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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, an

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?

nightpool 5y ago
Ethereum has already proven that there's no way to prevent social forks, correct? The DAO incident comes to mind as a very controversial instance, but there are others. Ultimately, it's up to the individual nodes to decide what code they want to run and what rules they want to use to decide what the chain is. I'm not sure I understand how PoS makes this worse (although maybe there's something I'm missing)
- f38zf5vdt 5y ago
  Right, but then the model is not trustless but is instead a complex implementation of the current system of international banking. Maybe I don't understand the point of cryptocurrencies. Most applications of cryptography are trustless.
  - nightpool 5y ago
    "Trustless" is relative. In this case, the protocols are still trustless—the trust lies one meta level up, where you decide which protocols to use. In this situation, there are network effects as well—you can come up with your own perfect protocol in a vacuum, but if nobody uses it, who cares? In this case, you can think about it as one person saying "I think it's a good idea if we do this" and a few hundred other people saying "I agree with you". Obviously, they're more likely to agree with the first person if they have some sort of institutional legitimacy. But is that "trust"? That's very different from the definition of "trust" that's generally used in protocol design.
- pamplemoose 5y ago
  I found the following article to be helpful in understanding some of these processes https://haseebq.com/ethereum-is-now-unforkable-thanks-to-defi/ https://haseebq.com/ethereum-is-now-unforkable-thanks-to-def...
  - nightpool 5y ago
    This article makes a good point about the fragility of DeFi, but it fails to demonstrate that the broader Ethereum community cares enough about DeFi to let it influence their decisions. It makes a general, hand-wavey gesture to other parts of ETH ("All websites, interfaces, block explorers, and wallets ultimately point to the majority chain. Game operators like CryptoKitties lock their D-ETH contracts so as not to confuse their users."), but it fails to justify this point—it already says "a civil war is brewing" and that individual developers (presumably including CryptoKitties) would have reason to support one or the other. So while this article is a (good?) argument for why all DeFi operators must follow USDC, it fails to make the case for why anyone else should care about the fate of centralized stablecoins. Maybe these reasons are obvious! But I don't know them.
ivanbakel 5y ago
What stops chain forks to begin with? This isn't a flaw that's limited to PoS.
- gruez 5y ago
  I think GP's point is that in the event of a fork, in a PoW fork miners have to choose to either mine for chain A or chain B, whereas with PoS stakers can choose to stake for both. This is bad, because either side can use their staking power to disrupt the other chain, by doing double spend attacks or refusing to confirm transactions. On top of that, staking is free to do, so you don't even have to expend resources to pull off such an attack, whereas with mining you have to spend real world resources to pull it off.
  - shawnz 5y ago
    This is the point of slashing, to prevent the same coins from being staked on multiple chains at the same time. To stake you need to issue proofs of the stake which can be used to slash you on other chains.
  - nightpool 5y ago
    Thank you, this is a good description of the issue! This does seem like a complicated problem to solve, but I'm not necessarily convinced that one set of incentives is always worse or better—aren't there some situations where you do want to import the existing set of "stakes" to gain adoption?
wbc 5y ago
Vitalik talked about splits like this, read https://vitalik.ca/general/2021/03/23/legitimacy.html https://vitalik.ca/general/2021/03/23/legitimacy.html
- f38zf5vdt 5y ago
  I don't think that helps my comprehension of this. Unless I am mistaken, it seems like a long winded essay on how cryptocurrencies are simply social constructs.
Tzs7GVei 5y ago
Why would you want to prevent social forks? Social forks are not only good, they are the killer feature of crypto. They are what makes crypto truly consensual and voluntaryistic (if that's a word). As for the problem of national laws, I hope that can be alleviated with better privacy, so people can safely run a node even in violation of laws.

nightpool 5y ago

Ethereum has already proven that there's no way to prevent social forks, correct? The DAO incident comes to mind as a very controversial instance, but there are others. Ultimately, it's up to the individual nodes to decide what code they want to run and what rules they want to use to decide what the chain is. I'm not sure I understand how PoS makes this worse (although maybe there's something I'm missing)

f38zf5vdt 5y ago
Right, but then the model is not trustless but is instead a complex implementation of the current system of international banking. Maybe I don't understand the point of cryptocurrencies. Most applications of cryptography are trustless.
- nightpool 5y ago
  "Trustless" is relative. In this case, the protocols are still trustless—the trust lies one meta level up, where you decide which protocols to use. In this situation, there are network effects as well—you can come up with your own perfect protocol in a vacuum, but if nobody uses it, who cares? In this case, you can think about it as one person saying "I think it's a good idea if we do this" and a few hundred other people saying "I agree with you". Obviously, they're more likely to agree with the first person if they have some sort of institutional legitimacy. But is that "trust"? That's very different from the definition of "trust" that's generally used in protocol design.
pamplemoose 5y ago
I found the following article to be helpful in understanding some of these processes https://haseebq.com/ethereum-is-now-unforkable-thanks-to-defi/ https://haseebq.com/ethereum-is-now-unforkable-thanks-to-def...
- nightpool 5y ago
  This article makes a good point about the fragility of DeFi, but it fails to demonstrate that the broader Ethereum community cares enough about DeFi to let it influence their decisions. It makes a general, hand-wavey gesture to other parts of ETH ("All websites, interfaces, block explorers, and wallets ultimately point to the majority chain. Game operators like CryptoKitties lock their D-ETH contracts so as not to confuse their users."), but it fails to justify this point—it already says "a civil war is brewing" and that individual developers (presumably including CryptoKitties) would have reason to support one or the other. So while this article is a (good?) argument for why all DeFi operators must follow USDC, it fails to make the case for why anyone else should care about the fate of centralized stablecoins. Maybe these reasons are obvious! But I don't know them.

ivanbakel 5y ago

What stops chain forks to begin with? This isn't a flaw that's limited to PoS.

gruez 5y ago
I think GP's point is that in the event of a fork, in a PoW fork miners have to choose to either mine for chain A or chain B, whereas with PoS stakers can choose to stake for both. This is bad, because either side can use their staking power to disrupt the other chain, by doing double spend attacks or refusing to confirm transactions. On top of that, staking is free to do, so you don't even have to expend resources to pull off such an attack, whereas with mining you have to spend real world resources to pull it off.
- shawnz 5y ago
  This is the point of slashing, to prevent the same coins from being staked on multiple chains at the same time. To stake you need to issue proofs of the stake which can be used to slash you on other chains.
- nightpool 5y ago
  Thank you, this is a good description of the issue! This does seem like a complicated problem to solve, but I'm not necessarily convinced that one set of incentives is always worse or better—aren't there some situations where you do want to import the existing set of "stakes" to gain adoption?

wbc 5y ago

Vitalik talked about splits like this, read https://vitalik.ca/general/2021/03/23/legitimacy.html https://vitalik.ca/general/2021/03/23/legitimacy.html

f38zf5vdt 5y ago
I don't think that helps my comprehension of this. Unless I am mistaken, it seems like a long winded essay on how cryptocurrencies are simply social constructs.

Tzs7GVei 5y ago

Why would you want to prevent social forks? Social forks are not only good, they are the killer feature of crypto. They are what makes crypto truly consensual and voluntaryistic (if that's a word). As for the problem of national laws, I hope that can be alleviated with better privacy, so people can safely run a node even in violation of laws.