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PoW was of course a naive system but this this PoS should really be called the "Oligarchy" because it takes us back to the past and very visibly separates the p

PoW was of course a naive system but this this PoS should really be called the "Oligarchy" because it takes us back to the past and very visibly separates the plebs from the aristocracy. PoW had an implicit requirement for a global supply chain of hardware and energy which (kind of) made political and geopolitical games more difficult. With PoS, doing politics no longer requires work, which could lead to geopolicical wars. For example it might be possible to achieve wide enough consensus among stakers in Western countries to punish China (for some reason), e.g. willingly losing part of their stakes to empty major Chinese wallets. The fact that this doesn't really require physical effort but only persuasion is problematic. ETH will be a real test about whether PoS works, as the other PoS cryptos are much smaller and less intertwined in other crypto projects. Historically, oligarchies led to wars

seph-reed 5y ago
I'm on the PoW side. But you should note that PoW is also oligarchic in the sense that individuals have no ability to compete in terms of mining. The rich get richer is still a thing here. That being said, PoS is very much a human centric valuation (rich peoples opinions being the value), so yes: politics and then war seem likely. Pretty much every fiat currency has the same issues as PoS, where eventually war becomes the cheapest way to retain value.
- jude- 5y ago
  In PoW, the "rich" have to keep selling their coins to buy more dedicated mining equipment in order to stay competitive. And because PoW hasn't reached "optimum efficiency," there's still profits to be had by building better miners and cheaper power sources. Innovations here have positive downstream effects, since innovations in cheap renewable power and efficient chip fabs and designs have many applications beyond mining. PoS, on the other hand, requires minimal extra work from the already-rich. They just sit on their butts getting richer.
  - nscalf 5y ago
    It still doesn't change the underlying issue you discussed. Just because there is some friction removed in PoS doesn't mean that PoW isn't weighted to favor people with large pools of capital to invest.
    - jude- 5y ago
      That "friction" is a feature, not a bug. The "friction" generates second-order benefits for society.
      - SwagtimusPrime 5y ago
        benefits like killing the environment.
  - Taek 5y ago
    It's a well established result in PoW that a small constant improvement in efficiency (say, one mining farm is 5% more efficient than others) turns into an exponential advantage in hashrate over time if the profits are continually re-invested into building more hardware.
    - jude- 5y ago
      Yes, exactly. It's not a case of "rich get richer," so much as it's a case of "capital is continuously and irreversibly re-invested." In equilibrium, mining breaks even.
      - SwagtimusPrime 5y ago
        mining is actually worse because of economies of scale. rich miners don't need pools so they don't pay fees, they get bulk deals and earlier access to the newest ASICs, they can pay personnel to optimize their operations, etc. so over time, the rich miners get richer at a faster rate than poor miners. whereas under PoS, everyone gets the same % return (unless you stake with a pool, but even then you don't have these economies of scale like with mining.)
everfree 5y ago
> it might be possible to achieve wide enough consensus among stakers in Western countries to punish China (for some reason), e.g. willingly losing part of their stakes to empty major Chinese wallets. According to Ethereum's PoS implementation, this would require more than 33% of all staked Ethereum coordinating with modified clients in order to pull off. Then, another percentage of the stake adding up to 66% would have to be complicit in the attack, rather than actively defending against it by refusing to finalize blocks. Compare this to PoW, where only 51% of hashrate needs to be participating/complicit to censor certain transactions, the other 49% have no way of fighting back, and the only tool the community has to fork away is to change the PoW algorithm. Because of this, I actually believe PoS is more resistant than PoW to these kinds of attacks.
- fredfoobar 5y ago
  > Compare this to PoW, where only 51% of hashrate needs to be participating/complicit to censor certain transactions, the other 49% have no way of fighting back, and the only tool the community has to fork away is to change the PoW algorithm. This is just such a small part of the whole equation. 1. They can't continuously attack with this, as you need to expend energy as long as you want to continue with the attack. 2. Even if you have majority hash-rate, you can't change the rules of the system (this has already happened)
  - everfree 5y ago
    1. Under PoW, a 51% attacker can continuously attack profitably. All the energy they expend gets returned as mining rewards just like normal, and they can potentially even (up to) double their rewards if they censor the other 49%. The only way to stop this aside from changing the PoW algorithm is to physically locate and seize the mining rigs. 2. Majority stakers can't change the rules of the system either.
    - ByThyGrace 5y ago
      > All the energy they expend gets returned as mining rewards just like normal Is that because the mined blocks themselves are still valid (i.e. the hashes check out), regardless of the presence of an attacker? But then how does it help the attacker in an economical sense? Doesn't the rest of the network know that the new 51% blocks are tainted, so to speak?
Vadoff 5y ago
What if a government required Ethereum traders to pay taxes in Ethereum, then kept and staked it, thus increasing their Ethereum even more. Wouldn't that government eventually gain complete control of governance in Ethereum?
- quickthrower2 5y ago
  Then they'd quickly have a hard time collecting taxes in the future, as they would run the economy into the ground. Also the government doesn't want to gain control of Ethereum. If the government wants to use a crypto it will roll it's own and make it law, thereby having complete control of it from the get go, with no pesky premine for the foreign developers.
tornato7 5y ago
On the flip side, nearly 100% of PoW mining hardware is manufactured in China. They could easily play geopolitical games with the west in that regard. There is also a very delicate game to play if you're trying to hack a crypto for your own benefit. If a crypto network gets hacked it is likely to lose a ton of value and reputation. That's why ETH fell by 60% after the Dao hack. So you're really shooting yourself in the foot by being a malicious actor.

seph-reed 5y ago

I'm on the PoW side. But you should note that PoW is also oligarchic in the sense that individuals have no ability to compete in terms of mining. The rich get richer is still a thing here. That being said, PoS is very much a human centric valuation (rich peoples opinions being the value), so yes: politics and then war seem likely. Pretty much every fiat currency has the same issues as PoS, where eventually war becomes the cheapest way to retain value.

jude- 5y ago
In PoW, the "rich" have to keep selling their coins to buy more dedicated mining equipment in order to stay competitive. And because PoW hasn't reached "optimum efficiency," there's still profits to be had by building better miners and cheaper power sources. Innovations here have positive downstream effects, since innovations in cheap renewable power and efficient chip fabs and designs have many applications beyond mining. PoS, on the other hand, requires minimal extra work from the already-rich. They just sit on their butts getting richer.
- nscalf 5y ago
  It still doesn't change the underlying issue you discussed. Just because there is some friction removed in PoS doesn't mean that PoW isn't weighted to favor people with large pools of capital to invest.
  - jude- 5y ago
    That "friction" is a feature, not a bug. The "friction" generates second-order benefits for society.
    - SwagtimusPrime 5y ago
      benefits like killing the environment.
- Taek 5y ago
  It's a well established result in PoW that a small constant improvement in efficiency (say, one mining farm is 5% more efficient than others) turns into an exponential advantage in hashrate over time if the profits are continually re-invested into building more hardware.
  - jude- 5y ago
    Yes, exactly. It's not a case of "rich get richer," so much as it's a case of "capital is continuously and irreversibly re-invested." In equilibrium, mining breaks even.
    - SwagtimusPrime 5y ago
      mining is actually worse because of economies of scale. rich miners don't need pools so they don't pay fees, they get bulk deals and earlier access to the newest ASICs, they can pay personnel to optimize their operations, etc. so over time, the rich miners get richer at a faster rate than poor miners. whereas under PoS, everyone gets the same % return (unless you stake with a pool, but even then you don't have these economies of scale like with mining.)

everfree 5y ago

> it might be possible to achieve wide enough consensus among stakers in Western countries to punish China (for some reason), e.g. willingly losing part of their stakes to empty major Chinese wallets. According to Ethereum's PoS implementation, this would require more than 33% of all staked Ethereum coordinating with modified clients in order to pull off. Then, another percentage of the stake adding up to 66% would have to be complicit in the attack, rather than actively defending against it by refusing to finalize blocks. Compare this to PoW, where only 51% of hashrate needs to be participating/complicit to censor certain transactions, the other 49% have no way of fighting back, and the only tool the community has to fork away is to change the PoW algorithm. Because of this, I actually believe PoS is more resistant than PoW to these kinds of attacks.

fredfoobar 5y ago
> Compare this to PoW, where only 51% of hashrate needs to be participating/complicit to censor certain transactions, the other 49% have no way of fighting back, and the only tool the community has to fork away is to change the PoW algorithm. This is just such a small part of the whole equation. 1. They can't continuously attack with this, as you need to expend energy as long as you want to continue with the attack. 2. Even if you have majority hash-rate, you can't change the rules of the system (this has already happened)
- everfree 5y ago
  1. Under PoW, a 51% attacker can continuously attack profitably. All the energy they expend gets returned as mining rewards just like normal, and they can potentially even (up to) double their rewards if they censor the other 49%. The only way to stop this aside from changing the PoW algorithm is to physically locate and seize the mining rigs. 2. Majority stakers can't change the rules of the system either.
  - ByThyGrace 5y ago
    > All the energy they expend gets returned as mining rewards just like normal Is that because the mined blocks themselves are still valid (i.e. the hashes check out), regardless of the presence of an attacker? But then how does it help the attacker in an economical sense? Doesn't the rest of the network know that the new 51% blocks are tainted, so to speak?

Vadoff 5y ago

What if a government required Ethereum traders to pay taxes in Ethereum, then kept and staked it, thus increasing their Ethereum even more. Wouldn't that government eventually gain complete control of governance in Ethereum?

quickthrower2 5y ago
Then they'd quickly have a hard time collecting taxes in the future, as they would run the economy into the ground. Also the government doesn't want to gain control of Ethereum. If the government wants to use a crypto it will roll it's own and make it law, thereby having complete control of it from the get go, with no pesky premine for the foreign developers.

tornato7 5y ago

On the flip side, nearly 100% of PoW mining hardware is manufactured in China. They could easily play geopolitical games with the west in that regard. There is also a very delicate game to play if you're trying to hack a crypto for your own benefit. If a crypto network gets hacked it is likely to lose a ton of value and reputation. That's why ETH fell by 60% after the Dao hack. So you're really shooting yourself in the foot by being a malicious actor.