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POW just gives the power to whoever can purchase the most computing power. It also gives control of the network to those directly benefiting from high fees. At
by x4e 5y ago
POW just gives the power to whoever can purchase the most computing power. It also gives control of the network to those directly benefiting from high fees.
At least POS gives the power to those that actually have an interest and stake in the currency itself.
- leishman 5y agoPoS will be controlled by US-based custodians, which certainly have a tremendous incentive to siphon as much value from the currency as possible. PoW has a much more diversified set of actors with competing interests, which makes it much more difficult to change the rules. This is a feature not a bug.
- incrudible 5y ago> PoS will be controlled by US-based custodians... You might as well claim that the Chinese Communist Party controls Bitcoin. Not entirely wrong, but misleading.
- leishman 5y agoNo it's very different. Bitcoin consensus is achieved through a combination of mining actors and economic actors. PoS collapses this into a single group: custodians.
- incrudible 5y agoBitcoin consensus is achieved through miner majority, end of story. Any other narrative is pure make-belief.
- grubles 5y agoNodes enforce the ruleset that miners must abide by, and can invalidate new blocks that miners generate. You can see examples of this in history e.g. bitcoin.com mining a block with a greater block size than consensus allowed, which caused the block to be invalidated and the cost of energy wasted.
- incrudible 5y agoWhat are nodes going to do if nobody wants to mine their preferred blocks? Somebody has to mine them, and they'll need a lot of hashrate to do so.
- yaa_minu 5y agoYes, in pow systems, miners can only ddos the network and they can do nothing more.
- incrudible 5y agoI'm not just talking about denial of service or 51% attacks, I'm talking about refusal of service. You can't just push some change that 99% of miners will refuse to mine blocks for. The remaining 1% would not be able to mine blocks for a long time with their puny hashrate. You'd have to reset difficulty and the system would be left in a highly vulnerable state. It would be a huge disruption. For that reason, nodes wouldn't attempt to enforce a change without significant miner support. You can have reasonably clean fork only if enough miners agree on something, but that implies that the interest of miners is given a lot of consideration.
- yaa_minu 5y agoI think the refusal of service is less problematic than the attack where they keep mining empty blocks without including any transactions. The refusal of service will only extend the block time which will be resolved in the next difficulty re-adjustment. It also requires significant percentage of the miners to agree to co-operate. With the empty blocks attack, they prevent difficulty re-adjustment and also get rewarded with new btc unlike the refusal of service where they'll just be wasting their electricity without any rewards and the small miners will be able to produce blocks albeit in a much longer time than ~10 minutes.
- incrudible 5y ago> The refusal of service will only extend the block time which will be resolved in the next difficulty re-adjustment. It also requires significant percentage of the miners to agree to co-operate. That's the premise: If you want to do something that strongly goes against the interest of all miners, that cooperation will form naturally. If 99% of miners agree on something, the block time would be several hours. Difficulty adjustment would have to be patched in. In the meantime, the miners on the "rogue chain" are mining blocks and clearing transactions. Who says that this chain is not Bitcoin? Why should all the stakeholders consider a broken chain with 1% of the hash power as the "one true Bitcoin", as opposed to a failed fork?
- yourabstraction 5y agoYeah, I'm a big ETH holder, but this is honestly what worries me about the POS merge. I think the fact that Bitcoin miners have to sell to fund their operations is a nice feature and keeps them in a separate class from the custodians. Economic incentives that merge validators with custodians could create a feedback loop that concentrates too much power in the wrong places. That being said, ETH has a thriving DeFi ecosystem and a ton of smart people working on it, so I'm not betting against it.
- themagician 5y agoThose who got that stake by purchasing massive compute power. PoS just solidifies current stakeholders so that they no longer have to worry about competition from new players.
- conradev 5y agoIs that actually the case? Couldn't a new player with the money to spend become a stakeholder overnight by purchasing large amounts of ETH on the open market and staking it? Versus taking that money and taking months to invest it into mining. Purchasing compute power is harder than purchasing ETH no matter how you slice it
- themagician 5y agoIn theory. Which is what the current stakeholders want. That was the value offer to do this in the first place. Either way, you end up with a currency that is far more centralized than most stable paper currencies. The number of large stakeholders in Etherum is probably measured in the thousands. PoS will just further consolidate the stakeholders over time. Ethereum isn't even reasonably transactable anymore. A single transaction costs like $40. As an actual currency, it died the same fate that Bitcoin did. Too few people hold too many coins, and then they make rules that only benefit increasing the price.