8 ms·

Current system is no different, as the hash power is related to how many computers you can afford to buy. This doesn't fix the problem but it does fix the envi

Current system is no different, as the hash power is related to how many computers you can afford to buy. This doesn't fix the problem but it does fix the environmental impact.

gruez 5y ago
The difference is that with PoW you constantly have to do "stuff" (ie. buying equipment, running datacenters) or get left behind. PoS on the other hand you can just sit on your ass and wait for the $$$ to roll in.
- yokem55 5y ago
  Except, using the same kind of pooling that POW depends on, you can still get in at just about any price level. .01 Eth can be staked just as easily as 10,000 eth. And running a validator with 32 isn't nothing - you still have to keep a machine on and online 24/7 with an uncapped connection or pay someone to host that machine.
- nerdponx 5y ago
  Or you can pay someone a flat amount to do the "stuff" and experience your own unlimited percentage-based gains, like in pretty much any other market where "capital" is a thing.
- sergioisidoro 5y ago
  Good point. But I still don't understand how it changes the premise presented by the comment, of "The one who has the money controls the network".
  - pinkybanana 5y ago
    There are lots of participants in the global economy who has money. The idea is that you have enough different people with competing incentives. PoW provides incentive model which separates different actors (pools, exchanges etc) and also at the same time doesn't seem to lead to monopolies.
- meowkit 5y ago
  Can you explain what “sitting on your ass” means? I thought you had to maintain a validator?
  - sendbitcoins 5y ago
    Exchanges like CoinBase will stake for you. You as an individual don't have to do anything.
    - G3rn0ti 5y ago
      An earn interest, right? So I could lend Coinbase some of my ether for staking and they pay me interest in return. So PoS could give us an interesting investment possibility.
      - sendbitcoins 5y ago
        Well, its not called interest, its called 'staking rewards'. You can also earn interest lending out your ETH, but that's a different process and entails counterparty risk.
- tux3 5y ago
  Yes and no. Keeping up with the day to day details is something you delegate at some point. PoW is also "just" an investment, with extra steps to set things up.
- narush 5y ago
  This is not the case. In Ethereum's PoS model, you put value at risk when you sign up to be a validator. You have to lock funds up to play a part in consensus. This means that if you start acting maliciously, or even just not fulfilling your responsibilities (e.g. you let your computer go offline), then you are punished for it (depending on the severity of your offense, obviously). Aka, you can't just wait for the money to roll in. You have to run a node, you have to verify blocks, and you have to make sure you're acting in the best interest of the network + keeping things running smoothly.
  - secondcoming 5y ago
    Who gets these funds? This is beginning to sound suspicious.
    - thebean11 5y ago
      The other actors in the network running validators. Specifically you are punished for: - Being offline (the penalty is small, and roughly equal to the rewards earned by being online - Running the same validator twice (huge penalty, be careful!)
      - secondcoming 5y ago
        Are the funds paid in fiat or ETH?
        bidirectional 5y ago
        ETH of course, this is an automated part of how the system works, not some behind-the-scenes deal based on reputation or whatever.
  - f38zf5vdt 5y ago
    This is something I don't understand. You lock the funds on a chain and you lose them on the chain. But what happens if two groups decide to split the chain, and both chains lock the opposing chains funds? It seems like there's no way to prevent social forks in the longer term, just a lot of hand-waving about that if the current social contract stays in place, some minority malicious group will be punished for secession. It would seem that if some participants on the network can't abide by their national laws while running some contracts, the outcome would be inevitable. And then you would just get multiple chains running under multiple governments. This seems like a reinvention of the international banking system?
- Polygator 5y ago
  Yeah, but obviously the "stuff" has led to a Red Queen problem, with the outcome being incredible waste of electricity and computing resources (compared to PoS or having a less competitive eth mining industry)
- shawnz 5y ago
  In PoS, you are still permanently burning the time value of the money you have staked. That's unrecoverable just like the electricity spent in PoW is unrecoverable.
- serverholic 5y ago
  I find comments like yours hilarious. The idea that the ethereum foundation has spent years and years designing a PoS system, writing papers, doing tests, building proofs of correctness aaaaaand derp they just didn't think of people sitting on their asses.
  - arrow7000 5y ago
    Maybe answer the question instead of scoffing at how ridiculous it is?
    - serverholic 5y ago
      No, I refuse to put in effort to correct the level of confident ignorance the OP displayed.
  - AlexandrB 5y ago
    It's not that hilarious when you realize that this is the same kind of thinking some cryto-boosters apply to hundreds of years of financial regulation and history.
- everfree 5y ago
  This isn't really true. You also have to buy equipment and run specialized software to participate in PoS. It requires keeping a node connected to the internet with high uptime, and maintaining its software and hardware. Plus, due to slashing, you are uniquely responsible for mistakes your validator makes. So, staking comes with both responsibilities and consequences for breaching them, just like any legal contract. The fact that you can rent a turnkey cloud solution to do all this work for you and split the profits isn't really relevant to the argument IMO (I consider staking with Coinbase "renting cloud computing" in a specialized way).
pinkybanana 5y ago
No, it is very different because in practice the pools and exchanges are totally separate entities. With PoS the biggest holders will be exchanges and therefore exchanges will control the cryptocurrency. With PoS there will be clearly less decentralization compared to PoW.
- fastball 5y ago
  In order to be a validator in PoS (at least Ethereum's implementation) you need to lock up the funds, so not sure how an exchange would be particularly well-suited for that – they need to keep most of the coins on their books liquid so that the customers who actually own them can quickly trade them.
  - pinkybanana 5y ago
    You don't seem to understand how exchanges work. Locking the funds won't be problem to exchanges. Most of the funds just sit dormant in cold storage for long periods of times. For withdrawals you always use most recent deposits and you minimize the transfers between hot and cold wallet.
    - fastball 5y ago
      I don't know anyone who keeps large amounts of ETH sitting unused on an exchange.
      - rfd4sgmk8u 5y ago
        Just take a look at any of the account tables. Most of it is in exchange cold wallets. These exchanges will be staking against your interests. It has happened before, it will happen again. Just say no to PoS.
        fastball 5y ago
        But that's only because Ethereum is currently on PoW, so (naive) people don't care. But as soon the switch happens, people will want to be staking their ETH in pools that will earn them money.
ballofrubber 5y ago
PoW is a lot different, as burning real world resources (energy) brings sell-pressure to miners, whereas PoS only has cost of locking the funds. This means that regardless of the size of your "operation" cost scales very flat. PoS also does not come with the property of innovation and disruption. In a PoW (especially ASIC-based) system you will find new ways to outperform your peers and disrupt old players. PoW incentivices cheap energy in developing countries more than anything before. It is the fix for environmental problems.
- SR2Z 5y ago
  This is a spicy take, not least because the cheapest source of energy in the developing world (i.e. the one without environmental regulations) tends to be coal.
- TeMPOraL 5y ago
  > PoW incentivices cheap energy in developing countries more than anything before. It is the fix for environmental problems. That can only become true if and when governments decide to suddenly ban PoW, so that all that cheap energy services anything other than crypto. I don't think it works as an argument in favor of PoW, for the same reason "we're only spreading knowledge of chemistry and democratizing process engineering" doesn't work as an argument in favor of drug cartels. Also, 'SR2Z is right - "cheap energy in developing countries" == coal.
- swiley 5y ago
  PoS burns capital in the sense that it could be invested in something else (I was looking at staking coins but it doesn't come near the yield I get from my 401k for example, which is effectively providing unsecured debt to finance innovation.) IMO: it's much better than PoW as long as it doesn't end up too centralized. I'm not too sure how I feel about the minimum amount required to stake though, that seems a bit odd.
  - gverrilla 5y ago
    from what I heard the minimum ammount might change, and it was decided in a time ETH value was lower

Current system is no different, as the hash power is related to how many computers you can afford to buy. This doesn't fix the problem but it does fix the environmental impact.

gruez 5y ago

The difference is that with PoW you constantly have to do "stuff" (ie. buying equipment, running datacenters) or get left behind. PoS on the other hand you can just sit on your ass and wait for the $$$ to roll in.

yokem55 5y ago
Except, using the same kind of pooling that POW depends on, you can still get in at just about any price level. .01 Eth can be staked just as easily as 10,000 eth. And running a validator with 32 isn't nothing - you still have to keep a machine on and online 24/7 with an uncapped connection or pay someone to host that machine.
nerdponx 5y ago
Or you can pay someone a flat amount to do the "stuff" and experience your own unlimited percentage-based gains, like in pretty much any other market where "capital" is a thing.
sergioisidoro 5y ago
Good point. But I still don't understand how it changes the premise presented by the comment, of "The one who has the money controls the network".
- pinkybanana 5y ago
  There are lots of participants in the global economy who has money. The idea is that you have enough different people with competing incentives. PoW provides incentive model which separates different actors (pools, exchanges etc) and also at the same time doesn't seem to lead to monopolies.
meowkit 5y ago
Can you explain what “sitting on your ass” means? I thought you had to maintain a validator?
- sendbitcoins 5y ago
  Exchanges like CoinBase will stake for you. You as an individual don't have to do anything.
  - G3rn0ti 5y ago
    An earn interest, right? So I could lend Coinbase some of my ether for staking and they pay me interest in return. So PoS could give us an interesting investment possibility.
    - sendbitcoins 5y ago
      Well, its not called interest, its called 'staking rewards'. You can also earn interest lending out your ETH, but that's a different process and entails counterparty risk.
tux3 5y ago
Yes and no. Keeping up with the day to day details is something you delegate at some point. PoW is also "just" an investment, with extra steps to set things up.
narush 5y ago
This is not the case. In Ethereum's PoS model, you put value at risk when you sign up to be a validator. You have to lock funds up to play a part in consensus. This means that if you start acting maliciously, or even just not fulfilling your responsibilities (e.g. you let your computer go offline), then you are punished for it (depending on the severity of your offense, obviously). Aka, you can't just wait for the money to roll in. You have to run a node, you have to verify blocks, and you have to make sure you're acting in the best interest of the network + keeping things running smoothly.
- secondcoming 5y ago
  Who gets these funds? This is beginning to sound suspicious.
  - thebean11 5y ago
    The other actors in the network running validators. Specifically you are punished for: - Being offline (the penalty is small, and roughly equal to the rewards earned by being online - Running the same validator twice (huge penalty, be careful!)
    - secondcoming 5y ago
      Are the funds paid in fiat or ETH?
      - bidirectional 5y ago
        ETH of course, this is an automated part of how the system works, not some behind-the-scenes deal based on reputation or whatever.
- f38zf5vdt 5y ago
  This is something I don't understand. You lock the funds on a chain and you lose them on the chain. But what happens if two groups decide to split the chain, and both chains lock the opposing chains funds? It seems like there's no way to prevent social forks in the longer term, just a lot of hand-waving about that if the current social contract stays in place, some minority malicious group will be punished for secession. It would seem that if some participants on the network can't abide by their national laws while running some contracts, the outcome would be inevitable. And then you would just get multiple chains running under multiple governments. This seems like a reinvention of the international banking system?
Polygator 5y ago
Yeah, but obviously the "stuff" has led to a Red Queen problem, with the outcome being incredible waste of electricity and computing resources (compared to PoS or having a less competitive eth mining industry)
shawnz 5y ago
In PoS, you are still permanently burning the time value of the money you have staked. That's unrecoverable just like the electricity spent in PoW is unrecoverable.
serverholic 5y ago
I find comments like yours hilarious. The idea that the ethereum foundation has spent years and years designing a PoS system, writing papers, doing tests, building proofs of correctness aaaaaand derp they just didn't think of people sitting on their asses.
- arrow7000 5y ago
  Maybe answer the question instead of scoffing at how ridiculous it is?
  - serverholic 5y ago
    No, I refuse to put in effort to correct the level of confident ignorance the OP displayed.
- AlexandrB 5y ago
  It's not that hilarious when you realize that this is the same kind of thinking some cryto-boosters apply to hundreds of years of financial regulation and history.
everfree 5y ago
This isn't really true. You also have to buy equipment and run specialized software to participate in PoS. It requires keeping a node connected to the internet with high uptime, and maintaining its software and hardware. Plus, due to slashing, you are uniquely responsible for mistakes your validator makes. So, staking comes with both responsibilities and consequences for breaching them, just like any legal contract. The fact that you can rent a turnkey cloud solution to do all this work for you and split the profits isn't really relevant to the argument IMO (I consider staking with Coinbase "renting cloud computing" in a specialized way).

pinkybanana 5y ago

No, it is very different because in practice the pools and exchanges are totally separate entities. With PoS the biggest holders will be exchanges and therefore exchanges will control the cryptocurrency. With PoS there will be clearly less decentralization compared to PoW.

fastball 5y ago
In order to be a validator in PoS (at least Ethereum's implementation) you need to lock up the funds, so not sure how an exchange would be particularly well-suited for that – they need to keep most of the coins on their books liquid so that the customers who actually own them can quickly trade them.
- pinkybanana 5y ago
  You don't seem to understand how exchanges work. Locking the funds won't be problem to exchanges. Most of the funds just sit dormant in cold storage for long periods of times. For withdrawals you always use most recent deposits and you minimize the transfers between hot and cold wallet.
  - fastball 5y ago
    I don't know anyone who keeps large amounts of ETH sitting unused on an exchange.
    - rfd4sgmk8u 5y ago
      Just take a look at any of the account tables. Most of it is in exchange cold wallets. These exchanges will be staking against your interests. It has happened before, it will happen again. Just say no to PoS.
      - fastball 5y ago
        But that's only because Ethereum is currently on PoW, so (naive) people don't care. But as soon the switch happens, people will want to be staking their ETH in pools that will earn them money.

ballofrubber 5y ago

PoW is a lot different, as burning real world resources (energy) brings sell-pressure to miners, whereas PoS only has cost of locking the funds. This means that regardless of the size of your "operation" cost scales very flat. PoS also does not come with the property of innovation and disruption. In a PoW (especially ASIC-based) system you will find new ways to outperform your peers and disrupt old players. PoW incentivices cheap energy in developing countries more than anything before. It is the fix for environmental problems.

SR2Z 5y ago
This is a spicy take, not least because the cheapest source of energy in the developing world (i.e. the one without environmental regulations) tends to be coal.
TeMPOraL 5y ago
> PoW incentivices cheap energy in developing countries more than anything before. It is the fix for environmental problems. That can only become true if and when governments decide to suddenly ban PoW, so that all that cheap energy services anything other than crypto. I don't think it works as an argument in favor of PoW, for the same reason "we're only spreading knowledge of chemistry and democratizing process engineering" doesn't work as an argument in favor of drug cartels. Also, 'SR2Z is right - "cheap energy in developing countries" == coal.
swiley 5y ago
PoS burns capital in the sense that it could be invested in something else (I was looking at staking coins but it doesn't come near the yield I get from my 401k for example, which is effectively providing unsecured debt to finance innovation.) IMO: it's much better than PoW as long as it doesn't end up too centralized. I'm not too sure how I feel about the minimum amount required to stake though, that seems a bit odd.
- gverrilla 5y ago
  from what I heard the minimum ammount might change, and it was decided in a time ETH value was lower