4 ms·

It’s plutocracy with emojis. Other than that - absolutely nothing

rthomas6 5y ago
I'm not trying to be obtuse, but why is authority tied to amount of coin owned any more plutocratic than authority tied to amount of computing resources used? Both cost money, and both scale power with amount of money sunk into it.
- stirfish 5y ago
  I don't think it is any more plutocratic. It's about the same.
  - meowface 5y ago
    What other options are possible for blockchain networks? All I've seen so far are plutocracy (PoW/PoS blockchains) and oligarchy (centralized blockchains).
    - inter_netuser 5y ago
      PoW is not a plutocracy because miners cannot dictate the protocol rules. Not even a 51% miner could do that, a common misconception. They at most can refuse to process transactions. Users have prevailed agaist miners and large business in Bitcon forkwors, which failed to force their agenda on the users. This is at least some empirical proof in support that Bitcoin is not a plutocracy. Miners have large farms that can be bankrupted by users simply deciding to change the hashing algo. No such option in PoS. In PoS, largest wallets dictate changes. Liquidity begets more liquidity, aka the rich get richer, and such effect has a centralizing effect on PoS. All PoS project to date have failed.
    - mac01021 5y ago
      I don't have a great grasp yet of how PoS and other non-PoW consensus protocols work. But if I ever grok the building blocks fully enough, I'd like to see if I can devise a system based on "proof of receipt" in which the act of receiving X coins grants you the ability to "settle" a set of blocks totaling a*X worth of transactions (for some constant a). Like in other blockchains, the node selected to settle a block of transactions gets to keep some or all of the transaction fees for that block. But instead of continually getting selected by virtue of continuing to hold a large amount of coin, you could only continue to be selected by continuing to receive coin (presumably in return for goods and services). The transaction fees and the constant $a$ would have to bee chosen such that you couldn't turn a profit by sending lots of money to yourself. But I think that would allow for a fair system with a good incentive structure.
      - meowface 5y ago
        >The transaction fees and the constant $a$ would have to bee chosen such that you couldn't turn a profit by sending lots of money to yourself. But I think that would allow for a fair system with a good incentive structure. What if the goal isn't to profit from block rewards but to attack the network, though? What if you pass stuff around over and over between tons of addresses you own? (Any person can create an unlimited number of addresses, pretty much instantly.) Even if by the end the total transaction fees result in a heavy loss being incurred, the attacker would only do it if they think they can gain more from the network attack than they'd lose in fees. I think a secure blockchain system can never make any kind of assumption that 1 address = 1 person/entity or 1 transaction >= 2 people/entities. I think depending on addresses or transactions in any way is probably a non-starter. One of the key anti-Sybil features of Proof of Work, Proof of Space, and Proof of Stake is that it solely relies on a single scarce, unfakeable, totally fungible resource. The network cares about only one fungible variable: the total amount of computational power, or hard drive space, or funds in the network. That way, it makes no difference if the attacker has 1 address or 1 million addresses.
        mac01021 5y ago
        This is a very helpful comment, thank you! I agree that any blockchain has to be resistant to Sybil attacks. And that may be an insurmountable obstacle for my idea but, so far, I haven't let that stop me from thinking about it. There do seem to be some properties of PoW/PoS related to the level of iniquity in control of the blockchain and to their incentive structures, and I think it is worth casting a wide net in search of something better (even if it may not exist).
        meowface 5y ago
        I agree. I don't know nearly enough about it all to be able to think of any, as well. I just know open, decentralized, trustless, permissionless, anonymous consensus in global peer-to-peer networks is a very difficult problem that people have been wracking their brains thinking about for decades. BitTorrent, Bitcoin, and Ethereum made some of the biggest breakthroughs, there. It seems like everything might be a variation of one of two possible categories: economic game theory (Proof of Stake), or proof of committal of scarce, fungible physical resources. Everything else I can think of just seems like it'd be some form of centralization/oligarchy. But who knows? (Proof of Stake is sometimes accused of being oligarchical, too, but I think it's still kind of the lesser of all evils, probably.)
- inter_netuser 5y ago
  Because PoW miners have very little authority tied to their computing resources. Users have prevailed in Bitcoin forkwars over miners and many large exchanges and businesses. Miners are really more similar to employees of the network, that order transaction in exchange for fees. They are not masters of the protocol, and cannot dictate its rules. Proof of Work has a nuclear option (change of hashing algo) that would bankrupt the miners and render their farms useless. No such option exists in PoS, just political battles, as we've seen in practice. In PoS users lost in political battles of EOS (collapsed and rewrote the network rules) and Steem (taken over by bad faith staker). Literally all PoS projects failed in some way until today, due to some centralization pressures it produces.
  - woah 5y ago
    This is nonsensical. PoS users can change any parameters of the chain just as easily as PoW users can change the hashing algorithm. If all the PoS users switch to a version of the full node and or light client software that has the biggest holder’s balance reduced to zero, there is nothing anyone can do to stop them. It is the exact same thing as if PoW users switch to a full node software with a different hashing algo.
    - inter_netuser 5y ago
      I think the most fundamental difference that "balanced reduced to zero, is not even up for discussion in Bitcoin. Some Orwellian newspeak right there. "Reduced to zero". Just call it what it is: blacklists. Blacklists = permissioned access. Behave or we blacklist your coins. Welcome to Fiat 2.0
      - woah 5y ago
        Whatever. All Bitcoin users could also switch to a client that reduces someone's balance to zero.
  - ddrdrck_ 5y ago
    This is not true. Cosmos network (PoS network based on Tendermint consensus) is running successfully since 2019 for example.
kevincox 5y ago
The upside is that the wealthy have an incentive to keep the currency functional, otherwise their wealth is lost. The downside is that "functional" isn't exactly a high bar. For example reducing block rewards to encourage deflation would disproportionately help the wealthy so they may push it even if it isn't ideal for the average person.
- ashtonkem 5y ago
  The same argument has been made about monarchies; no rational king would ruin the kingdom for his son. A quick perusal of the history books makes a mockery of that theory. Turns out humans aren’t perfectly rational, and handing a huge amount of control to a tiny number of rich people is a fantastic way to discover that while any given rich person might be smart and what not, there’s a non trivial chance that their heir is an idiot and will ruin whatever they’re given. This is entertaining for personal fortunes, but not so funny when they control a currency.
- inter_netuser 5y ago
  If the wealthy can rig the game in the favour and fleece the rest - they'll do it. We've seen this throughout history. That's what PoS will do to small holders. They will be nothing but tiny shareholders with no anti-dilutive protections and zero legal recourse. I'd much rather deal with a centralized entity where at least I have a some body of law I can rely on.
- inter_netuser 5y ago
  The fact the wealthy can change anything in a system - is already a red flag. A system like that is definitely not decentralized.

I'm not trying to be obtuse, but why is authority tied to amount of coin owned any more plutocratic than authority tied to amount of computing resources used? Both cost money, and both scale power with amount of money sunk into it.

stirfish 5y ago
I don't think it is any more plutocratic. It's about the same.
- meowface 5y ago
  What other options are possible for blockchain networks? All I've seen so far are plutocracy (PoW/PoS blockchains) and oligarchy (centralized blockchains).
  - inter_netuser 5y ago
    PoW is not a plutocracy because miners cannot dictate the protocol rules. Not even a 51% miner could do that, a common misconception. They at most can refuse to process transactions. Users have prevailed agaist miners and large business in Bitcon forkwors, which failed to force their agenda on the users. This is at least some empirical proof in support that Bitcoin is not a plutocracy. Miners have large farms that can be bankrupted by users simply deciding to change the hashing algo. No such option in PoS. In PoS, largest wallets dictate changes. Liquidity begets more liquidity, aka the rich get richer, and such effect has a centralizing effect on PoS. All PoS project to date have failed.
  - mac01021 5y ago
    I don't have a great grasp yet of how PoS and other non-PoW consensus protocols work. But if I ever grok the building blocks fully enough, I'd like to see if I can devise a system based on "proof of receipt" in which the act of receiving X coins grants you the ability to "settle" a set of blocks totaling a*X worth of transactions (for some constant a). Like in other blockchains, the node selected to settle a block of transactions gets to keep some or all of the transaction fees for that block. But instead of continually getting selected by virtue of continuing to hold a large amount of coin, you could only continue to be selected by continuing to receive coin (presumably in return for goods and services). The transaction fees and the constant $a$ would have to bee chosen such that you couldn't turn a profit by sending lots of money to yourself. But I think that would allow for a fair system with a good incentive structure.
    - meowface 5y ago
      >The transaction fees and the constant $a$ would have to bee chosen such that you couldn't turn a profit by sending lots of money to yourself. But I think that would allow for a fair system with a good incentive structure. What if the goal isn't to profit from block rewards but to attack the network, though? What if you pass stuff around over and over between tons of addresses you own? (Any person can create an unlimited number of addresses, pretty much instantly.) Even if by the end the total transaction fees result in a heavy loss being incurred, the attacker would only do it if they think they can gain more from the network attack than they'd lose in fees. I think a secure blockchain system can never make any kind of assumption that 1 address = 1 person/entity or 1 transaction >= 2 people/entities. I think depending on addresses or transactions in any way is probably a non-starter. One of the key anti-Sybil features of Proof of Work, Proof of Space, and Proof of Stake is that it solely relies on a single scarce, unfakeable, totally fungible resource. The network cares about only one fungible variable: the total amount of computational power, or hard drive space, or funds in the network. That way, it makes no difference if the attacker has 1 address or 1 million addresses.
      - mac01021 5y ago
        This is a very helpful comment, thank you! I agree that any blockchain has to be resistant to Sybil attacks. And that may be an insurmountable obstacle for my idea but, so far, I haven't let that stop me from thinking about it. There do seem to be some properties of PoW/PoS related to the level of iniquity in control of the blockchain and to their incentive structures, and I think it is worth casting a wide net in search of something better (even if it may not exist).
        meowface 5y ago
        I agree. I don't know nearly enough about it all to be able to think of any, as well. I just know open, decentralized, trustless, permissionless, anonymous consensus in global peer-to-peer networks is a very difficult problem that people have been wracking their brains thinking about for decades. BitTorrent, Bitcoin, and Ethereum made some of the biggest breakthroughs, there. It seems like everything might be a variation of one of two possible categories: economic game theory (Proof of Stake), or proof of committal of scarce, fungible physical resources. Everything else I can think of just seems like it'd be some form of centralization/oligarchy. But who knows? (Proof of Stake is sometimes accused of being oligarchical, too, but I think it's still kind of the lesser of all evils, probably.)
inter_netuser 5y ago
Because PoW miners have very little authority tied to their computing resources. Users have prevailed in Bitcoin forkwars over miners and many large exchanges and businesses. Miners are really more similar to employees of the network, that order transaction in exchange for fees. They are not masters of the protocol, and cannot dictate its rules. Proof of Work has a nuclear option (change of hashing algo) that would bankrupt the miners and render their farms useless. No such option exists in PoS, just political battles, as we've seen in practice. In PoS users lost in political battles of EOS (collapsed and rewrote the network rules) and Steem (taken over by bad faith staker). Literally all PoS projects failed in some way until today, due to some centralization pressures it produces.
- woah 5y ago
  This is nonsensical. PoS users can change any parameters of the chain just as easily as PoW users can change the hashing algorithm. If all the PoS users switch to a version of the full node and or light client software that has the biggest holder’s balance reduced to zero, there is nothing anyone can do to stop them. It is the exact same thing as if PoW users switch to a full node software with a different hashing algo.
  - inter_netuser 5y ago
    I think the most fundamental difference that "balanced reduced to zero, is not even up for discussion in Bitcoin. Some Orwellian newspeak right there. "Reduced to zero". Just call it what it is: blacklists. Blacklists = permissioned access. Behave or we blacklist your coins. Welcome to Fiat 2.0
    - woah 5y ago
      Whatever. All Bitcoin users could also switch to a client that reduces someone's balance to zero.
- ddrdrck_ 5y ago
  This is not true. Cosmos network (PoS network based on Tendermint consensus) is running successfully since 2019 for example.

kevincox 5y ago

The upside is that the wealthy have an incentive to keep the currency functional, otherwise their wealth is lost. The downside is that "functional" isn't exactly a high bar. For example reducing block rewards to encourage deflation would disproportionately help the wealthy so they may push it even if it isn't ideal for the average person.

ashtonkem 5y ago
The same argument has been made about monarchies; no rational king would ruin the kingdom for his son. A quick perusal of the history books makes a mockery of that theory. Turns out humans aren’t perfectly rational, and handing a huge amount of control to a tiny number of rich people is a fantastic way to discover that while any given rich person might be smart and what not, there’s a non trivial chance that their heir is an idiot and will ruin whatever they’re given. This is entertaining for personal fortunes, but not so funny when they control a currency.
inter_netuser 5y ago
If the wealthy can rig the game in the favour and fleece the rest - they'll do it. We've seen this throughout history. That's what PoS will do to small holders. They will be nothing but tiny shareholders with no anti-dilutive protections and zero legal recourse. I'd much rather deal with a centralized entity where at least I have a some body of law I can rely on.
inter_netuser 5y ago
The fact the wealthy can change anything in a system - is already a red flag. A system like that is definitely not decentralized.