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Compute power requires money though, no? Whoever has the most capital now controls the BTC blockchain, which happens to be mostly miners in China. It’s a lot ea
by JamilD 5y ago
Compute power requires money though, no? Whoever has the most capital now controls the BTC blockchain, which happens to be mostly miners in China. It’s a lot easier for me to stake ETH than to buy hundreds of GPUs.
And my reward is linear with how much I stake or put down, whereas with economies of scale in mining the reward is more like quadratic. Seems to me that with PoS the rich get richer linearly, with PoW the rich get richer ~quadratically.
If I spend 0.01% of what the Chinese miners spend on my mining setup, I’m not getting 0.01% of the rewards.
- rawtxapp 5y agoThe thing is, let's say you spend 100M$ on mining equipment today, that equipment is worth a lot less in a year from now and is worth practically nothing in 5+ years, so you can't just sit on it, you have to keep spending. Likewise with electricity, it's not free, you have to source it and spend money on it. So whatever Bitcoin reward you get barely covers your running cost + small profit margin. Imagine like you're running from a monster, you can't stop or you'll become irrelevant. Whereas with ETH, I can buy 100M$ worth of it, I'll get say 5% back which means I'm making 5M$ every year, thing is I don't have any pressure to sell it whereas the poorer stakers will have to sell to cover their cost of living or other reasons, so over time the % of my stake in eth grows. Things get even worse when you include custodians into the mix, exchanges will have much larger wallets and get much larger rewards which they may not share with the actual holders or keep a small % for themselves.