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The author says that PoS algorithms are centralized at heart, but does anyone know how this applies to Nano? I read the paper a few years ago and couldn't find

The author says that PoS algorithms are centralized at heart, but does anyone know how this applies to Nano? I read the paper a few years ago and couldn't find any obvious disadvantages or centralization to it, and it has PoS, no fees, and instant sending. It's always seemed too good to be true, but I've never seen anyone mention a big downside to it, so I've always wondered.

mattwilsonn888 6y ago
It's a bit of a strange comment. One could certainly argue that in a proof of stake system a dynamic naturally exists where those who stake more earn more, and can stake more to earn more to stake more... The thing is though is you could say the same for traditional crypto mining. In either situation one person holding too many opportunities to author new blocks is a chance to double spend (though highly mitigated by simply waiting longer for newer blocks to come through before accepting trades).
- StavrosK 6y ago
  Would you say that the existing PoS systems (like Ethereum 2) aren't as centralized as he mentions, then?
  - latchkey 6y ago
    ETH2 doesn't 'exist'. There is a heartbeat chain right now, but it doesn't actually do anything. Getting to the next step(s) is the hard part. Full PoS decentralization does not exist yet. Many attempts exist. Some better than others. Sadly, the complexity (rube goldberg) of PoS far outweighs the simplicity of PoW.
    - StavrosK 6y ago
      > Full PoS decentralization does not exist yet. How do you define "full PoS decentralization"? That sounds a bit no-true-Scotsmany. > Sadly, the complexity (rube goldberg) of PoS far outweighs the simplicity of PoW. Yes, and the huge energy usage of PoW far outweighs the zero energy usage of PoS. That's the tradeoff.
      - latchkey 6y ago
        It doesn't exist because ETH2 doesn't exist. It is the one blockchain that I see as being focused on full decentralization, instead of just stopping at variations of tendermint and a bunch of "approved" validators. Contrary to popular belief, PoS isn't zero energy usage. My very very very large ETH1 gpu mining operation sits next door to the same large data centers powering all the cloud providers. All getting power from the same hydrodams that would just go to waste otherwise. It isn't like the power can be easily used in other ways... transmission of power is expensive and intrusive. Bitcoin is an issue because of supply/demand... when the reward goes away, so will the miners. Difficulty will drop to more acceptable levels to cover the loss. ETH1/ethash at least tries to peg to a specific type of hardware that actually has a better roi with older models and doesn't need the latest / greatest. The tricky bit to make ETH2 work will be the use of zkSnarks. What nobody talks about is how compute (energy) heavy they are currently. It is a bit of moving the goal post if we're going to just end up building asic's again.
- charcircuit 6y ago
  >One could certainly argue that in a proof of stake system a dynamic naturally exists where those who stake more earn more, and can stake more to earn more to stake more... Everyone grows at the same rate though. If someone stakes 1% of the total pool and someone stakes 99%, then after making more they will still be at a 1:99 ratio.
dandanua 6y ago
NANO has delegated Proof-of-Stake. It's the representatives who vote on transactions. And it's supposed they don't have incentives to ruin the network. It's true, but a single representative can be captured by villains, who CAN have incentives to ruin the network. I actually like NANO, their blockchain structure is certainly next level, but it also has vulnerabilities due to PoS consensus.
- StavrosK 6y ago
  Hmm, does it guard against minority representatives being able to do damage? If you have thousands of representatives, capturing one won't do much, correct?
  - dandanua 6y ago
    If his vote is not decisive then yes. But, in theory, a vote of the representative that has low stake can be decisive. The commitment of two conflicting votes can split the network, thereby ruining it.
    - StavrosK 6y ago
      Ahh, that's interesting, thank you. It sounds like a low probability scenario, but not impossible.
      - dandanua 6y ago
        You can try to raise this probability by DDoSing representatives with high stakes.
    - a1369209993 6y ago
      > The commitment of two conflicting votes can split the network, thereby ruining it. Couldn't this be repaired (with probability something like 1-O(compromised stake) per attempt), by exhibiting (in, say, lexicographic order) the two conflicting blocks (thereby invalidating both), and continuing with the chain? Eg, crude sketch off the top of my head: A -> B1 A -> B2 A -> B2 -> C2 # built off conflicting chain A -> b1 -> b2 -> C3 # resolved chain (block b dead) The resolved chain would have more blocks initially (2 vs 1), and roughly twice the number of nodes supporting it (since the split chains would by construction be valid to only about half the network each. I'm not sure the logistics of this works out, so non-rhetorically: could this work? I'm cribbing some intuitions from proof-of-work designs, but it seems like it ought to be possible in principle.
charcircuit 6y ago
Nano uses open representative voting. There is no staking.

mattwilsonn888 6y ago

It's a bit of a strange comment. One could certainly argue that in a proof of stake system a dynamic naturally exists where those who stake more earn more, and can stake more to earn more to stake more... The thing is though is you could say the same for traditional crypto mining. In either situation one person holding too many opportunities to author new blocks is a chance to double spend (though highly mitigated by simply waiting longer for newer blocks to come through before accepting trades).

StavrosK 6y ago
Would you say that the existing PoS systems (like Ethereum 2) aren't as centralized as he mentions, then?
- latchkey 6y ago
  ETH2 doesn't 'exist'. There is a heartbeat chain right now, but it doesn't actually do anything. Getting to the next step(s) is the hard part. Full PoS decentralization does not exist yet. Many attempts exist. Some better than others. Sadly, the complexity (rube goldberg) of PoS far outweighs the simplicity of PoW.
  - StavrosK 6y ago
    > Full PoS decentralization does not exist yet. How do you define "full PoS decentralization"? That sounds a bit no-true-Scotsmany. > Sadly, the complexity (rube goldberg) of PoS far outweighs the simplicity of PoW. Yes, and the huge energy usage of PoW far outweighs the zero energy usage of PoS. That's the tradeoff.
    - latchkey 6y ago
      It doesn't exist because ETH2 doesn't exist. It is the one blockchain that I see as being focused on full decentralization, instead of just stopping at variations of tendermint and a bunch of "approved" validators. Contrary to popular belief, PoS isn't zero energy usage. My very very very large ETH1 gpu mining operation sits next door to the same large data centers powering all the cloud providers. All getting power from the same hydrodams that would just go to waste otherwise. It isn't like the power can be easily used in other ways... transmission of power is expensive and intrusive. Bitcoin is an issue because of supply/demand... when the reward goes away, so will the miners. Difficulty will drop to more acceptable levels to cover the loss. ETH1/ethash at least tries to peg to a specific type of hardware that actually has a better roi with older models and doesn't need the latest / greatest. The tricky bit to make ETH2 work will be the use of zkSnarks. What nobody talks about is how compute (energy) heavy they are currently. It is a bit of moving the goal post if we're going to just end up building asic's again.
charcircuit 6y ago
>One could certainly argue that in a proof of stake system a dynamic naturally exists where those who stake more earn more, and can stake more to earn more to stake more... Everyone grows at the same rate though. If someone stakes 1% of the total pool and someone stakes 99%, then after making more they will still be at a 1:99 ratio.

dandanua 6y ago

NANO has delegated Proof-of-Stake. It's the representatives who vote on transactions. And it's supposed they don't have incentives to ruin the network. It's true, but a single representative can be captured by villains, who CAN have incentives to ruin the network. I actually like NANO, their blockchain structure is certainly next level, but it also has vulnerabilities due to PoS consensus.

StavrosK 6y ago
Hmm, does it guard against minority representatives being able to do damage? If you have thousands of representatives, capturing one won't do much, correct?
- dandanua 6y ago
  If his vote is not decisive then yes. But, in theory, a vote of the representative that has low stake can be decisive. The commitment of two conflicting votes can split the network, thereby ruining it.
  - StavrosK 6y ago
    Ahh, that's interesting, thank you. It sounds like a low probability scenario, but not impossible.
    - dandanua 6y ago
      You can try to raise this probability by DDoSing representatives with high stakes.
  - a1369209993 6y ago
    > The commitment of two conflicting votes can split the network, thereby ruining it. Couldn't this be repaired (with probability something like 1-O(compromised stake) per attempt), by exhibiting (in, say, lexicographic order) the two conflicting blocks (thereby invalidating both), and continuing with the chain? Eg, crude sketch off the top of my head: A -> B1 A -> B2 A -> B2 -> C2 # built off conflicting chain A -> b1 -> b2 -> C3 # resolved chain (block b dead) The resolved chain would have more blocks initially (2 vs 1), and roughly twice the number of nodes supporting it (since the split chains would by construction be valid to only about half the network each. I'm not sure the logistics of this works out, so non-rhetorically: could this work? I'm cribbing some intuitions from proof-of-work designs, but it seems like it ought to be possible in principle.

charcircuit 6y ago

Nano uses open representative voting. There is no staking.