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Can someone explain to me how PoS is not centralized? The whole point of crypto and the blockchain is decentralization, no? I feel like crypto/blockchain will e
by DaftDank 5y ago
Can someone explain to me how PoS is not centralized? The whole point of crypto and the blockchain is decentralization, no? I feel like crypto/blockchain will end up looking nothing like how it was intended, and be regulated to the point that it's just the next iteration of the traditional banking system, where the current power holders continue holding the power. Maybe I was naive to ever think it would be any different.
- jl2718 5y agoThe first stocks ever sold to the public were claims on land in a new world, an escape from servitude to kings. Turns out they were just being swindled by a bankrupt crown to keep their own oppressors in power. But there was a new world, and people did escape.
- MuirsGhost 5y agoPeople don't escape, they toil for a new master, on new ground. From sea to shining sea, the new world's plundered resources eventually turned into Bitcoin.
- CryptoPunk 5y agoVery melodramatic, but inaccurate. The American portion of the New World offered significantly higher hourly wages for unskilled labor than the industrial heartland of Europe, by the late 1800s. And these wages grew at record rates all through the latter decades of the 1800s, in the midst of the largest influx of penniless workers in US history (causing the foreign born portion of the US population to reach 15% by 1890). That wages grew as fast as they did, with such a massive increase in the supply side of the supply and demand equation for labor, is testament to the opportunities that the principal nation of the New World was generating.
- mftb 5y agoBoth you're points and the gp's are good, but yours aren't refuting his, only pointing out that the master grew more generous. What's worth refuting in gp's post is the notion that humanity is "plundering" nature. Humanity is nature, that's what there's no escaping, unless you believe in the supernature. I really don't think PoS or PoW are going to change what you guys are talking about.
- arberx 5y agoDistribution has had 4-5 years to distribute with PoW (ETH specifically). Moving to PoS now makes sense. All these points for/against PoS/PoW are technicalities at this point given that "decentralization" is a spectrum.
- AlexandrB 5y agoIn practice PoW is pretty centralized also. Most of the mining is done by those who have the capital to set up massive ASIC/GPU farms.
- cody8295 5y agoThere are coins like Monero that are ASIC-resistant and can only be mined with CPU, not GPU.
- WJW 5y agoCan you explain how this does not benefit people who have the capital to set up massive CPU farms, with all the advantages of scale that that implies? After all, you can get discounts on both power and CPUs if you buy in bulk so anyone who starts off with enough capital will only get further ahead.
- sudosysgen 5y agoIncorrect. Monero can be mined using GPUs, and that is the dominant way it is mined. Source : Mined Monero on an R9 290X until a few months ago.
- selsta 5y agoMonero's PoW algorithm is RandomX [1], which is optimized for CPU mining. While it is possible to mine with GPUs, it is significantly slower and unprofitable. [1] https://github.com/tevador/RandomX/blob/master/doc/design.md https://github.com/tevador/RandomX/blob/master/doc/design.md
- boring_twenties 5y agoIf by "a few months ago" you mean prior to November 2019, then sure. Since then the PoW is RandomX which heavily favors CPUs. I'm 99% sure there is no GPU in existence that can profitably mine Monero since then, assuming your electricity isn't free.
- DennisP 5y agoEthereum's PoS supports up to a million or so independent full-fledged stakers. That seems fairly decentralized to me.
- sigmar 5y agoWhat does it matter what the technology supports if it incentivizes the community to consolidate? Penalties for being offline and slashing (for misconfigured nodes) are a massive incentive for nodes to centralize
- pa7x1 5y agoOn the contrary, penalties are higher the more nodes go out at the same time. If you centralize you expose yourself to higher penalties if something goes awry. The incentives of the system are designed to prevent centralization.
- sigmar 5y agoSo if a large state like Texas loses power for days/weeks all validators inside it suffers more? Why shouldn't I give my keys to a business that can operate multi-location operations? Would save me huge headaches in terms of keeping my node maintained...
- pa7x1 5y agoThe stakers of even an entire state like Texas represent a rather small percentage of all ETH stakers. So the extra punishment is rather small. It will likely be much bigger if you use Coinbase/Kraken/... or any other centralized staking service and it goes down (including any possible failovers that they have set in place). I don't have the specific numbers in front of me but you should think of the extra penalties for centralization to scale with the risk of the network not being able to function properly, so of the order of 30-40% validators going down for them to kick in hard. Also, staking redundancy/failover is hard to do. You never want to have two nodes validating with the same keys, the punishment in case there are two validators with the same keys at the same time are very harsh. While not being up, is barely above the cost of opportunity of the reward that you could have gotten. Roughly speaking: Your node goes down: roughly cost of opportunity (you don't get what you could have gotten if online) You and your neighbors, city, state going down: Roughly above of cost of opportunity Centralized service validating for a large percentage of the network going down: Above cost of opportunity penalties. Double-validation: Risk total loss of capital.
- exo762 5y agoCapital is capital, be it in the form of money or hardware. Putting the onus on capital in a form of hardware is just making it harder for smaller guys. I can throw 32 ETH into staking. It's way beyond my capability to mine - wrong geography, electricity prices, accommodation situation etc.
- jlokier 5y agoJust a reminder that smaller guys don't have 32 ETH to spare. That's $88,603 USD. Not much for the levels.fyi crowd, but a fortune to most people. Which means, whether you can stake is very dependent on your personal situation - especially geography - much like whether you can profitably mine. Of course staking is still better than mining for many reasons. But it's a somewhat rich person's game.
- alimbada 5y agoStaking will still be accessible to those with less than 32 ETH via pooled staking, e.g. Rocket Pool: https://www.rocketpool.net/ https://www.rocketpool.net/
- deleted 5y ago[deleted]
- casi 5y agoYou can join a staking pool with as little as you have. Just like joining a mining pool with your laptop. And you can get eth with gasless minting of nfts. Draw a picture and sell it. Don’t have to spend any money. I much prefer this to burning up electricity which basically hands the network to energy suppliers and asic manufacturers.
- dyndos 5y agoThe key distinction is that PoW is permissionless, whereas PoS is permissioned. Bitcoin is secured by hashpower, which is produced by physical capital outside the network. Nobody needs to ask for permission to start hashing and trade kilowatts for sats. PoS networks are secured by on-chain assets. This means you can't "mine" it without first buying tokens from someone who already owns them. You need permission from an existing player in order to start participating. Another aspect of this is 51% attacks are recoverable for PoW, but are a permanent takeover condition for PoS networks. If a single entity ever accumulates more than half the tokens on a PoS network, they are unassailable.
- dogman144 5y agoYa I wonder if we’ll start seeing attempts to corner the market in PoS.
- krobbn 5y agoComputing power is just a proxy for capital/resources. Why not be more efficient and use the capital directly and save power in the meanwhile. Current market cap of ETH is ~$324B, thus getting 50.1% of ETH would require $162.3B in capital. However, as soon as you start acquiring ETH the price will increase, especially at those large volumes. It would be insanely hard to come up with enough resources to buy enough ETH in a POS world to take over the network. Never mind the fact that as soon as it's become evident you've taken over the network the value of the network is essentially worthless and you've just destroyed billions of dollars worth of capital in the process.
- majormajor 5y agoI wonder if a state actor could pull it off more cheaply. Start buying large amounts while letting it leak that you're going to take over the network. See if enough people will panic-sell on the leak to drop the price of your takeover. It's kinda like taking over a condo building on a much larger scale: the people you buy out first can charge a premium; by the end, you set the terms.
- bgroat 5y agoThe answer is that it isn't, and none of these systems ever were. They're distributed, not decentralized. And this distinction, and the refusal to acknowledge it is what put me off crypto entirely.
- neatze 5y agoSame here, market(s) over time will be cornered without control policies that counter monopoly.
- tastyfreeze 5y agoThis is why I think XRP will ultimately be a winner. No mining, no staking, just validating transactions.
- deleted 5y ago[deleted]
- elliekelly 5y agoIs there a law of the internet describing the phenomenon whereby any comment criticising cryptocurrency will promptly elicit a response comment proffering a cryptocurrency that's somehow different and "not like those other cryptos"?
- OnlineGladiator 5y agoIf not, you should name it yourself. The Ellie Kelly effect - whereby any mention of a flaw in a cryptocurrency is met with a rebuttal of the one true cryptocurrency, usually obscure and with little traction.
- bliteben 5y agoIf only the transaction confirmations were as fast as these responses usually are.
- newobj 5y agofor proofs of "whatever", where whatever is something that can be accrued with money, then it's proof of money, and money is centralized, or at least reallllllly spikily concentrated, so, yeah
- pkulak 5y agoBecause anyone in the world can participate in validation. It may be costly to do so, or whatever other hoops, but there's no "central" authority managing participation.
- pa7x1 5y agoHow is it more centralized than PoW? I see multiple factors that hamper decentralization: - Fixed costs that act as barrier of entry - Economies of scale that lead to centralization - Geographic factors (operation costs being different in different parts of the world, regulation/taxation, supply chain...) This is how I see each factor playing out in both scenarios: - Fixed costs: PoS runs on consumer-grade hardware, while PoW requires specific HW (ASICs or high-grade GPUs). PoS requires a minimum amount of stake but there are pooling solutions, which effectively make this minimum non existent. All in all PoS is at advantage here, unless you want to insist on solo staking in which case PoW is at advantage. Analogy: This would be equivalent to flat fees to open a savings account or a minimum amount balance required to open it. - Economies of scale: In PoS they are almost non-existent. You don't stake more efficiently by having a more powerful machine. You just get to reuse the same HW for more nodes but since fixed costs are low this has a very small impact. In PoW there are economies of scale, though, better/more expensive ASICs can mine more efficiently than smaller/cheaper ones. Same with GPUs. Someone with more initial capital can get ahead faster in PoW, while in PoS earns at a same rate as everyone else. Analogy: This would be equivalent to the interest rate you get in your savings account being dependent on how much money you have. In PoW, the richer you are the higher interest rate you get from your bank, in PoS everyone gets the same. - Geographic factors: Cheap access to energy has a large impact on PoW as it dictates most of your OpEx. In PoS this is largely irrelevant (PoS is 99.95% more energy efficient than PoW). Taxation/regulation would need its own analysis but I imagine is equally spread across both alternatives. Supply chain is again in favor of PoS as it can run on general-purpose HW, while ASICs are heavily centralized around a single manufacturer. Analogy: This would be equivalent to different geographic locations resulting in different conditions for maintaining open your bank account or taxing your accrued interest.
- ypeterholmes 5y agoThis is exactly right. Too many folks assume PoW is more decentralized because it's not tied to money, but what's the difference if mining requires money? As you note, PoS lowers the barrier to entry and actually creates a more egalitarian system, despite with Bitcoin maximalists think.
- Karrot_Kream 5y agoLondon does not bring PoS. The switch to PoS will be happening in a later hard fork.
- seanhunter 5y agoPoS should be less centralized than PoW as I understand it. At least in Ethereum if you stake your 32 ETH then you get transactions to validate assigned to you randomly. You don't need a purpose-built rig with a ton of hash power to compete so smaller players are incentivized to participate, leading to a far greater incentive to run a node.
- fouric 5y ago> You don't need a purpose-built rig with a ton of hash power to compete But you do need ETH in the first place, and the more the better. This seems like it still disincentivizes smaller players.
- jl2718 5y agoDifferent strategies. ETH PoS is about distributing a consensus state. Bitcoin PoW is about hardening a deterministic state.
- boring_twenties 5y agoYeah but 32 ETH costs $90,000. A lot more than a minimally profitable mining rig.
- theknocker 5y agoBy changing the definition of centralized and fuding about energy costs.
- georgeecollins 5y agoI really recommend listening to Vlad Zamfir, who has interesting things to say about crypto in general: https://www.bloomberg.com/news/articles/2021-07-15/vlad-zamfir-on-the-dangers-of-unstoppable-software-and-what-people-get-wrong-about-blockchains?srnd=oddlots-podcast https://www.bloomberg.com/news/articles/2021-07-15/vlad-zamf... This is not a rant for or against Bitcoin or Etherium. It's more to point out the persuasive and idealistic rhetoric of crypto gets confused with what may happen in the real world as people work on use cases.
- littlestymaar 5y agoPoS is decentralized as soon as you have a big number of stakers. The hard thing being “how do you know that there are in fact a big number of people and not just a bunch of guys hidden behind a huge number of aliases” (the Sybil attack problem) and this is for this exact problem that proof of work helps (contrary to popular belief, Proof of work has nothing to do with double spending). For this reason you cannot build a trust-less distributed network with proof of stake alone: you'll need some kind of proof of waste to bootstrap it.
- Tepix 5y agoRight, for example Avalanche now has more than 1000 validators which is the most that i've seen for a PoS blockchain.
- lorenzq 5y agoThere are >1000 Algorand validators[1] and >2000 Cardano validators[2] [1] https://metrics.algorand.org/ https://metrics.algorand.org/ [2] https://pooltool.io/ https://pooltool.io/