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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 mo
by 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 agoYou 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 agoThat 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.