4 ms·
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 expo
by 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 agoYes, 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 agomining 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.)