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> nobody can just become richer because they started rich Right. In PoW, they need access to limited semiconductor supplies and cheap electricity. Which are tw

> 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.
  - pinkybanana 5y ago
    > However you want to look at it, this coin looks crappy from both sides. Unless you're a miner. Depends on what you are comparing to. For me, Bitcoin is easier to understand than the fiat system we are currently using, and that's why I'm heavily invested in to it. In addition to miners making huge profits, there have been also cases where miner operations have turned sour, KnC Miner being one example. Yes, there might be better systems out there. But BTC has very clear and simple protocol rules which are easy to understand, and it has properties which are very lucrative (permissionless, decentralized, limited supply, easily verifiable and transferable and so on). Other consensus mechanisms fail to deliver their promise in as effective way.
fleddr 5y ago
No, they are far from the same. It's true that BTC mining is capital intensive, yet it is highly competitive and risky, and most miners get a decent profit, yet need to sell the vast majority of mined coins to run their operation. Miners can never move on some parabolic increase of wealth as the very protocol itself prevents this. Rather, we should look at holders. Bitcoin is fair in the sense that it does not have rich get richer built in. If I'm rich and own 1,000 BTC whilst some poor slum has 0.001 BTC, neither of us has an advantage within the protocol. The rich person does not get free extra coins just for owning lots, nor do they have any additional say anywhere within the protocol. With PoS, just having lots of money means you get free new money, as well as an extra say in the protocol itself. Further, you should speak of electricity consumption combined with the energy mix. Electricity consumption does not automatically translate into pollution.
- pinkybanana 5y ago
  I wouldn't say BTC is fair, but it is clearly fairer. With PoS coins, it is clear that minting new coins will heavily centralize for exchanges and big holders. With BTC, miners are clearly categorized as separate economic actor, where the skillset and capital needed to mint new coins is very different from let's say operating an exchange.
  - fleddr 5y ago
    I have a feeling that there's far too much emphasis on mining from a wealth perspective. The vast majority of Bitcoin is owned by a few thousand whales combined with many millions of smaller holders. There seems to be this narrative where some people believe miners are minting and then holding all the coins, getting ever richer, but this is plain false. It would be true with PoS though, so agree.
- viraptor 5y ago
  > If I'm rich and own 1,000 BTC whilst some poor slum has 0.001 BTC, neither of us has an advantage within the protocol. Why would we care about "advantage within the protocol" while ignoring the whole world around it? A similar absurd description is: one person is holding $1B in their hands, another is holding $1 - neither has more say about the money nor any advantage within the system as long as they don't spend it. It's true, but not very meaningful - we do things with money we own.
kerkeslager 5y ago
1. Including sarcasm in your post didn't achieve anything except to increase the reader's blood pressure and make people like you less. Let's keep this polite, please. 2. You're right that the rich get richer with PoW as well, but I think we can agree that the connection between existing wealth and increasing wealth is stronger with PoS--PoS is almost literally just a statement of "the rich get richer". 3. The "it adds the necessity to cause unnecessary environmental pollution" argument is simply incorrect. Much of existing mining is already done with renewable energy--it's the most cost-effective way to mine anyway in most cases.
- Slartie 5y ago
  1. It helps get the point across just _how crazy_ this is. Sarcasm isn't only a tool to personally attack people - it's also a tool to verbally emphasize objectively valid arguments. 2. That's the beauty of it! We arrive at the same result, but just skip the part where people need to buy tons of custom silicon that can't do anything other than burn energy for mining, and then burn energy. That part has a lot of not-so-nice side effects on the real world out there, from silicon shortage to environmental pollution. 3. It is entirely correct. Even if some mining in some places is done with renewable energy (which is far from the majority - otherwise: please provide proof for your statement regarding just "how much" mining is renewable-based), that renewable energy is removed from the market and thus can't be used to power other consumers, which then must use fossil-fuel based energy sources. It's not like there's not enough demand for energy in the world, especially of the renewable kind.
  - ballofrubber 5y ago
    The second point is objectively wrong. PoW needs participants to spend capital in order to keep the organization running, thus not the rich get richer, but the more efficient get richer. PoS participants have no sell pressure and no way of being "better" than their peers, which is why it is incredibly broken. In a PoW system you have fierce competition and the drive to the cheapest energy. Which today is stranded energy, that the market would never buy. It is hard to estimate what percentage is truly renewable. The biggest source of energy was hydroelectric. It is estimated that during rain season the renewable percentage is up to 70%. However even if you look at the lowest estimate of renewable energy (~25%) you get double the percentage of the best country. Bitcoin is the true solution to monetizing cheap energy production. It removes a large risk associated with investing in renewables as the network is a buyer of last resort. Thus you know that your energy always sees 100% usage (which is a big problem with grids today) Just a small thought experiment. Lets assume you want to build a charging station for EVs powered by your own solar farm at a somewhat remote location. 4 hours of the day you have a peak consumption of 100 units, the rest you only have 80 units consumption. Moving energy over large distances is incredibly expensive. Having a buyer for your energy (Bitcoin network) means that the investment carries a lot less risk.

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.
- pinkybanana 5y ago
  > However you want to look at it, this coin looks crappy from both sides. Unless you're a miner. Depends on what you are comparing to. For me, Bitcoin is easier to understand than the fiat system we are currently using, and that's why I'm heavily invested in to it. In addition to miners making huge profits, there have been also cases where miner operations have turned sour, KnC Miner being one example. Yes, there might be better systems out there. But BTC has very clear and simple protocol rules which are easy to understand, and it has properties which are very lucrative (permissionless, decentralized, limited supply, easily verifiable and transferable and so on). Other consensus mechanisms fail to deliver their promise in as effective way.

fleddr 5y ago

No, they are far from the same. It's true that BTC mining is capital intensive, yet it is highly competitive and risky, and most miners get a decent profit, yet need to sell the vast majority of mined coins to run their operation. Miners can never move on some parabolic increase of wealth as the very protocol itself prevents this. Rather, we should look at holders. Bitcoin is fair in the sense that it does not have rich get richer built in. If I'm rich and own 1,000 BTC whilst some poor slum has 0.001 BTC, neither of us has an advantage within the protocol. The rich person does not get free extra coins just for owning lots, nor do they have any additional say anywhere within the protocol. With PoS, just having lots of money means you get free new money, as well as an extra say in the protocol itself. Further, you should speak of electricity consumption combined with the energy mix. Electricity consumption does not automatically translate into pollution.

pinkybanana 5y ago
I wouldn't say BTC is fair, but it is clearly fairer. With PoS coins, it is clear that minting new coins will heavily centralize for exchanges and big holders. With BTC, miners are clearly categorized as separate economic actor, where the skillset and capital needed to mint new coins is very different from let's say operating an exchange.
- fleddr 5y ago
  I have a feeling that there's far too much emphasis on mining from a wealth perspective. The vast majority of Bitcoin is owned by a few thousand whales combined with many millions of smaller holders. There seems to be this narrative where some people believe miners are minting and then holding all the coins, getting ever richer, but this is plain false. It would be true with PoS though, so agree.
viraptor 5y ago
> If I'm rich and own 1,000 BTC whilst some poor slum has 0.001 BTC, neither of us has an advantage within the protocol. Why would we care about "advantage within the protocol" while ignoring the whole world around it? A similar absurd description is: one person is holding $1B in their hands, another is holding $1 - neither has more say about the money nor any advantage within the system as long as they don't spend it. It's true, but not very meaningful - we do things with money we own.

kerkeslager 5y ago

1. Including sarcasm in your post didn't achieve anything except to increase the reader's blood pressure and make people like you less. Let's keep this polite, please. 2. You're right that the rich get richer with PoW as well, but I think we can agree that the connection between existing wealth and increasing wealth is stronger with PoS--PoS is almost literally just a statement of "the rich get richer". 3. The "it adds the necessity to cause unnecessary environmental pollution" argument is simply incorrect. Much of existing mining is already done with renewable energy--it's the most cost-effective way to mine anyway in most cases.

Slartie 5y ago
1. It helps get the point across just _how crazy_ this is. Sarcasm isn't only a tool to personally attack people - it's also a tool to verbally emphasize objectively valid arguments. 2. That's the beauty of it! We arrive at the same result, but just skip the part where people need to buy tons of custom silicon that can't do anything other than burn energy for mining, and then burn energy. That part has a lot of not-so-nice side effects on the real world out there, from silicon shortage to environmental pollution. 3. It is entirely correct. Even if some mining in some places is done with renewable energy (which is far from the majority - otherwise: please provide proof for your statement regarding just "how much" mining is renewable-based), that renewable energy is removed from the market and thus can't be used to power other consumers, which then must use fossil-fuel based energy sources. It's not like there's not enough demand for energy in the world, especially of the renewable kind.
- ballofrubber 5y ago
  The second point is objectively wrong. PoW needs participants to spend capital in order to keep the organization running, thus not the rich get richer, but the more efficient get richer. PoS participants have no sell pressure and no way of being "better" than their peers, which is why it is incredibly broken. In a PoW system you have fierce competition and the drive to the cheapest energy. Which today is stranded energy, that the market would never buy. It is hard to estimate what percentage is truly renewable. The biggest source of energy was hydroelectric. It is estimated that during rain season the renewable percentage is up to 70%. However even if you look at the lowest estimate of renewable energy (~25%) you get double the percentage of the best country. Bitcoin is the true solution to monetizing cheap energy production. It removes a large risk associated with investing in renewables as the network is a buyer of last resort. Thus you know that your energy always sees 100% usage (which is a big problem with grids today) Just a small thought experiment. Lets assume you want to build a charging station for EVs powered by your own solar farm at a somewhat remote location. 4 hours of the day you have a peak consumption of 100 units, the rest you only have 80 units consumption. Moving energy over large distances is incredibly expensive. Having a buyer for your energy (Bitcoin network) means that the investment carries a lot less risk.