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I'm not really convinced. Proof of Stake has a startup issue that Proof of Work doesn't have. If you want to have your coin begin as proof of stake you have t

• simiones 5y ago
  > If you want to have your coin begin as proof of stake you have to have some mechanism for how the initial coins are distributed and that method is usually going to involve the creators giving themselves a lot of coins. Don't Proof of Work coin issuers do the same? Even Satoshi has a pretty large amount of Bitcoin.
  • PeterisP 5y ago
    The thing is that PoW "works" even in the case where Satoshi-equivalent has most of coins, as the transactions are controlled by the mining power and new coins will be distributed through mining. With PoS, if founders hold most of the coins, then the scheme does not work as they de facto arbitrarily control the transactions and there's no way for a community to get that control unless they hand over the coins - thus, in PoS (unlike PoW) the founders need to solve the distribution problem before the scheme can become useful.
  • aaronhayes 5y ago
    There were no pre-mined bitcoin distributed. Satoshi mined his coins in the early days but crucially anyone could participate and mine at the same time.
    • Yizahi 5y ago
      I know that in USA legal system there is concept "spirit of the law" and afaik there were cases when a person was intentionally abiding the "word of the law" but breaking "spirit of the law" and was penalized for this. So anyway, Satoshi solo mine and anyone else's solo mine, is not technically a premine, but in a spirit - it is. Saying that solo mine is not a premine is true, but you know, I know, everyone knows that essentially it is exactly the same as premine.
      • atweiden 5y ago
        In a premine, developers hard code coin balances for themselves into their own ledger prior to public mining becoming available. Satoshi clearly didn’t do this. It’s that cut and dry.
        • bhaak 5y ago
          The definition of a premine isn't as clear as you put it. Or at least isn't always used in the same way. With your definition, Ethereum only had a 16% premine.
          • atweiden 5y ago
            “Premine”: previous to public mining, coins were distributed. Satoshi absolutely didn’t premine Bitcoin.
            • FabHK 5y ago
              And yet, Satoshi has huge holdings just as if premined.
  • psychlops 5y ago
    This seems like a very cynical take. Somebody has to mine to keep the network secure. Starting the code and hoping the world starts mining equally is naive.
• CryptoPunk 5y ago
  >>The problem with that is that it's never going to be in the interest of the miners to actually change to it. Miners have no way to stop a hard fork. That is entirely dependent on what client users and service providers run, and miners have no control over that. And Ethereum 2.0 has already launched its Phase 0 (first of three phases), on December 1st, 2020.
  • cableshaft 5y ago
    Yeah I'm not sure what the parent is going on about regarding ETH 2.0. I already converted some ETH -> ETH 2.0 and its earning more coin in rewards right now. Granted it can't be moved until the next phase, I believe, which could still be a while, but it's not vaporware.
• ddrdrck_ 5y ago
  Some projects try to resolve initial distribution issue by issuing airdrops. At least one project even gone further by doing what they called a "fairdrop", so that small holders receive more than large holders : https://medium.com/osmosis/osmo-token-distribution-ae27ea2bb4db https://medium.com/osmosis/osmo-token-distribution-ae27ea2bb...
• tromp 5y ago
  Indeed; whereas PoS is only a consensus mechanism, PoW is both a consensus and a coin distribution mechanism. While Ethereum started out as PoW, its huge premine still constitutes a big trust issue.
  • CryptoPunk 5y ago
    Most of the premine was allocated via an open crowdsale.
    • tromp 5y ago
      Of which the creators can grab an arbitrary part essentially for free.
      • CryptoPunk 5y ago
        They absolutely could not grab an arbitrary part for free. What an absurd claim. The BTC paid during the Ethereum crowdsale went to the Ethereum Foundation bitcoin address, and that address can be audited. Misappropriating those funds would leave a massive chain trail, and require a massive conspiracy to plant the Ethereum Foundation with co-conspirators. It would be unthinkable. On top of all of that, the operators would need to wait years to retrieve the BTC to not draw attention to the scam, meaning the assets would be locked up and out of reach. So even under this fantastical scenario, the ETH wouldn't be free: there would be a very significant liquidity cost in funds lockup, not to mention all the planning and risks involved in participating in a complex crime, involving an auditable foundation operating under Swiss law.
        • tromp 5y ago
          > Misappropriating those funds Where are the transparency reports detailing how the 31529 BTC raised in the crowdsale were spent? It would seem straightforward to spend a large fraction of that on software development which would mean that the creators can take part in the crowdsale (which is largely anonymous) and have the spent BTC flow back to themselves.
• visualradio 5y ago
  Ideally a system of credit based on proof of work is based on proof of productive work embodied in artifacts which competition can increase the supply of without restraint. A proof of productive work system can be implemented by having public employees of local loan office assess the minimum labor replacement cost of crops, equipment, structures, materials, and working inventory held on sites. Then allowing loans to be issued on security of the material capital at a duration which ensures the money is repaid before the value of the work stored in the material capital fully depreciates. So bitcoin's proof of work algorithm is proof of unproductive work rather than proof of productive work. A public system of credit based on proof productive work stored in material capital stored on land does require establishing and maintaining a well organized state. But this is not necessarily an ethical dilemma for the majority of the population and may be necessary to solve global problems that society may be faced with in the future.
  • prox 5y ago
    What I think you’re saying is that it’s not adding value? For me at least that is it main flaw. Trust is the only thing that’s keeping it alive, and the need for more people to buy into it. To me that makes it sound like just another MLM system. Cryptocoin might crash at some point because of these issues.
  • sparsely 5y ago
    If you're doing productive work then you're already producing something of value, and can likely sell more easily and safely using the existing financial system. It would have to be some sort of productive work that is not otherwise valued due to limitations in our economic system, perhaps climate change related actions as explored in Ministry for the Future. Still seems like it would just be easier to pay people normally to do that work.
• Yizahi 5y ago
  This is actually quite fun to say out loud - "here is a revolutionary trustless system of currency, but you must trust a group of anonymous developers in the non-extradition offshore not to screw you with premine"
  • ptr2voidStar 5y ago
    Exactly This. Why can people NOT see this?!
  • vmception 5y ago
    anonymous non-extradition seems like an irrelevant detail if node consensus is the entire extent of the contract but the anonymous part does deter any social blowback
  • astoor 5y ago
    "here is a revolutionary trustless system of currency, but you must trust a group of anonymous developers in the non-extradition offshore not to screw you with premine" and trust them to make immutable smart contracts 100% bug free to prevent scandals like DAO onwards, and trust shady mining cartels, and unregulated exchanges, and the shadowy cryptocurrency oligarchs manipulating prices, etc. The fact is that this "revolutionary new financial system" doesn't remove trust - it just shifts trust to the less trustworthy.
  • mattwilsonn888 5y ago
    Have you never used a block explorer, or do you just not understand how blockchain works? I fully agree there are weird insider deals based on allocations and premines - but that's all fully auditable, and if it isn't, that says all you need to know. You are applying the flaws of the worst examples across the whole technology AKA a strawman. Maybe you're just salty you could never take the risk required to make money on new tech and don't want to think of yourself as a Luddite.
    • Yizahi 5y ago
      I have fun staying poor, thank you very much, as your group likes to say. And since you have managed to learn a concept called "strawmen" (not applicable here, but anyway), you may also want to learn a concept called "ad hominem". So please tell me, how does being auditable (note that "auditable" is very different from "audited") prevents creators from selling premine?
• Kbelicius 5y ago
  There is a third method which, funnily enough, was implemented by the very first PoS coin. A hybrid blockchain in which PoW is used for distribution.
• x4e 5y ago
  > Proof of Work on the other hand doesn't have this issue. The creator has the same ability to mine coins as anyone else does, so it doesn't have the same initial trust issues as Proof of Stake does. It certainly does. Many POW coins are kept private for a small amount of time so that the developers can mine without competition before making the network public.
  • mattwilsonn888 5y ago
    That's not a proof of work issue - that's a people issue, and its auditable.
• rawtxapp 5y ago
  PoS is a pretty broken system imo, it essentially codefies "rich gets richer" into the protocol. The biggest holders now control both the supply on the exchanges and the protocol itself. It creates all kinds of weird issues (for example, what happens if an attacker gets a hold of a significant percentage of the coins, now they also have a great control over the network). Stakers don't have the same pressure to sell their coins because they are not actively spending money on hardware and energy which makes the system more exclusionary over time. I can go on and on. For all of it's problems, PoW is simple and just works. It ensures that there will be constant supply of coins for sale and ensures that nobody can just become richer because they started rich.
  • Slartie 5y ago
    > nobody can just become richer because they started rich Right. In PoW, they need access to limited semiconductor supplies and cheap electricity. Which are two things that can be bought with...what was that stuff called...? Ah, yes: money! So PoW does just the same - the rich tend to get richer - but it adds the necessity to cause unnecessary environmental pollution on the scale of an entire country to it. Oh, and all the crypto holders pay collectively for that unnecessary "work". What a stroke of genius!
    • rawtxapp 5y ago
      The profit margins of a miner is pretty slim. If the price increases, mining becomes profitable, competition increases bringing down the profitability, likewise in reverse. So yes, you need money to mine, but whatever you mine, you pretty much have to turn around and sell it right away to cover your costs and keep a small profit.
      • Slartie 5y ago
        That's exactly what I meant with "all crypto holders pay for it": in the state of equilibrium of costs and rewards, the huge costs are effectively paid by devaluing existing crypto holdings and via transaction costs. Is that good for crypto holders? No way! It's also not too good for miners of course, as they are in it for profit, not for rewards equaling costs. But fortunately for the miners, crypto mining is rarely in that state of equilibrium. In reality, mining does allow for a hefty profit margin to be reaped most of the time. Ask the miners if you don't believe me, they're not exactly used to just making "small profits". And who pays for that profit margin? Crypto holders and those making transactions with it - again! However you want to look at it, this coin looks crappy from both sides. Unless you're a miner.
• hanniabu 5y ago
  > Etherium 2.0 has been supposedly just around the corner for years and it never really arrives. They've been pretty public that it's years away for a while now. Nobody has ever said it's just around the corner until recently when it was given priority over the merge and is now estimated to be completed Q1 2022 (or Q4 2021 in the unlikely best-case scenario). > Proof of Work on the other hand doesn't have this issue. The creator has the same ability to mine coins as anyone else does Unless they ninja mine (pre-mine) like Satoshi did....
  • psychlops 5y ago
    > Unless they ninja mine (pre-mine) like Satoshi did.... What proof would you offer of a premine by Satoshi?
    • bombcar 5y ago
      It’s perhaps not technically a premine but practically it is. There’s a protection however - if any of those coins ever move Bitcoin will have a very interesting day.
      • psychlops 5y ago
        The problem with labelling it a premine is that it is, intentionally or not, a loaded FUD term commonly used to describe scam coins and to enrich "founders". Bitcoin was not premined in any sense of the word and Satoshi was quite verbose and open about his reasoning and launch date as well as supplying working mining code publicly.
        • hanniabu 5y ago
          He premined so much that even after 10 years of emissions his stake is >5%
  • rawtxapp 5y ago
    Satoshi mined it the same as anyone else and his stash is as good as gone for all practical purposes.
• woah 5y ago
  Didn’t Satoshi premine a large number of coins?
  • haakon 5y ago
    No. Bitcoin was launched publicly and announced, and anybody could mine, even on the most dinky laptop. Nothing was mined prior to launch (aka a premine).