5 ms·

Honest question: How is that different from proof of work, where those with significant resources (1%, a nation, etc) can spend significantly on mining equipmen

Honest question: How is that different from proof of work, where those with significant resources (1%, a nation, etc) can spend significantly on mining equipment?

awaythrowact 5y ago
My understanding is, proof of stake is not more secure than proof of work. Reason for PoS are efficiency, speed of transaction, lower gas fees, less environmental impact, etc. (Of course there can be secure PoS, insecure PoS, secure PoW, insecure PoW…)
- yokem55 5y ago
  Polygon basically checkpoints a spreadsheet onto the eth chain on an interval, but there is no way to guarantee that there weren't any shenanigans between the checkpoints. This is a big improvement over say BSC which does no such thing, but it isn't the security of a true eth L2. Real L2's can prove that their output to L1 is legitimate either through zero knowledge cryptographic proofs (loopring, zksync) or through a game theory fraud check (optimism, arbitrum).
- baby 5y ago
  PoS is more secure in general, also PoS and BFT-based cryptocurrencies in periods of network partitions will rather come to a stop instead of allowing safety to be violated (double spending).
  - jude- 5y ago
    Once they stop, they don't start again without external intervention (so you're back to The DAO when it comes to which validators are not Byzantine). PoS is a bet that 1/3 of the staked tokens never, ever fall into the hands of Byzantine actors -- not by purchase, not by theft, and not by DeFi smart contract hacks. That's not a bet I would take.
    - baby 5y ago
      That’s not true, a good bft protocol will resume once network conditions stabilize.
      - jude- 5y ago
        And how, exactly, will the "network conditions stabilize" if over 1/3 of the votes are malicious, and thus able to prevent the honest voters from ever agreeing on anything ever again? Are you betting that the attacker will just get bored and walk away? Also, what a confusing choice of words. A distributed system is BFT (or not BFT) regardless of whether or not the underlying message broadcast medium is synchronous/asynchronous, or reliable/unreliable. The "network conditions" being "stable" have no bearing on the voters' ability to reach agreement -- that's solely a function of whether or not f or fewer votes are malicious out of 3f + 1 votes.
        baby 5y ago
        I was talking about network conditions, not a threshold of malicious participants (in which case yeah you will have liveness issues). Your second paragraph is false also. Different BFT systems have different assumptions. Some work in asynchronous settings, some work in semi-synchronous settings, etc.
        jude- 5y ago
        You should consider rereading Leslie Lamport's original paper. BFT is a property of corrupt votes, not the network. You keep trying to make it about the network. Like, if you want to have a conversation about how the network can influence the system's fault tolerance, you should instead consider the network topology -- as in, which routes between honest nodes include corrupt nodes. This is also considered by the paper, since corrupt nodes can censor or rewrite messages, and thus influence how many corrupt nodes the system can truly tolerate, given a network topology. But in no case does message delay give a BFT system's node an excuse to make forward progress without first verifying that at least 2f+1 replicas agree with its decision. Even voting on a view change to remove a presumed dead node requires a 2f+1 vote.
rawtxapp 5y ago
Whatever equipment you buy will lose it's value quickly, in 5+ years, it's probably worthless. And that's ignoring all the money you have to spend on electricity, non-stop and increasingly. In PoW, if miners slow down, they'll become irrelevant. Even if you manage to acquire a 51% hash rate for example (which is extremely difficult), it'll be very difficult to keep it over a long enough period of time. PoS is fundamentally broken in my opinion, it literally says "rich gets richer" and wealthy stakers will get higher (absolute) rewards which they don't have any incentive to sell since they didn't spend any energy to get it. That's even ignoring all the custodians which have large quantities of the said crypto, so they can just keep the rewards to themselves or keep a sizeable % of it. One of the motivations for the DAO hack hardfork btw was that the attacker would hold significant power under a PoS system.
- hanniabu 5y ago
  So in other words only the rich can mine
  - rawtxapp 5y ago
    You can participate in mining pools, but realistically speaking unless you have very powerful hardware, you're better off just buying Bitcoin outright. Same with PoS, you can stake with a pool if you have less than 32eth, but your returns on that are not going to be comparable to what large holders get (same percentage, but very tiny in absolute numbers).
    - wmf 5y ago
      You're arguing that "small" (<$80K) amounts of money aren't worth investing even at a very high APR. This is pretty contrary to most investment advice.
      - rawtxapp 5y ago
        I'm not, even small amounts should be invested of course, I'm just pointing out that rich benefit the most in either scenario. Also worth pointing out, high APRs aren't guaranteed and the network fees are supposed to be significantly decreased post EIP-1559. Also, for those who don't meet 32 eth threshold, there's good chance they are not even remotely close to that threshold.
baby 5y ago
Basically in proof of work you have no idea who is participating at any moment. For example, the NSA could be running a blockchain in parallel and if they have more power create a fork. With proof of stake you are always aware of the participants in the system and a fork will only happen it the richest decide to fork. But why would they? In Bitcoin the most powerful miner might have no bitcoin and no incentive to keep the network safe. At the same time, because of this, you don’t really get finality in Bitcoin. You get some assurance that your transaction is “confirmed” after a number of block but you’re never really sure. In proof of stake you can have consensus protocols with true finality, meaning that there’ll be no forks for sure if a threshold of participants remained honest.
Ericson2314 5y ago
It's not! Except on wastes far more electricity. We cannot an-cap our way to a classless society anyways, people. PoS is unquestionably the lesser evil of the two.
keymone 5y ago
The difference is that PoW is permissionless and PoS is permissioned system. Another difference is that in PoS you pay once and get benefits forever, in PoW you must actively choose to spend energy mining. One more difference is that once you become a staker, your power in the system only grows, in PoW anybody can start mining and dilute your power. PoS is simply worse from every angle and it’s also not cheaper because MR=MC.
- s7atic 5y ago
  > The difference is that PoW is permissionless and PoS is permissioned system. This is a big statement without an argument to back it up. > PoS is simply worse from every angle and it’s also not cheaper because MR=MC. The difference is that MC in PoS is mainly interest costs, while in PoW it's energy and hardware.
  - keymone 5y ago
    PoS is permissioned system because if you want to become a validator you must convince another (potential) validator to give up part of his stake. > MC in PoS is mainly interest costs no, it's also costs of fighting (via politics, marketing and hacking) for that initial pre-mined stake. it's not cheaper than PoW and has worse security properties due to all sorts of attacks - long range, grinding, etc. ultimately it's flawed because unlike in PoW there is no universally objective measure of geniuneness of a chain (the "work" in PoW).
    - CryptoPunk 5y ago
      PoS is effectively permissionless given the number of parties that have the stakeable asset and are willing to sell it. >>no, it's also costs of fighting (via politics, marketing and hacking) for that initial pre-mined stake. There is no fight if there was a transition from PoW to PoS, and thus no premine, or if the premine was distributed via an open crowdsale, with revenue allocated to a non-profit foundation. Your analysis makes too many tenuous assumptions to push one side of the debate.

Honest question: How is that different from proof of work, where those with significant resources (1%, a nation, etc) can spend significantly on mining equipment?

awaythrowact 5y ago

My understanding is, proof of stake is not more secure than proof of work. Reason for PoS are efficiency, speed of transaction, lower gas fees, less environmental impact, etc. (Of course there can be secure PoS, insecure PoS, secure PoW, insecure PoW…)

yokem55 5y ago
Polygon basically checkpoints a spreadsheet onto the eth chain on an interval, but there is no way to guarantee that there weren't any shenanigans between the checkpoints. This is a big improvement over say BSC which does no such thing, but it isn't the security of a true eth L2. Real L2's can prove that their output to L1 is legitimate either through zero knowledge cryptographic proofs (loopring, zksync) or through a game theory fraud check (optimism, arbitrum).
baby 5y ago
PoS is more secure in general, also PoS and BFT-based cryptocurrencies in periods of network partitions will rather come to a stop instead of allowing safety to be violated (double spending).
- jude- 5y ago
  Once they stop, they don't start again without external intervention (so you're back to The DAO when it comes to which validators are not Byzantine). PoS is a bet that 1/3 of the staked tokens never, ever fall into the hands of Byzantine actors -- not by purchase, not by theft, and not by DeFi smart contract hacks. That's not a bet I would take.
  - baby 5y ago
    That’s not true, a good bft protocol will resume once network conditions stabilize.
    - jude- 5y ago
      And how, exactly, will the "network conditions stabilize" if over 1/3 of the votes are malicious, and thus able to prevent the honest voters from ever agreeing on anything ever again? Are you betting that the attacker will just get bored and walk away? Also, what a confusing choice of words. A distributed system is BFT (or not BFT) regardless of whether or not the underlying message broadcast medium is synchronous/asynchronous, or reliable/unreliable. The "network conditions" being "stable" have no bearing on the voters' ability to reach agreement -- that's solely a function of whether or not f or fewer votes are malicious out of 3f + 1 votes.
      - baby 5y ago
        I was talking about network conditions, not a threshold of malicious participants (in which case yeah you will have liveness issues). Your second paragraph is false also. Different BFT systems have different assumptions. Some work in asynchronous settings, some work in semi-synchronous settings, etc.
        jude- 5y ago
        You should consider rereading Leslie Lamport's original paper. BFT is a property of corrupt votes, not the network. You keep trying to make it about the network. Like, if you want to have a conversation about how the network can influence the system's fault tolerance, you should instead consider the network topology -- as in, which routes between honest nodes include corrupt nodes. This is also considered by the paper, since corrupt nodes can censor or rewrite messages, and thus influence how many corrupt nodes the system can truly tolerate, given a network topology. But in no case does message delay give a BFT system's node an excuse to make forward progress without first verifying that at least 2f+1 replicas agree with its decision. Even voting on a view change to remove a presumed dead node requires a 2f+1 vote.

rawtxapp 5y ago

Whatever equipment you buy will lose it's value quickly, in 5+ years, it's probably worthless. And that's ignoring all the money you have to spend on electricity, non-stop and increasingly. In PoW, if miners slow down, they'll become irrelevant. Even if you manage to acquire a 51% hash rate for example (which is extremely difficult), it'll be very difficult to keep it over a long enough period of time. PoS is fundamentally broken in my opinion, it literally says "rich gets richer" and wealthy stakers will get higher (absolute) rewards which they don't have any incentive to sell since they didn't spend any energy to get it. That's even ignoring all the custodians which have large quantities of the said crypto, so they can just keep the rewards to themselves or keep a sizeable % of it. One of the motivations for the DAO hack hardfork btw was that the attacker would hold significant power under a PoS system.

hanniabu 5y ago
So in other words only the rich can mine
- rawtxapp 5y ago
  You can participate in mining pools, but realistically speaking unless you have very powerful hardware, you're better off just buying Bitcoin outright. Same with PoS, you can stake with a pool if you have less than 32eth, but your returns on that are not going to be comparable to what large holders get (same percentage, but very tiny in absolute numbers).
  - wmf 5y ago
    You're arguing that "small" (<$80K) amounts of money aren't worth investing even at a very high APR. This is pretty contrary to most investment advice.
    - rawtxapp 5y ago
      I'm not, even small amounts should be invested of course, I'm just pointing out that rich benefit the most in either scenario. Also worth pointing out, high APRs aren't guaranteed and the network fees are supposed to be significantly decreased post EIP-1559. Also, for those who don't meet 32 eth threshold, there's good chance they are not even remotely close to that threshold.

baby 5y ago

Basically in proof of work you have no idea who is participating at any moment. For example, the NSA could be running a blockchain in parallel and if they have more power create a fork. With proof of stake you are always aware of the participants in the system and a fork will only happen it the richest decide to fork. But why would they? In Bitcoin the most powerful miner might have no bitcoin and no incentive to keep the network safe. At the same time, because of this, you don’t really get finality in Bitcoin. You get some assurance that your transaction is “confirmed” after a number of block but you’re never really sure. In proof of stake you can have consensus protocols with true finality, meaning that there’ll be no forks for sure if a threshold of participants remained honest.

Ericson2314 5y ago

It's not! Except on wastes far more electricity. We cannot an-cap our way to a classless society anyways, people. PoS is unquestionably the lesser evil of the two.

keymone 5y ago

The difference is that PoW is permissionless and PoS is permissioned system. Another difference is that in PoS you pay once and get benefits forever, in PoW you must actively choose to spend energy mining. One more difference is that once you become a staker, your power in the system only grows, in PoW anybody can start mining and dilute your power. PoS is simply worse from every angle and it’s also not cheaper because MR=MC.

s7atic 5y ago
> The difference is that PoW is permissionless and PoS is permissioned system. This is a big statement without an argument to back it up. > PoS is simply worse from every angle and it’s also not cheaper because MR=MC. The difference is that MC in PoS is mainly interest costs, while in PoW it's energy and hardware.
- keymone 5y ago
  PoS is permissioned system because if you want to become a validator you must convince another (potential) validator to give up part of his stake. > MC in PoS is mainly interest costs no, it's also costs of fighting (via politics, marketing and hacking) for that initial pre-mined stake. it's not cheaper than PoW and has worse security properties due to all sorts of attacks - long range, grinding, etc. ultimately it's flawed because unlike in PoW there is no universally objective measure of geniuneness of a chain (the "work" in PoW).
  - CryptoPunk 5y ago
    PoS is effectively permissionless given the number of parties that have the stakeable asset and are willing to sell it. >>no, it's also costs of fighting (via politics, marketing and hacking) for that initial pre-mined stake. There is no fight if there was a transition from PoW to PoS, and thus no premine, or if the premine was distributed via an open crowdsale, with revenue allocated to a non-profit foundation. Your analysis makes too many tenuous assumptions to push one side of the debate.