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> In short, anyone with coins can put them in a special state You mean exchanges. People aren't going to run a node and risk to be punished for bad configurati

> In short, anyone with coins can put them in a special state You mean exchanges. People aren't going to run a node and risk to be punished for bad configuration or a power outage. They are going to deposit to managed staking at Coinbase and Binance which will be the biggest validators. Congratulations. You've just recreated the current financial system with central banks and whatnot.

xur17 5y ago
Maybe - ETH staking was specifically setup with incentives to encourage self hosting as much as possible (downtime penalties are tiny, especially if they only comprise a small portion of the network). There are some "decentralized" staking options that don't give over custody of your funds (the node operator only has enough control to run the node, doesn't actually have the ability to take your funds). And even with centralized exchanges, at least this system gives people a choice. I can choose to run my own Ethereum staking node. I can't choose to operate a bank / participate in the fed's central banking system.
- ulzeraj 5y ago
  If the link bellow is accurate then the penalty for being offline is 4 times the base reward. https://consensys.net/blog/codefi/rewards-and-penalties-on-ethereum-20-phase-0#:%7E:text=Rewards%20and%20penalties-,Slashing,blocks%20for%20the%20same%20slot https://consensys.net/blog/codefi/rewards-and-penalties-on-e... For someone who is staking 32 ETH on a faulty RPi how big the reward would be? I'm too dumb to figure out the reward value.
woah 5y ago
Why comment with an incorrect statement on something you don’t seem to know much about? Most proof of stake algorithms allow people to delegate coins to validators who run actual nodes. The coins are still in control of the user, but they will lose some if the validator they have delegated to misbehaves.
- ulzeraj 5y ago
  I'm not talking about who owns the coins. I'm talking about the fact that people will just use the managed nodes hosted by exchanges to stake because there are penalties for poorly configured or offline nodes. As a result you have a huge chunk of your network controlled by exchanges who besides controlling the ramps for fiat money and custody of your coins now they also become the heaviest validators. Tell me how this is not a weird clone of our current financial system.

xur17 5y ago

Maybe - ETH staking was specifically setup with incentives to encourage self hosting as much as possible (downtime penalties are tiny, especially if they only comprise a small portion of the network). There are some "decentralized" staking options that don't give over custody of your funds (the node operator only has enough control to run the node, doesn't actually have the ability to take your funds). And even with centralized exchanges, at least this system gives people a choice. I can choose to run my own Ethereum staking node. I can't choose to operate a bank / participate in the fed's central banking system.

ulzeraj 5y ago
If the link bellow is accurate then the penalty for being offline is 4 times the base reward. https://consensys.net/blog/codefi/rewards-and-penalties-on-ethereum-20-phase-0#:%7E:text=Rewards%20and%20penalties-,Slashing,blocks%20for%20the%20same%20slot https://consensys.net/blog/codefi/rewards-and-penalties-on-e... For someone who is staking 32 ETH on a faulty RPi how big the reward would be? I'm too dumb to figure out the reward value.

woah 5y ago

Why comment with an incorrect statement on something you don’t seem to know much about? Most proof of stake algorithms allow people to delegate coins to validators who run actual nodes. The coins are still in control of the user, but they will lose some if the validator they have delegated to misbehaves.

ulzeraj 5y ago
I'm not talking about who owns the coins. I'm talking about the fact that people will just use the managed nodes hosted by exchanges to stake because there are penalties for poorly configured or offline nodes. As a result you have a huge chunk of your network controlled by exchanges who besides controlling the ramps for fiat money and custody of your coins now they also become the heaviest validators. Tell me how this is not a weird clone of our current financial system.