Also given you're on HN you should likely be aware that (a) timelines are difficult to estimate and often things take much longer than you thought, even more so with being the first to do something, (b) there's a lot of discussion and review for financial software, (c) it's much harder to change the carriage of a moving train
  - ppf 7y ago
    (d) performing work on a moving train is a bug, not a feature.
DarthGhandi 7y ago
> is coming Yeah that was 5 years ago too if you don't remember. It's an incredibly difficult problem and anyone claiming to have actually solved it in a decentralised way that proof-of-work did is a charlatan. Given all the money slushing around in cryptocurrency looking for a problem to solve I'd argue it's an intractable issue that needs yet another breakthrough rather than marketing and bubble hype.

Ethereum proof of stake is coming and should fix that elegantly.

all_blue_chucks 7y ago

I hear it's powered by cold fusion and Half Life 3.

away_throw 7y ago
50% since they announced a third Half Life game.

rsynnott 7y ago

I feel like that’s been coming any day now since about 2014. And seems like a TERRIBLE idea, anyway. The rich get richer, built right into the system!

spir 7y ago
Phase 0 of Ethereum v2 arrives in Q1 2020. Coming since 2014 but finally arriving :) Proof of stake reduces the issuance of new ETH to pay for the cost of securing the network. It's cheaper than paying miners. And anybody can buy ETH to stake so it's more egalitarian than mining which requires economies of scale in hardware and electricity.
- tfha 7y ago
  Doesn't phase 0 exclude the ability to transfer money? The whole point of a "currency"???
  - nullc 7y ago
    My understanding is that Phase 0 features the ability to lock up eth and take it out of circulation. You might consider if perhaps the parties in control of that system have a different idea of its point than you do.
  - meirdavis 7y ago
    Correct. Phase 0 isn't useful by itself and phase 1 isn't that useful either. Phase 2 is when people can actually start using ETH2 instead of ETH1.
- celticninja 7y ago
  PoS would be more egalitarian if it was that way from the start, however as it is transitioning from PoW this means that anyone that bought in early, now has an opportunity to solidify their position. For new entrants to reach the same level of investment would be significantly higher. So the ETH rich get richer and it widens the gap.
jdnenej 7y ago
PoW is exactly the same. The rich can afford the most hardware and electicity. PoS just short circuits the burning power step. It's also the same as bank interest.
- rsynnott 7y ago
  When you put your money in a bank, it doesn’t just sit there. Deposits, while possibly not the most efficient way to do it, support useful economic activity. Proof of work is also terrible, obviously. Proof of stake seems like an awful thing to _aspire_ to, tho.
  - Zamicol 7y ago
    The minimum stake of 32 eth is probably going to require something like a laptop to run. Those with larger stakes are going to need to devote more computer resources to the network.
    - gerikson 7y ago
      32 ETH is ~$4,800 at today's price of $151.07[1]. What's the expected "payout" for this stake? [1] CoinMarketCap used as source.
      - DennisP 7y ago
        Expected payout depends on the total amount staked. With a large amount staked it's only a couple percent annually; with a small amount it's up to 18% annually. The idea is an equilibrium will be reached in the middle somewhere.
        gerikson 7y ago
        That's an interesting formula.
        lawfulcactus 7y ago
        How are participants prevented from simply splitting up their stakes?
wyldfire 7y ago
Proof-of-stake has been in use in other non-Ethereum cryptocoins for a very long time [1] [2]. In Nano's case, there's no transaction fees paid to stakeholders (nor their delegated representatives). [1] https://en.wikipedia.org/wiki/Peercoin https://en.wikipedia.org/wiki/Peercoin [2] https://en.bitcoinwiki.org/wiki/Nano https://en.bitcoinwiki.org/wiki/Nano
- _Kristijan_ 7y ago
  Nano consensus mechanism is called Open Representative Voting (ORV). It has similar sides to proof-of-stake, but differs in important places. e.g. it is less a "stake" than a voting weight that the users themselves distribute to nodes of their choice (or their own). ORV's self-description at: https://docs.nano.org/glossary/#open-representative-voting-orv https://docs.nano.org/glossary/#open-representative-voting-o...
  - wyldfire 7y ago
    > or their own Sure, it's an optionally-delegated-proof-of-stake. In practice, most do delegate their stake. But at the end of the day the "voting weight" that secures transactions is majority stake and not a proof of work.
DennisP 7y ago
The rich get richer in proof of work, too. It's not like those giant mining rigs are free. It's also true in bank accounts; the more money deposited, the more interest you earn. At least in proof of stake everybody gets the same interest rate regardless of deposit size. Banks generally give better rates to larger accounts.
qes 7y ago
Decred set up it's mixed PoS/PoW so that there is an opportunity cost to staking - your funds are locked for a random amount of time up to several months. The staking rewards are also not enough to keep indefinitely staking. Your share of stake will continuously decrease, and, aside from ticket splitting, you would need to acquire more decred along the way to continue staking at the same level.
hanniabu 7y ago
Ethereum wasn't launched until July 2015 so there's one inaccuracy. Also given you're on HN you should likely be aware that (a) timelines are difficult to estimate and often things take much longer than you thought, even more so with being the first to do something, (b) there's a lot of discussion and review for financial software, (c) it's much harder to change the carriage of a moving train
- ppf 7y ago
  (d) performing work on a moving train is a bug, not a feature.

DarthGhandi 7y ago

> is coming Yeah that was 5 years ago too if you don't remember. It's an incredibly difficult problem and anyone claiming to have actually solved it in a decentralised way that proof-of-work did is a charlatan. Given all the money slushing around in cryptocurrency looking for a problem to solve I'd argue it's an intractable issue that needs yet another breakthrough rather than marketing and bubble hype.