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PoW empirically isn't secure. Attacks already happened, most notably on ethereum classic. If it was possible to rent enough hashpower all PoW blockchains would

PoW empirically isn't secure. Attacks already happened, most notably on ethereum classic. If it was possible to rent enough hashpower all PoW blockchains would already be attacked because daily mining rewards are trivial compared to potential gains. The actual security relies on obfuscated proof of stake - how hard it is to attain enough mining hardware. Even so, attacking bitcoin is relatively cheap - even starting from zero, few billions are enough to order mining chips from a fab and organize mining warehouses with enough power to 51% the network. The reason it didn't happen is because there's not enough genuine economic activity on btc to profit from it - the worst you could do is try to steal other crypto from several exchanges, but given that they all require kyc today and the impossibility of hiding such a big operation, it's extremely unlikely to turn out profitable. If btc ever becomes widely used - for example, by Iran to sell their oil, to the point that freezing their btc bankrupts the country - attacking btc may become a military objective, and given the cost involved it would be trivial for the US military. They could leverage all Western owned mining facilities trivially, by telling them to enforce OFAC sanctions - chances are they wouldn't even have to build any mining facilities themselves. Another way to summarize this is: PoW only works for bitcoin as long as it remains a speculative toy. Such an attack is impossible in PoS, because unlike mining chips, acquiring enough staking tokens is simply impossible for sufficiently distributed coins - there isn't enough for sale and most owners are anonymous, making sanctions unenforceable. For this reason PoS is the only existing consensus system that can actually support something widely used for real world commerce.

runeks 5y ago
> Such an attack is impossible in PoS, because unlike mining chips, acquiring enough staking tokens is simply impossible for sufficiently distributed coins - there isn't enough for sale and most owners are anonymous, making sanctions unenforceable. This is only true in the absence of software bugs. In the presence of buggy node software, a worm can spread through the network, compromising all the private staking keys. In this way the whole network can be subverted by gaining access to secret information (private keys). This attack is not possible with PoW.
- jude- 5y ago
  You don't even need that. A buggy DeFi contract will happily give an attacker all its ETH.
mattwilsonn888 5y ago
You are myopic in your comparison. "Most of the stake isn't for sale." Well if we are fantasizing about huge pools of capital shelling out the money necessary to get enough mining equipment for a majority hash rate, there is no reason the same pool of capital can't purchase stake at a premium. Do you think every holder is going avoid selling out to a high premium due to loyalty for the underlying protocl? No, especially when selling means they are no longer exposed to the risk they create by doing so; rational actors will sell to the highest bidder, who may be anonymous. It's exactly the same issue. Further more you're quip about Bitcoin being unable to scale its security past use as a speculation asset, which as I point out above applies to any PoS asset (perhaps even more so), is also context deficient. Bitcoin's value will increase when mining is more decentralized (which is heuristically determinable enough to take the risk), which will increase mining decentralization. Many large mining setups today could have 51% attacked Bitcoin through most of its history, but they weren't around then. Bitcoin's mining grows just as the price grows, when people are willing to believe in its market value.
- nootropicat 5y ago
  >Well if we are fantasizing about huge pools of capital shelling out the money necessary to get enough mining equipment for a majority hash rate, there is no reason the same pool of capital can't purchase stake at a premium There simply isn't enough for sale. Premium - premium to what? Try to buy 10M eth after mining is gone and price is going to increase several times. Staked amount is constantly increasing and eventually I expect most of eth's supply to be staked. Even if an attacker somehow acquires enough stake, everyone else can simply fork them out. That's not really possible in PoW - a fork from an asic PoW to a gpu PoW is possible, but it would start with negligible security, and most likely the attacker would secure enough gpus before the (asic) attack to kill the fork. Nothing can be done after a gpu/cpu PoW chain is controlled by a censoring attacker. >rational actors will sell to the highest bidder, who may be anonymous Unlike bitcoin, staked eth generates yield, so the principal doesn't have to be sold - ever. >Bitcoin's value will increase when mining is more decentralized (which is heuristically determinable enough to take the risk), which will increase mining decentralization. Not sure what was the intention of this sentence - that as bitcoin goes up, mining decentralizes? In any case, mining has infinite economies of scale so it always centralizes. The recent China ban accelerated the process, most likely in the much more dangerous direction - with majority of mining to be done in America or under American control. So far, only America sanctioned crypto addresses, and there are already some American miners that explicitly enforce them.

runeks 5y ago

> Such an attack is impossible in PoS, because unlike mining chips, acquiring enough staking tokens is simply impossible for sufficiently distributed coins - there isn't enough for sale and most owners are anonymous, making sanctions unenforceable. This is only true in the absence of software bugs. In the presence of buggy node software, a worm can spread through the network, compromising all the private staking keys. In this way the whole network can be subverted by gaining access to secret information (private keys). This attack is not possible with PoW.

jude- 5y ago
You don't even need that. A buggy DeFi contract will happily give an attacker all its ETH.

mattwilsonn888 5y ago

You are myopic in your comparison. "Most of the stake isn't for sale." Well if we are fantasizing about huge pools of capital shelling out the money necessary to get enough mining equipment for a majority hash rate, there is no reason the same pool of capital can't purchase stake at a premium. Do you think every holder is going avoid selling out to a high premium due to loyalty for the underlying protocl? No, especially when selling means they are no longer exposed to the risk they create by doing so; rational actors will sell to the highest bidder, who may be anonymous. It's exactly the same issue. Further more you're quip about Bitcoin being unable to scale its security past use as a speculation asset, which as I point out above applies to any PoS asset (perhaps even more so), is also context deficient. Bitcoin's value will increase when mining is more decentralized (which is heuristically determinable enough to take the risk), which will increase mining decentralization. Many large mining setups today could have 51% attacked Bitcoin through most of its history, but they weren't around then. Bitcoin's mining grows just as the price grows, when people are willing to believe in its market value.

nootropicat 5y ago
>Well if we are fantasizing about huge pools of capital shelling out the money necessary to get enough mining equipment for a majority hash rate, there is no reason the same pool of capital can't purchase stake at a premium There simply isn't enough for sale. Premium - premium to what? Try to buy 10M eth after mining is gone and price is going to increase several times. Staked amount is constantly increasing and eventually I expect most of eth's supply to be staked. Even if an attacker somehow acquires enough stake, everyone else can simply fork them out. That's not really possible in PoW - a fork from an asic PoW to a gpu PoW is possible, but it would start with negligible security, and most likely the attacker would secure enough gpus before the (asic) attack to kill the fork. Nothing can be done after a gpu/cpu PoW chain is controlled by a censoring attacker. >rational actors will sell to the highest bidder, who may be anonymous Unlike bitcoin, staked eth generates yield, so the principal doesn't have to be sold - ever. >Bitcoin's value will increase when mining is more decentralized (which is heuristically determinable enough to take the risk), which will increase mining decentralization. Not sure what was the intention of this sentence - that as bitcoin goes up, mining decentralizes? In any case, mining has infinite economies of scale so it always centralizes. The recent China ban accelerated the process, most likely in the much more dangerous direction - with majority of mining to be done in America or under American control. So far, only America sanctioned crypto addresses, and there are already some American miners that explicitly enforce them.