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I think you're conflating _consensus_ and _governance_; the two are quite different. It's not PoW vs PoS that allows a chain to resist a coordinated attempt by

I think you're conflating _consensus_ and _governance_; the two are quite different. It's not PoW vs PoS that allows a chain to resist a coordinated attempt by elites to force a protocol change, it's users personally verifying the chain (and so automatically rejecting chains that violate the rules even if >51% of PoW/PoS nodes support those chains). So no, PoS is not "how our current financial system works". Our current financial system doesn't give people the ability to independently verify anything at all; it's even worse than the most centralized chains in that regard. I would actually say PoS is more resistant to cabals and regulatory systems than PoW; PoW mining requires huge and visible capital investments and electricity consumption and it's incredibly easy for governments to detect and shut down miners in their own countries (not as true for GPU mining, but GPU-friendliness is difficult to sustain long term), whereas you can be a PoS validator with the most basic computer hardware from anywhere.

eyezick 5y ago
I'd further add on to say PoS has the benefit of being able to eliminate bad actors unilaterally. You can't stop anyone from attacking a PoW chain over and over again. Attacking a PoS chain is much riskier as the attacker's stakes are held on chain and are at the mercy of the community who uses the network.
- jude- 5y ago
  Why does the attacker need to hold or buy any coins? All the attacker has to do to wreck havoc is prevent quorum from being reached. This can be done by knocking validators offline (which is a slashable penalty), or hacking validators and making them slash themselves, or hacking an exchange or two in order to amass control of 33% or more of the voting power.
  - pshc 5y ago
    Correct me if I'm wrong, but being offline is not a slashable penalty. You would slowly lose ETH and eventually be ejected, but not slashed like a malicious validator would be.
    - jude- 5y ago
      Maybe I'm applying the term "slashing" too broadly. I've historically used it to describe the act of having your tokens taken away for bad behavior (either all at once, or incrementally). Is there a more-specific term for describing the process by which an offline validator loses their ETH over time?
  - eyezick 5y ago
    The point is it mitigates the on-chain attack surface which is still prevalent on PoW. Off-chain attacks are still possible for all consensus mechanism.
    - jude- 5y ago
      What on-chain attack surface? The only way to permanently knock a PoW chain offline is to consistently out-mine everyone else. In PoS, once you lose BFT quorum (1/3 of all votes), it's game over.
      - vbuterin 5y ago
        > In PoS, once you lose BFT quorum (1/3 of all votes), it's game over. This is not how the Ethereum PoS chain's LMD GHOST fork choice works. If >1/3 drop offline, you stop finalizing, but the chain keeps growing.
        jude- 5y ago
        No distributed system is guaranteed to make forward progress if over 1/3 of its voting nodes is faulty, full stop. Once an adaptive adversary controls more than 1/3 of the voting power, they can forever delay the remaining 2/3 of the voting nodes from reaching consensus. Hell, they'd even be able to delay votes from other nodes to slash their stolen stash. From this, I can conclude at least one of the following: * LMD GHOST is incorrect * your understanding of it is incorrect * LMD GHOST is not a BFT consensus algorithm
        deleted 5y ago
        [deleted]
  - vbuterin 5y ago
    If hacking billions of dollars of cryptocurrency was actually easy, plenty of people who are not rich right now would be very very rich. Alternatively, if PoS chains are vulnerable because you can hack exchanges and use their coins to attack, then PoW chains are vulnerable because you can hack exchanges, sell the proceeds to buy ASICs (or just buy the ASIC company), and use those ASICs to attack the PoW network. Hacking billions of dollars of cryptocurrency is NOT easy, and it gets harder with every passing month, because validators and hodlers have billions of dollars of incentive to protect themselves.
    - fredfoobar 5y ago
      > if PoS chains are vulnerable because you can hack exchanges and use their coins to attack, then PoW chains are vulnerable because you can hack exchanges, sell the proceeds to buy ASICs (or just buy the ASIC company), and use those ASICs to attack the PoW network. Which one is easier to do and get away with?
    - jude- 5y ago
      Which is easier to pull off, once you have control of the stolen coins? * Use them to vote for two chain histories, and thereby get the victims slashed? * Launder the stolen coins, buy an ASIC fab, churn out ASICs, plug them into the power grid, and use them to continuously and sustainably attack a PoW chain for eternity, all while not getting caught? In case it's not obvious, the first one can be done the second the compromise takes place. The second one takes years. > Hacking billions of dollars of cryptocurrency is NOT easy, and it gets harder with every passing month, because validators and hodlers have billions of dollars of incentive to protect themselves. Why should a hodler bet that over 2/3 of the chain's validators will never, ever be compromised? Money doesn't buy invulnerability, and an attacker only has to succeed once at breaking quorum to break the chain.
- rawtxapp 5y ago
  If the community forks to void an attacker's coins, that creates a very bad precedent. It already happened with the dao hack (which was pretty bad to begin with), but if it keeps happening, why would you trust that blockchain.
  - ZephyrBlu 5y ago
    PoS doesn't fork the chain, you just lose your stake if you stake malicious blocks: https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/#how-does-pos-work https://ethereum.org/en/developers/docs/consensus-mechanisms...
- leishman 5y ago
  Now replace "attacker" with "somebody the largest stakers don't like" and see how dangerous this becomes.
grubles 5y ago
Important to note that Vitalik massively gains from Ethereum transitioning to Proof-of-Stake since he controls a large percentage of total ETH due to premining it before the project launched.
- meowkit 5y ago
  Important to note that anyone who holds ETH gains if the price goes up. I salute you Sherlock.
  - fredfoobar 5y ago
    looks like you missed "controls a large percentage of total ETH"
    - hanniabu 5y ago
      Except he doesn't
      - grubles 5y ago
        Vitalik, just one person, owns billions in ETH. That is the top 0.1%.
        SwagtimusPrime 5y ago
        And Satoshi, just one person, owns tens of billions in BTC. That is the top 0.01%.
        yaa_minu 5y ago
        Satoshi mined every single one of it and anyone would have been able to do same also he never sold his coins and left the project early on to avoid having too much control. Quite the opposite with Vitalik who on the other hand premined his eth, has been selling them Ever since, and continues to have significant control over ehereum.
chrischattin 5y ago
In Ethereum, you need 32 ETH, which is around ~$120k. That's prohibitive a normal person. After EIP1559 goes into effect, it's not out of the question that the price could rise 7x given the power laws at play. What happens when the cost to stake a node is $1M+? What happens 50 years from only the very richest .00001% can afford to run a node? I'm concerned EIP1559 and PoS is a very short sighted implementation that will move towards centralization of the network. There should be a floating minimum, or have no minimum at all to run a node. Not sure the exact tech solution, or I'd be submitting a pull request :).
- meowkit 5y ago
  32 ETH was set when it cost much less. That can always be changed if the number or validators is not sufficient to decentralize the network.
  - fredfoobar 5y ago
    Yeah yeah, everything can always be changed in the future.
    - everfree 5y ago
      Ethereum regularly undergoes hard forks to change its parameters. There's no schelling point over protocol specifics with Ethereum like there is with, say, Bitcoin.
  - roskelld 5y ago
    Genuine question: Who decides that?
    - fredfoobar 5y ago
      When there is a prominent founder, everyone usually tends to defer to them (in this case, Vitalik, see what happened to ETC vs ETH).
  - chrischattin 5y ago
fredfoobar 5y ago
> Our current financial system doesn't give people the ability to independently verify anything at all; it's even worse than the most centralized chains in that regard. I'm sorry, that sounds incorrect, many people have been "verifying" things independently and sounding the alarm, but nothing happens.
- SwagtimusPrime 5y ago
  Lol. Can you personally verify what your bank is doing? No you can't. If it was on the blockchain, you could.
  - fredfoobar 5y ago
    He's talking about the Financial System, not the Bank (akin to a node)
EugeneOZ 5y ago
With PoS one can just buy _governance_, that's all. All you need to have more influence on (PoS-based) Etherium is a huge amount of money. More power to money-bags! So “fresh” idea :)
- grubles 5y ago
  It shouldn't be much of a surprise to learn that Vitalik is part of the Ethereum Foundation which controls the trademark to Ethereum as well as all of the popular social media channels (r/ethereum, @ethereum twitter account, ethereum.org domain). Ethereum is the illusion of decentralization.
  - EugeneOZ 5y ago
    Well, I’m not naive enough to expect something else. People are making money and protect their businesses. It is ok for me. For some people (not for me) living in poor countries, mining was a chance to improve their lives. Now it's sold for the opportunity to give more money to those who have large amounts of money. All these talks about the climate are so ridiculous in this context - nobody even tried to calculate how much of that energy was produced by the wind or sun.
    - stormbrew 5y ago
      > nobody even tried to calculate how much of that energy was produced by the wind or sun. I've definitely seen some analysis that does? But I don't see how it matters. There's an opportunity cost there, where using solar or wind power for something like bitcoin could be better spend on something intrinsically (rather than abstractly) productive, like heating/cooling homes or whatever. And like, if suddenly it was decided magically somehow that "all bitcoin must be produced with renewable energy" I don't think the world would be made better by the sudden rise in price of solar panels by 10x like has happened with video cards. There's an inherent price inflationary effect involved in anything that's capable of producing 'free money'.
      - EugeneOZ 5y ago
leishman 5y ago
I'm mostly talking about governance. The biggest "users" and governance decision makers of any PoS protocol will be regulated financial institutions (e.g. Coinbase) operating on behalf of end users. In theory Joe Schmoe can be a staker from his garage, but in practice the only stakers that matter will be regulated custodians (full disclosure, I am the CEO of a regulated custodian) other than a handful of independent ETH whales (like yourself). Yes there will be a number of custodians "competing" with each other, but they will all largely operate under the same regulatory jurisdiction (or at least cooperating jurisdictions). If a PoS currency becomes mainstream, the Federal Reserve (because regulated banks will be the largest custodians) and Dept. of Treasury will have significant influence on governance debates. The big issue here is that governance decisions in PoW systems are split between miners (geographically distributed), custodians (largely US based) and other economic actors. In PoS systems only custodians will call the shots. That has very serious implications because custodians are regulated financial institutions with significant network effects, miners do not have this centralizing force. Lastly, to actually become a miner in a PoS system requires you to find or create a cheap source of energy and hardware and maintain this advantage in perpetuity. This is external to the system and can be done without paying off any existing Bitcoin actor. In a PoS system you, by definition, need to pay to play - you must purchase a sufficient stake of the currency from an existing insider if you want to have a seat at the table. It's the perfect insider game. Some may argue it aligns incentives, but it also centralizes control. These systems all have different tradeoffs. Maybe some people are ok with these tradeoffs for switching to PoS, but I'm not.
- vbuterin 5y ago
  How does this view of PoS governance explain how Ethereum protocol governance has operated in reality for the past five years? As far as I can tell, the power held by miners has been minimal; if miners had any significant power at all then the various issuance reductions and now EIP 1559 would not have been accepted nearly so smoothly. So when miners are replaced by PoS validators, the power that PoS validators will be inheriting is not that much... > Yes there will be a number of custodians "competing" with each other, but they will all largely operate under the same regulatory jurisdiction (or at least cooperating jurisdictions) Even if this is true (given all the decentralized staking pools coming out, and the still really large number of solo stakers, I really doubt it!), I don't see how that state of affairs would survive any attempt by governments to actually use their jurisdictional power. It's very easy to move stake around (or at least it will be very easy post-merge), so once a single pool does anything disagreeable people can just move their ETH to other pools. And staking infrastructure can live in any country; there aren't even constraints around needing to have cheap electricity there. > This is external to the system and can be done without paying off any existing Bitcoin actor I've heard this argument many times, but.... why does that even matter? Making a PoW farm requires paying off a hardware provider. Hardware providers are far more centralized than cryptocurrency hodlers, of which there are millions and you just need to find one willing to sell to you. "I want to buy coins but the existing hodlers are all colluding to not let me" is not a problem that anyone in the cryptocurrency space actually worries about in real life. Specialized hardware manufacturers, on the other hand, are few enough that such a thing is at least actually plausible....

eyezick 5y ago

I'd further add on to say PoS has the benefit of being able to eliminate bad actors unilaterally. You can't stop anyone from attacking a PoW chain over and over again. Attacking a PoS chain is much riskier as the attacker's stakes are held on chain and are at the mercy of the community who uses the network.

jude- 5y ago
Why does the attacker need to hold or buy any coins? All the attacker has to do to wreck havoc is prevent quorum from being reached. This can be done by knocking validators offline (which is a slashable penalty), or hacking validators and making them slash themselves, or hacking an exchange or two in order to amass control of 33% or more of the voting power.
- pshc 5y ago
  Correct me if I'm wrong, but being offline is not a slashable penalty. You would slowly lose ETH and eventually be ejected, but not slashed like a malicious validator would be.
  - jude- 5y ago
    Maybe I'm applying the term "slashing" too broadly. I've historically used it to describe the act of having your tokens taken away for bad behavior (either all at once, or incrementally). Is there a more-specific term for describing the process by which an offline validator loses their ETH over time?
- eyezick 5y ago
  The point is it mitigates the on-chain attack surface which is still prevalent on PoW. Off-chain attacks are still possible for all consensus mechanism.
  - jude- 5y ago
    What on-chain attack surface? The only way to permanently knock a PoW chain offline is to consistently out-mine everyone else. In PoS, once you lose BFT quorum (1/3 of all votes), it's game over.
    - vbuterin 5y ago
      > In PoS, once you lose BFT quorum (1/3 of all votes), it's game over. This is not how the Ethereum PoS chain's LMD GHOST fork choice works. If >1/3 drop offline, you stop finalizing, but the chain keeps growing.
      - jude- 5y ago
        No distributed system is guaranteed to make forward progress if over 1/3 of its voting nodes is faulty, full stop. Once an adaptive adversary controls more than 1/3 of the voting power, they can forever delay the remaining 2/3 of the voting nodes from reaching consensus. Hell, they'd even be able to delay votes from other nodes to slash their stolen stash. From this, I can conclude at least one of the following: * LMD GHOST is incorrect * your understanding of it is incorrect * LMD GHOST is not a BFT consensus algorithm
        deleted 5y ago
        [deleted]
- vbuterin 5y ago
  If hacking billions of dollars of cryptocurrency was actually easy, plenty of people who are not rich right now would be very very rich. Alternatively, if PoS chains are vulnerable because you can hack exchanges and use their coins to attack, then PoW chains are vulnerable because you can hack exchanges, sell the proceeds to buy ASICs (or just buy the ASIC company), and use those ASICs to attack the PoW network. Hacking billions of dollars of cryptocurrency is NOT easy, and it gets harder with every passing month, because validators and hodlers have billions of dollars of incentive to protect themselves.
  - fredfoobar 5y ago
    > if PoS chains are vulnerable because you can hack exchanges and use their coins to attack, then PoW chains are vulnerable because you can hack exchanges, sell the proceeds to buy ASICs (or just buy the ASIC company), and use those ASICs to attack the PoW network. Which one is easier to do and get away with?
  - jude- 5y ago
    Which is easier to pull off, once you have control of the stolen coins? * Use them to vote for two chain histories, and thereby get the victims slashed? * Launder the stolen coins, buy an ASIC fab, churn out ASICs, plug them into the power grid, and use them to continuously and sustainably attack a PoW chain for eternity, all while not getting caught? In case it's not obvious, the first one can be done the second the compromise takes place. The second one takes years. > Hacking billions of dollars of cryptocurrency is NOT easy, and it gets harder with every passing month, because validators and hodlers have billions of dollars of incentive to protect themselves. Why should a hodler bet that over 2/3 of the chain's validators will never, ever be compromised? Money doesn't buy invulnerability, and an attacker only has to succeed once at breaking quorum to break the chain.
rawtxapp 5y ago
If the community forks to void an attacker's coins, that creates a very bad precedent. It already happened with the dao hack (which was pretty bad to begin with), but if it keeps happening, why would you trust that blockchain.
- ZephyrBlu 5y ago
  PoS doesn't fork the chain, you just lose your stake if you stake malicious blocks: https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/#how-does-pos-work https://ethereum.org/en/developers/docs/consensus-mechanisms...
leishman 5y ago
Now replace "attacker" with "somebody the largest stakers don't like" and see how dangerous this becomes.

grubles 5y ago

Important to note that Vitalik massively gains from Ethereum transitioning to Proof-of-Stake since he controls a large percentage of total ETH due to premining it before the project launched.

meowkit 5y ago
Important to note that anyone who holds ETH gains if the price goes up. I salute you Sherlock.
- fredfoobar 5y ago
  looks like you missed "controls a large percentage of total ETH"
  - hanniabu 5y ago
    Except he doesn't
    - grubles 5y ago
      Vitalik, just one person, owns billions in ETH. That is the top 0.1%.
      - SwagtimusPrime 5y ago
        And Satoshi, just one person, owns tens of billions in BTC. That is the top 0.01%.
        yaa_minu 5y ago
        Satoshi mined every single one of it and anyone would have been able to do same also he never sold his coins and left the project early on to avoid having too much control. Quite the opposite with Vitalik who on the other hand premined his eth, has been selling them Ever since, and continues to have significant control over ehereum.

chrischattin 5y ago

In Ethereum, you need 32 ETH, which is around ~$120k. That's prohibitive a normal person. After EIP1559 goes into effect, it's not out of the question that the price could rise 7x given the power laws at play. What happens when the cost to stake a node is $1M+? What happens 50 years from only the very richest .00001% can afford to run a node? I'm concerned EIP1559 and PoS is a very short sighted implementation that will move towards centralization of the network. There should be a floating minimum, or have no minimum at all to run a node. Not sure the exact tech solution, or I'd be submitting a pull request :).

meowkit 5y ago
32 ETH was set when it cost much less. That can always be changed if the number or validators is not sufficient to decentralize the network.
- fredfoobar 5y ago
  Yeah yeah, everything can always be changed in the future.
  - everfree 5y ago
    Ethereum regularly undergoes hard forks to change its parameters. There's no schelling point over protocol specifics with Ethereum like there is with, say, Bitcoin.
- roskelld 5y ago
  Genuine question: Who decides that?
  - fredfoobar 5y ago
    When there is a prominent founder, everyone usually tends to defer to them (in this case, Vitalik, see what happened to ETC vs ETH).
- chrischattin 5y ago

fredfoobar 5y ago

> Our current financial system doesn't give people the ability to independently verify anything at all; it's even worse than the most centralized chains in that regard. I'm sorry, that sounds incorrect, many people have been "verifying" things independently and sounding the alarm, but nothing happens.

SwagtimusPrime 5y ago
Lol. Can you personally verify what your bank is doing? No you can't. If it was on the blockchain, you could.
- fredfoobar 5y ago
  He's talking about the Financial System, not the Bank (akin to a node)

EugeneOZ 5y ago

With PoS one can just buy _governance_, that's all. All you need to have more influence on (PoS-based) Etherium is a huge amount of money. More power to money-bags! So “fresh” idea :)

grubles 5y ago
It shouldn't be much of a surprise to learn that Vitalik is part of the Ethereum Foundation which controls the trademark to Ethereum as well as all of the popular social media channels (r/ethereum, @ethereum twitter account, ethereum.org domain). Ethereum is the illusion of decentralization.
- EugeneOZ 5y ago
  Well, I’m not naive enough to expect something else. People are making money and protect their businesses. It is ok for me. For some people (not for me) living in poor countries, mining was a chance to improve their lives. Now it's sold for the opportunity to give more money to those who have large amounts of money. All these talks about the climate are so ridiculous in this context - nobody even tried to calculate how much of that energy was produced by the wind or sun.
  - stormbrew 5y ago
    > nobody even tried to calculate how much of that energy was produced by the wind or sun. I've definitely seen some analysis that does? But I don't see how it matters. There's an opportunity cost there, where using solar or wind power for something like bitcoin could be better spend on something intrinsically (rather than abstractly) productive, like heating/cooling homes or whatever. And like, if suddenly it was decided magically somehow that "all bitcoin must be produced with renewable energy" I don't think the world would be made better by the sudden rise in price of solar panels by 10x like has happened with video cards. There's an inherent price inflationary effect involved in anything that's capable of producing 'free money'.
    - EugeneOZ 5y ago

leishman 5y ago

I'm mostly talking about governance. The biggest "users" and governance decision makers of any PoS protocol will be regulated financial institutions (e.g. Coinbase) operating on behalf of end users. In theory Joe Schmoe can be a staker from his garage, but in practice the only stakers that matter will be regulated custodians (full disclosure, I am the CEO of a regulated custodian) other than a handful of independent ETH whales (like yourself). Yes there will be a number of custodians "competing" with each other, but they will all largely operate under the same regulatory jurisdiction (or at least cooperating jurisdictions). If a PoS currency becomes mainstream, the Federal Reserve (because regulated banks will be the largest custodians) and Dept. of Treasury will have significant influence on governance debates. The big issue here is that governance decisions in PoW systems are split between miners (geographically distributed), custodians (largely US based) and other economic actors. In PoS systems only custodians will call the shots. That has very serious implications because custodians are regulated financial institutions with significant network effects, miners do not have this centralizing force. Lastly, to actually become a miner in a PoS system requires you to find or create a cheap source of energy and hardware and maintain this advantage in perpetuity. This is external to the system and can be done without paying off any existing Bitcoin actor. In a PoS system you, by definition, need to pay to play - you must purchase a sufficient stake of the currency from an existing insider if you want to have a seat at the table. It's the perfect insider game. Some may argue it aligns incentives, but it also centralizes control. These systems all have different tradeoffs. Maybe some people are ok with these tradeoffs for switching to PoS, but I'm not.

vbuterin 5y ago
How does this view of PoS governance explain how Ethereum protocol governance has operated in reality for the past five years? As far as I can tell, the power held by miners has been minimal; if miners had any significant power at all then the various issuance reductions and now EIP 1559 would not have been accepted nearly so smoothly. So when miners are replaced by PoS validators, the power that PoS validators will be inheriting is not that much... > Yes there will be a number of custodians "competing" with each other, but they will all largely operate under the same regulatory jurisdiction (or at least cooperating jurisdictions) Even if this is true (given all the decentralized staking pools coming out, and the still really large number of solo stakers, I really doubt it!), I don't see how that state of affairs would survive any attempt by governments to actually use their jurisdictional power. It's very easy to move stake around (or at least it will be very easy post-merge), so once a single pool does anything disagreeable people can just move their ETH to other pools. And staking infrastructure can live in any country; there aren't even constraints around needing to have cheap electricity there. > This is external to the system and can be done without paying off any existing Bitcoin actor I've heard this argument many times, but.... why does that even matter? Making a PoW farm requires paying off a hardware provider. Hardware providers are far more centralized than cryptocurrency hodlers, of which there are millions and you just need to find one willing to sell to you. "I want to buy coins but the existing hodlers are all colluding to not let me" is not a problem that anyone in the cryptocurrency space actually worries about in real life. Specialized hardware manufacturers, on the other hand, are few enough that such a thing is at least actually plausible....