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With PoW, you do nothing except maintain your mining hardware and burn electricity. With PoS, you do nothing except maintain your staking hardware and burn the

by shawnz 5y ago

With PoW, you do nothing except maintain your mining hardware and burn electricity. With PoS, you do nothing except maintain your staking hardware and burn the time value of the money you are staking. From that perspective there is no difference. The difference is that with PoW, the richest participants can afford the most efficient hardware, giving them a super-linear advantage. In PoS, it's still true that the "rich get richer", but only at a linear rate, since there is no way to improve the efficiency of staking (which is basically the best you could ask for).

username90 5y ago
Mining coins is a risky business, you can very easily lose money there. Proof of stake isn't, you have codified it into the inner workings of the coin that the rich gets richer. Not through interest or banking or investment returns, its just the fundamental law that the rich get richer. That is a significant difference. It is like, imagine if USA had written in the constitution that the rich should get richer? Would you defend that move by saying "Well, the rich gets better investments anyway so this wont make a difference!".
- shawnz 5y ago
  You can lose money staking too, in exactly the same way. The staking reward needs to be greater than the return of whatever else you could have invested your money in instead. If the staking reward ends up being lower, then you are effectively losing money. Just like how when mining in a PoW coin, you are effectively losing money if the coin reward becomes less than the electricity cost. It's no different from that perspective. It is a "fundamental law" in both PoW and PoS that you get rewarded for doing the work/staking. I don't really understand your point about the US constitution -- what I am saying is that PoS systems minimize the effect of the "rich getting richer" as much as possible by forcing it to be at most a linear effect. Whereas there is no need to include such language in the US constitution at all.
  - fleddr 5y ago
    You have a very odd grasp of reality. If I invest in Bitcoin and its price increased by 10%, I did not lose money if it turned out that real estate would have gained by 20%. I still gained 10%. Actually, only if I sold it. That's not "losing money", it's not maximizing returns. Further, you're still missing the double effect of staking. With staking your portfolio value will depend on the price of the token, yet since you staked it (it's locked up), it's a paper win/loss. Further, regardless of that, you get NEW coins for free. Further, it's not linear at all. It's whatever the token does, which can be linear, parabolic, anything.
    - shawnz 5y ago
      That aspect is the same as PoW. PoW rewards also depend on what the value of the coin does. You are right that you wouldn't normally consider alternate investments like that. But with PoS, where the only cost is the time value of the money staked, it is the only thing to compare.
fleddr 5y ago
Are you serious? You equate running a complicated, deeply competitive business with highly variable yields (can even be negative) with just parking money, and call both "doing nothing"? If you reason like that, I suppose in your world fireworks is the same thing as a rocket bringing us to Mars? Is running Amazon and making a profit the same thing as just milking interest from a bank account? These differences aren't trivial, they are massive. In a PoW world, most rich people don't mine, they just hold the crypto. In a PoS world, said rich people auto-mine by just holding crypto.
- shawnz 5y ago
  > You equate running a complicated, deeply competitive business with highly variable yields (can even be negative) with just parking money, and call both "doing nothing"? No, what I am really saying is that PoW mining and PoS staking aren't so dramatically different in complexity like you are saying. They are actually both complicated businesses with variable yields. The only difference is that with PoW, the benchmark is electricity cost, whereas with PoS the benchmark is the other investments which you could have invested your staking money into.
  - m3kw9 5y ago
    Staking takes a few clicks, mining require physical setup, maintenance, rent, buy, to me that’s orders of magnitude more steps than staking.
    - shawnz 5y ago
      Staking requires all those things too. Or you could pay a service to do it for you, but that applies to PoW mining as well.
      - atweiden 5y ago
        Nothing against staking, but you and many other posters ITT are creating a blatant false equivalence between button-clicking and datacenter-construction. It’s not beyond the pale quite yet — we’ve all seen far worse from cryptocurrency promoters over the years — but you’re leaving open minded third parties little choice but to interject. When’s the last time a billion dollar staking operation had to build multiple mining datacenters and fill them with hundreds of millions of dollars worth of hardware? That’s just not required for staking. It just isn’t. They’re not equivalent operations. Not in any way. Not by any stretch of the imagination.

by shawnz 5y ago

username90 5y ago

Mining coins is a risky business, you can very easily lose money there. Proof of stake isn't, you have codified it into the inner workings of the coin that the rich gets richer. Not through interest or banking or investment returns, its just the fundamental law that the rich get richer. That is a significant difference. It is like, imagine if USA had written in the constitution that the rich should get richer? Would you defend that move by saying "Well, the rich gets better investments anyway so this wont make a difference!".

shawnz 5y ago
You can lose money staking too, in exactly the same way. The staking reward needs to be greater than the return of whatever else you could have invested your money in instead. If the staking reward ends up being lower, then you are effectively losing money. Just like how when mining in a PoW coin, you are effectively losing money if the coin reward becomes less than the electricity cost. It's no different from that perspective. It is a "fundamental law" in both PoW and PoS that you get rewarded for doing the work/staking. I don't really understand your point about the US constitution -- what I am saying is that PoS systems minimize the effect of the "rich getting richer" as much as possible by forcing it to be at most a linear effect. Whereas there is no need to include such language in the US constitution at all.
- fleddr 5y ago
  You have a very odd grasp of reality. If I invest in Bitcoin and its price increased by 10%, I did not lose money if it turned out that real estate would have gained by 20%. I still gained 10%. Actually, only if I sold it. That's not "losing money", it's not maximizing returns. Further, you're still missing the double effect of staking. With staking your portfolio value will depend on the price of the token, yet since you staked it (it's locked up), it's a paper win/loss. Further, regardless of that, you get NEW coins for free. Further, it's not linear at all. It's whatever the token does, which can be linear, parabolic, anything.
  - shawnz 5y ago
    That aspect is the same as PoW. PoW rewards also depend on what the value of the coin does. You are right that you wouldn't normally consider alternate investments like that. But with PoS, where the only cost is the time value of the money staked, it is the only thing to compare.

fleddr 5y ago

Are you serious? You equate running a complicated, deeply competitive business with highly variable yields (can even be negative) with just parking money, and call both "doing nothing"? If you reason like that, I suppose in your world fireworks is the same thing as a rocket bringing us to Mars? Is running Amazon and making a profit the same thing as just milking interest from a bank account? These differences aren't trivial, they are massive. In a PoW world, most rich people don't mine, they just hold the crypto. In a PoS world, said rich people auto-mine by just holding crypto.

shawnz 5y ago
> You equate running a complicated, deeply competitive business with highly variable yields (can even be negative) with just parking money, and call both "doing nothing"? No, what I am really saying is that PoW mining and PoS staking aren't so dramatically different in complexity like you are saying. They are actually both complicated businesses with variable yields. The only difference is that with PoW, the benchmark is electricity cost, whereas with PoS the benchmark is the other investments which you could have invested your staking money into.
- m3kw9 5y ago
  Staking takes a few clicks, mining require physical setup, maintenance, rent, buy, to me that’s orders of magnitude more steps than staking.
  - shawnz 5y ago
    Staking requires all those things too. Or you could pay a service to do it for you, but that applies to PoW mining as well.
    - atweiden 5y ago
      Nothing against staking, but you and many other posters ITT are creating a blatant false equivalence between button-clicking and datacenter-construction. It’s not beyond the pale quite yet — we’ve all seen far worse from cryptocurrency promoters over the years — but you’re leaving open minded third parties little choice but to interject. When’s the last time a billion dollar staking operation had to build multiple mining datacenters and fill them with hundreds of millions of dollars worth of hardware? That’s just not required for staking. It just isn’t. They’re not equivalent operations. Not in any way. Not by any stretch of the imagination.