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> Most PoS networks aim to reach a "zero issuance" state where the network can sustain itself on TX fees alone. Whether ICO investors are stakemining coins iss

> Most PoS networks aim to reach a "zero issuance" state where the network can sustain itself on TX fees alone. Whether ICO investors are stakemining coins issued through inflation or transaction fees doesn’t matter — they’re still mining orders of magnitude more coins, at the end of the day. Their artificially low cost basis translates into them reaping outsized profits which dwarf that of later investors. (And frankly, it’s absurd the PoS astroturfing has gotten so out of hand that this needs to be pointed out at all.)

wmf 5y ago
It seems like that argument could equally apply to PoW or startups.
- atweiden 5y ago
  > It seems like that argument could equally apply to PoW or startups. It isn’t clear to me what you meant to say here. Early investors tend to be by far the biggest winners in general, crypto or not. However, we were discussing mining revenue, not profits in general. Importantly, early PoW miners had to source new ASIC mining rigs from China year after year, pay to install those ASICs in datacenters, and pay for the electricity to power them. For the better part of a decade. Only then would they have continued earning bitcoin mining revenue at all. Conversely, PoS staking yield requires little more than showing up with cash on day one. From then on out, PoS stakers earn mining revenue in proportion to their holdings. It costs them almost nothing to do this in perpetuity. In addition, PoS is sadly linked with ICOs, pre-ICOs and pre-mines. These financial shenanigans allow early investors to stake disproportionately more coins than later investors. IMO it’s highly misleading to present this situation as being somehow “more fair” than PoW mining.
  - 22c 5y ago
    >However, we were discussing mining revenue, not profits in general. If you are talking about mining revenue then you are completely wrong about what you have been saying so far, because the rate at which you receive mining rewards is usually around 5-10% pa. What you're trying to do is have your cake and eat it too. You admit that you are not talking about early adopter profits in general, but you complained above about cost basis of early adopters being low (that's how early adoption typically works). This is the same as complaining about someone investing in 10 year government bonds and then the underlying currency increasing in buying power. You could go buy Argentinian or Venezualan bonds right now and hope the peso or bolívar goes up in value. It's no different, all you need is seed money to get started.
    - atweiden 5y ago
      In spite of what PoS investors commonly claim, stakemining $COIN isn’t “fair” merely because Joe Bob can earn the same X% per annum that $BIG_VC can earn, where $BIG_VC was able to invest at pennies on the dollar in an ICO, pre-ICO or pre-mine. PoW mining is fundamentally more fair than PoS mining because $BIG_VC has to spend money to mine at all. To mine a PoW coin, $BIG_VC needs to pay for electricity, for ASICs and for datacenter running costs. Conversely, in PoS, there is no true “mining” — investors essentially park their cash and start earning a yield on it cost-free. Ergo it adversely impacts fairness of mining when a PoS coin is 50% premined by investors at pennies on the dollar. It’s an incredibly dubious narrative that the situation with PoS mining here is as fair as Bitcoin mining, let alone more fair than Bitcoin mining.
      - shawnz 5y ago
        In PoW coins you permanently lose the "stake". So that just means that to achieve the same level of security in a PoS coin, you have to stake a lot more (since you are only losing the time value of the stake).
        atweiden 5y ago
        > In PoW coins you permanently lose the "stake". So that just means that to achieve the same level of security in a PoS coin, you have to stake a lot more (since you are only losing the time value of the stake). PoS network security reduces down to top-down human intervention: because PoS networks are unmined, they lack all hashing power which could otherwise be used to build a quantitative fork ranking protocol. When forks occur in PoS, the network stewards have to “pick” a winning forked chain, and enforce that decision on the entire network. Because there’s by definition no hashing power involved in reaching that decision, it’s a bit of a wonder why PoS networks rely on blockchains at all. PoS security doesn’t really depend on anything other than the level of trust you have in the centralized authorities who control the PoS network. In the best of cases, it’s akin to trusting a Debian-like organization to annoint a specific branch of a Git repository as containing the true history of changes during any project-level dispute.
22c 5y ago
There's typically a fixed number of rewards per block, or the emission rates are on a schedule based on block height. Unless your argument is simply "stonks go up", in which case, sure, I agree. Is that a real problem? If you bought $1000 of AMZN shares 20 years ago you'd have orders of magnitude more voting power than someone who buys $1000 of AMZN shares today.
- atweiden 5y ago
  > If you bought $1000 of AMZN shares 20 years ago you'd have orders of magnitude more voting power than someone who buys $1000 of AMZN shares today. Equities typically aren’t masquerading as global currencies. Fairness does matter, here. It’s absolutely material that the pseudonym “Satoshi Nakamoto” had no reasonable expectation of profit at the time of launching Bitcoin c. 2009, for instance. It’s also material that Bitcoin miners couldn’t continue mining bitcoin absent continuously ordering new ASIC miners from Asia, whereas PoS miners can plop down cash on day one, and mine the same proportion of coins forever at little to no additional cost. AMZN investors aren’t typically peddling narratives involving fairness the way PoS investors are. These people are claiming PoS is “more fair” than Bitcoin. It’s profoundly incorrect, but also rather unsurprising.
  - 22c 5y ago
    I don't think anyone here is saying that PoS is somehow solving world poverty. The people who claim PoS is better than PoW typically do so because it is more power efficient and still capable of running an effective monetary network (at least what we've seen so far). I don't know anyone who says PoS is "more fair" although I would argue that delegated staking is certainly more geographically friendly than PoW (and to an extent, PoS) which will inevitably end up geographically focused in areas with low cost of operation (cold areas with the cheapest power and rent). PoS could be done on a Raspberry Pi plugged into your modem.
    - atweiden 5y ago
      > I don't know anyone who says PoS is "more fair" And I don’t know anyone who uses Bitcoin for illicit purposes. Imagine that.

wmf 5y ago

It seems like that argument could equally apply to PoW or startups.

atweiden 5y ago
> It seems like that argument could equally apply to PoW or startups. It isn’t clear to me what you meant to say here. Early investors tend to be by far the biggest winners in general, crypto or not. However, we were discussing mining revenue, not profits in general. Importantly, early PoW miners had to source new ASIC mining rigs from China year after year, pay to install those ASICs in datacenters, and pay for the electricity to power them. For the better part of a decade. Only then would they have continued earning bitcoin mining revenue at all. Conversely, PoS staking yield requires little more than showing up with cash on day one. From then on out, PoS stakers earn mining revenue in proportion to their holdings. It costs them almost nothing to do this in perpetuity. In addition, PoS is sadly linked with ICOs, pre-ICOs and pre-mines. These financial shenanigans allow early investors to stake disproportionately more coins than later investors. IMO it’s highly misleading to present this situation as being somehow “more fair” than PoW mining.
- 22c 5y ago
  >However, we were discussing mining revenue, not profits in general. If you are talking about mining revenue then you are completely wrong about what you have been saying so far, because the rate at which you receive mining rewards is usually around 5-10% pa. What you're trying to do is have your cake and eat it too. You admit that you are not talking about early adopter profits in general, but you complained above about cost basis of early adopters being low (that's how early adoption typically works). This is the same as complaining about someone investing in 10 year government bonds and then the underlying currency increasing in buying power. You could go buy Argentinian or Venezualan bonds right now and hope the peso or bolívar goes up in value. It's no different, all you need is seed money to get started.
  - atweiden 5y ago
    In spite of what PoS investors commonly claim, stakemining $COIN isn’t “fair” merely because Joe Bob can earn the same X% per annum that $BIG_VC can earn, where $BIG_VC was able to invest at pennies on the dollar in an ICO, pre-ICO or pre-mine. PoW mining is fundamentally more fair than PoS mining because $BIG_VC has to spend money to mine at all. To mine a PoW coin, $BIG_VC needs to pay for electricity, for ASICs and for datacenter running costs. Conversely, in PoS, there is no true “mining” — investors essentially park their cash and start earning a yield on it cost-free. Ergo it adversely impacts fairness of mining when a PoS coin is 50% premined by investors at pennies on the dollar. It’s an incredibly dubious narrative that the situation with PoS mining here is as fair as Bitcoin mining, let alone more fair than Bitcoin mining.
    - shawnz 5y ago
      In PoW coins you permanently lose the "stake". So that just means that to achieve the same level of security in a PoS coin, you have to stake a lot more (since you are only losing the time value of the stake).
      - atweiden 5y ago
        > In PoW coins you permanently lose the "stake". So that just means that to achieve the same level of security in a PoS coin, you have to stake a lot more (since you are only losing the time value of the stake). PoS network security reduces down to top-down human intervention: because PoS networks are unmined, they lack all hashing power which could otherwise be used to build a quantitative fork ranking protocol. When forks occur in PoS, the network stewards have to “pick” a winning forked chain, and enforce that decision on the entire network. Because there’s by definition no hashing power involved in reaching that decision, it’s a bit of a wonder why PoS networks rely on blockchains at all. PoS security doesn’t really depend on anything other than the level of trust you have in the centralized authorities who control the PoS network. In the best of cases, it’s akin to trusting a Debian-like organization to annoint a specific branch of a Git repository as containing the true history of changes during any project-level dispute.

22c 5y ago

There's typically a fixed number of rewards per block, or the emission rates are on a schedule based on block height. Unless your argument is simply "stonks go up", in which case, sure, I agree. Is that a real problem? If you bought $1000 of AMZN shares 20 years ago you'd have orders of magnitude more voting power than someone who buys $1000 of AMZN shares today.

atweiden 5y ago
> If you bought $1000 of AMZN shares 20 years ago you'd have orders of magnitude more voting power than someone who buys $1000 of AMZN shares today. Equities typically aren’t masquerading as global currencies. Fairness does matter, here. It’s absolutely material that the pseudonym “Satoshi Nakamoto” had no reasonable expectation of profit at the time of launching Bitcoin c. 2009, for instance. It’s also material that Bitcoin miners couldn’t continue mining bitcoin absent continuously ordering new ASIC miners from Asia, whereas PoS miners can plop down cash on day one, and mine the same proportion of coins forever at little to no additional cost. AMZN investors aren’t typically peddling narratives involving fairness the way PoS investors are. These people are claiming PoS is “more fair” than Bitcoin. It’s profoundly incorrect, but also rather unsurprising.
- 22c 5y ago
  I don't think anyone here is saying that PoS is somehow solving world poverty. The people who claim PoS is better than PoW typically do so because it is more power efficient and still capable of running an effective monetary network (at least what we've seen so far). I don't know anyone who says PoS is "more fair" although I would argue that delegated staking is certainly more geographically friendly than PoW (and to an extent, PoS) which will inevitably end up geographically focused in areas with low cost of operation (cold areas with the cheapest power and rent). PoS could be done on a Raspberry Pi plugged into your modem.
  - atweiden 5y ago
    > I don't know anyone who says PoS is "more fair" And I don’t know anyone who uses Bitcoin for illicit purposes. Imagine that.