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> Sure, but how is that any different than proof-of-work early adopters becoming rich and being able to afford more mining hardware and electricity? You have t
by atweiden 5y ago
> Sure, but how is that any different than proof-of-work early adopters becoming rich and being able to afford more mining hardware and electricity?
You have to spend money on mining hardware and electricity to get those yields. To do that on a large scale requires a datacenter and enormously expensive long-term power contracts with utility companies.
But with PoS mining, little to no effort is required. Click a button, and start earning yield in perpetuity.
Put yourself in the shoes of an early adopter of any PoW coin. At what point do you decide to spend millions of dollars ordering mining rigs from Asia, and setting up a datacenter with power contracts? Whereas with PoS this is simply a matter of clicking a button, which costs almost nothing and can be done more or less instantly. It’s a night and day difference.
- shawnz 5y agoSo is your argument that the profit from mining PoW currencies is actually sub-linear with the initial investment because it's more expensive per unit to get larger quantities of hardware and electricity, and so that counteracts the gain that early adopters have had? That doesn't seem right to me, economics of scale suggest it should be cheaper per unit to get larger quantities (even if there are additional difficulties doing so at a big scale).
- atweiden 5y agoThe difference with PoW mining is it involves more than just clicking a button. Conversely, with PoS, people — and particularly insiders who are in on the ICO, pre-ICO or premine — can click a button and earn X% per annum in perpetuity. Which they do. Bitcoin has many problems, it just doesn’t have this particular one.