7 ms·

That’s true. But it’s important to point out that proof-of-work (PoW) is more decentralized than e.g. proof-of-stake (PoS). For example, with PoW you only need

by runeks 6y ago

That’s true. But it’s important to point out that proof-of-work (PoW) is more decentralized than e.g. proof-of-stake (PoS). For example, with PoW you only need a single honest node to arrive at the correct chain during initial sync. With PoS there is no such guarantee, since there’s no inherent way for a new node joining the network to decide which chain to pick when presented with two different, but equally valid, chains.

mratsim 6y ago
There can't be 2 equally valid chains or your protocol is buggy. One chain must have more votes from stakers than the other after a while.
- stickfigure 6y ago
  The chains themselves determine who has more stakers. The whole concept is self-referential and flawed.
  - mratsim 6y ago
    Well of course they have to determine it themselves otherwise they are centralized and dependent on a third-party. Please expand on what you think is flawed and what are the downsides.
    - stickfigure 6y ago
      A blockchain is, fundamentally, a consensus mechanism which decides which transactions are valid. Proof of Stake is self-referential; the parties with value at stake have value because the blockchain says they do. It's a perpetual motion machine. When the shit hits the fan (say, a controversial fork) the people who thought they had control ("stake") will learn who really makes the decisions WRT which blockchain is canonical. That would be the exchanges, and what they agree on will rule no matter who stakes what. The reason Proof of Work works is because someone has to pony up the compute power. The emperor has no clothes. Sorry.
    - ric2b 6y ago
      > Well of course they have to determine it themselves otherwise they are centralized and dependent on a third-party. PoW doesn't have that problem. > Please expand on what you think is flawed and what are the downsides. If I make a parallel version of the chain where I got all the mining rewards from block one and ended up with a majority stake, how do you decide between that and the other chain?
dylkil 6y ago
>For example, with PoW you only need a single honest node to arrive at the correct chain during initial sync. With PoS there is no such guarantee, since there’s no inherent way for a new node joining the network to decide which chain to pick when presented with two different, but equally valid, chains. What youve said here makes very little sense.
nootropicat 6y ago
>But it’s important to point out that proof-of-work (PoW) is more decentralized than e.g. proof-of-stake (PoS). The opposite is true in multiple aspects. PoW has infinite economies of scale which inevitably leads to total centralization as all miners but the most efficient one have to shutdown. PoS can stay decentralized forever because new stakers arriving aren't going to make existing staking unprofitable, forcing them to shutdown, as actual running costs are negligible. Regarding resistance to government interference aspect PoS absolutely demolishes PoW. Overwhelming majority of mining is done in big industrial warehouses owned by registered companies. They're trivial to find, very hard to relocate and easy to take physical control of. In contrast, staking only requires a node, which could conceivably even be on a satellite, on a ship, or anonymized using tor or other anonymity network. >For example, with PoW you only need a single honest node to arrive at the correct chain during initial sync This argument doesn't make sense, from the start the user has to choose some specific chain and has to download node software for it. Even soft forks starting from the same genesis block may require a manual choice, as it's possible for old nodes to diverge from the new if majority of miners ignores the soft fork. Chain names are not defined by code over medium to long term, but by dynamic social consensus.
- DaftDank 6y ago
  I've been mining for about 4 years now (1btc/month and 35-40eth/month since March 2017), and this is the first time I've heard someone trying to say PoS would lead to MORE decentralization. To be fair, I don't regularly converse online with other miners. I mean, I see what your arguments are here, but I'm just not sure I agree. Usually the only people trying to promote PoS are the ones who are financially well-off enough to buy the masternodes. You could make the same argument for mining -- to do it on any worthwhile scale you better be prepared to spend a minimum of $500k -- but "worthwhile" is subjective, and some people are fine only making a residual income off of their mining, because they feel like they are contributing to the "cause" -- to keep the network flowing -- amongst other reasons. Initially, I got started with mining out of pure idealism about decentralization, anonymous currencies, and the cypherpunk roots of it all. That turned into me making significant investments to mine on a larger scale. Maybe people doing it for those reasons will be less important as time goes on and it's more mainstream...I don't know. My other business is legal MJ cultivation in California and Michigan, and it's the same thing in that industry -- the only people wanting, or not minding, the expensive licensing and startup costs in California are the well-financed companies who can afford it all, who can wait many years for profits if necessary. Everyone else wants a way for easy entrance in the market, low licensing costs, etc. As for government interference, I was a "traditional market" operator for ~14 years in the MJ business, and have experience with avoiding scrutiny from the government. In fact, the issues with bitcoin mining are identical to that of growing marijuana on a large scale -- exhausting large amounts of heat, the intake of large amounts of fresh air or cooling BTU's, using large amounts of electricity, the need for good airflow in the facility, etc. With that said, you could structure your mining operation so that only a very targeted, focused investigation could find you -- it wouldn't be easy to "fish" and find it. For example, the main indicator would be the electricity usage, but there are tons of legitimate businesses that use far more electricity than a mining operation. Establish a business that is in that industry, buy a warehouse for that purpose, get your electrical installed, and then run all your miners through your own VPN or Tor (I've never tried to run them on Tor, because I was always worried about speed/connection problems.) They would see large electrical usage, yes, but that is normal for your registered business. In this hypothetical government overreach scenario, hiding a mining business -- if you really had to -- wouldn't be any more difficult than hiding a large scale grow operation, or a meth lab, or anything illicit really. You just have to know what you are doing, but people have been doing this for decades and decades without problem.

by runeks 6y ago

mratsim 6y ago

There can't be 2 equally valid chains or your protocol is buggy. One chain must have more votes from stakers than the other after a while.

stickfigure 6y ago
The chains themselves determine who has more stakers. The whole concept is self-referential and flawed.
- mratsim 6y ago
  Well of course they have to determine it themselves otherwise they are centralized and dependent on a third-party. Please expand on what you think is flawed and what are the downsides.
  - stickfigure 6y ago
    A blockchain is, fundamentally, a consensus mechanism which decides which transactions are valid. Proof of Stake is self-referential; the parties with value at stake have value because the blockchain says they do. It's a perpetual motion machine. When the shit hits the fan (say, a controversial fork) the people who thought they had control ("stake") will learn who really makes the decisions WRT which blockchain is canonical. That would be the exchanges, and what they agree on will rule no matter who stakes what. The reason Proof of Work works is because someone has to pony up the compute power. The emperor has no clothes. Sorry.
  - ric2b 6y ago
    > Well of course they have to determine it themselves otherwise they are centralized and dependent on a third-party. PoW doesn't have that problem. > Please expand on what you think is flawed and what are the downsides. If I make a parallel version of the chain where I got all the mining rewards from block one and ended up with a majority stake, how do you decide between that and the other chain?

dylkil 6y ago

>For example, with PoW you only need a single honest node to arrive at the correct chain during initial sync. With PoS there is no such guarantee, since there’s no inherent way for a new node joining the network to decide which chain to pick when presented with two different, but equally valid, chains. What youve said here makes very little sense.

nootropicat 6y ago

>But it’s important to point out that proof-of-work (PoW) is more decentralized than e.g. proof-of-stake (PoS). The opposite is true in multiple aspects. PoW has infinite economies of scale which inevitably leads to total centralization as all miners but the most efficient one have to shutdown. PoS can stay decentralized forever because new stakers arriving aren't going to make existing staking unprofitable, forcing them to shutdown, as actual running costs are negligible. Regarding resistance to government interference aspect PoS absolutely demolishes PoW. Overwhelming majority of mining is done in big industrial warehouses owned by registered companies. They're trivial to find, very hard to relocate and easy to take physical control of. In contrast, staking only requires a node, which could conceivably even be on a satellite, on a ship, or anonymized using tor or other anonymity network. >For example, with PoW you only need a single honest node to arrive at the correct chain during initial sync This argument doesn't make sense, from the start the user has to choose some specific chain and has to download node software for it. Even soft forks starting from the same genesis block may require a manual choice, as it's possible for old nodes to diverge from the new if majority of miners ignores the soft fork. Chain names are not defined by code over medium to long term, but by dynamic social consensus.

DaftDank 6y ago
I've been mining for about 4 years now (1btc/month and 35-40eth/month since March 2017), and this is the first time I've heard someone trying to say PoS would lead to MORE decentralization. To be fair, I don't regularly converse online with other miners. I mean, I see what your arguments are here, but I'm just not sure I agree. Usually the only people trying to promote PoS are the ones who are financially well-off enough to buy the masternodes. You could make the same argument for mining -- to do it on any worthwhile scale you better be prepared to spend a minimum of $500k -- but "worthwhile" is subjective, and some people are fine only making a residual income off of their mining, because they feel like they are contributing to the "cause" -- to keep the network flowing -- amongst other reasons. Initially, I got started with mining out of pure idealism about decentralization, anonymous currencies, and the cypherpunk roots of it all. That turned into me making significant investments to mine on a larger scale. Maybe people doing it for those reasons will be less important as time goes on and it's more mainstream...I don't know. My other business is legal MJ cultivation in California and Michigan, and it's the same thing in that industry -- the only people wanting, or not minding, the expensive licensing and startup costs in California are the well-financed companies who can afford it all, who can wait many years for profits if necessary. Everyone else wants a way for easy entrance in the market, low licensing costs, etc. As for government interference, I was a "traditional market" operator for ~14 years in the MJ business, and have experience with avoiding scrutiny from the government. In fact, the issues with bitcoin mining are identical to that of growing marijuana on a large scale -- exhausting large amounts of heat, the intake of large amounts of fresh air or cooling BTU's, using large amounts of electricity, the need for good airflow in the facility, etc. With that said, you could structure your mining operation so that only a very targeted, focused investigation could find you -- it wouldn't be easy to "fish" and find it. For example, the main indicator would be the electricity usage, but there are tons of legitimate businesses that use far more electricity than a mining operation. Establish a business that is in that industry, buy a warehouse for that purpose, get your electrical installed, and then run all your miners through your own VPN or Tor (I've never tried to run them on Tor, because I was always worried about speed/connection problems.) They would see large electrical usage, yes, but that is normal for your registered business. In this hypothetical government overreach scenario, hiding a mining business -- if you really had to -- wouldn't be any more difficult than hiding a large scale grow operation, or a meth lab, or anything illicit really. You just have to know what you are doing, but people have been doing this for decades and decades without problem.