4 ms·

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

by 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.
- fleddr 5y ago
  Because the protocol is software and only dictates rules inside its sphere of influence. It's a good rule that owning lots of coins does not automatically give you even more coins.
  - lisper 5y ago
    That rule does you no good if the net effect of the interplay of the rules with the rest of reality is that having more coins gives you more coins. This will be the case as long as coins can be used to purchase the means of production.
    - fleddr 5y ago
      Having more coins as in Bitcoin does not give you more Bitcoin, but you're obviously right it buys more non-Bitcoin goods and services. Bitcoin's premise is scarcity and software-enforced rules that are equal to all. It isn't going to "fairly" distribute existing capital, that should go without saying.
sktrdie 5y ago
But with 1,000 BTC you can get more coins from within the system by buying lots of rigs with those 1,000 coins & hence mine more coins. So PoS and PoW are quite similar in that regard. I think the problem with PoS is not "rich get richer" but the lack of fair redestribution. In PoW miners are economically forced to sell their mined coins to pay for energy bills. This redistribution is fair as it happens on the free market (exchanges). This doesn't really happen in PoS.
- fleddr 5y ago
  I wouldn't call that similar. Mining new Bitcoin is a very competitive, risky and intense business practice. Price swings greatly affect operations and there's always regulation around the corner. Whereas staking is more like bringing fiat to the bank and collecting interest for doing nothing at all. Still, you do have a point in the sense that if you're as wealthy as having 1,000 BTC, you have ample ways to further grow wealth. You could sell all BTC, go into real estate, take profit and buy back BTC cheaper. There's a million ways to grow your portfolio. It's just that Bitcoin doesn't give you more Bitcoin based on wealth. Most Bitcoin held is not held by miners.
deleted 5y ago
[deleted]
rytill 5y ago
That factor of “competitiveness” exists on Ethereum 2 as well. The more ether that is staked, the less the yield is from staking. If half of all ETH is staked, the APY will be below 2%, for instance. At a certain point bonds would overtake it.

by fleddr 5y ago

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.

fleddr 5y ago
Because the protocol is software and only dictates rules inside its sphere of influence. It's a good rule that owning lots of coins does not automatically give you even more coins.
- lisper 5y ago
  That rule does you no good if the net effect of the interplay of the rules with the rest of reality is that having more coins gives you more coins. This will be the case as long as coins can be used to purchase the means of production.
  - fleddr 5y ago
    Having more coins as in Bitcoin does not give you more Bitcoin, but you're obviously right it buys more non-Bitcoin goods and services. Bitcoin's premise is scarcity and software-enforced rules that are equal to all. It isn't going to "fairly" distribute existing capital, that should go without saying.

sktrdie 5y ago

But with 1,000 BTC you can get more coins from within the system by buying lots of rigs with those 1,000 coins & hence mine more coins. So PoS and PoW are quite similar in that regard. I think the problem with PoS is not "rich get richer" but the lack of fair redestribution. In PoW miners are economically forced to sell their mined coins to pay for energy bills. This redistribution is fair as it happens on the free market (exchanges). This doesn't really happen in PoS.

fleddr 5y ago
I wouldn't call that similar. Mining new Bitcoin is a very competitive, risky and intense business practice. Price swings greatly affect operations and there's always regulation around the corner. Whereas staking is more like bringing fiat to the bank and collecting interest for doing nothing at all. Still, you do have a point in the sense that if you're as wealthy as having 1,000 BTC, you have ample ways to further grow wealth. You could sell all BTC, go into real estate, take profit and buy back BTC cheaper. There's a million ways to grow your portfolio. It's just that Bitcoin doesn't give you more Bitcoin based on wealth. Most Bitcoin held is not held by miners.

deleted 5y ago

[deleted]

rytill 5y ago

That factor of “competitiveness” exists on Ethereum 2 as well. The more ether that is staked, the less the yield is from staking. If half of all ETH is staked, the APY will be below 2%, for instance. At a certain point bonds would overtake it.