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I understand that a lot of folks here are crypto skeptical. But regardless of your overall view, one thing to to understand about the Portman-Warner amendment i

I understand that a lot of folks here are crypto skeptical. But regardless of your overall view, one thing to to understand about the Portman-Warner amendment is that it exempts proof-of-work (PoW) miners but not proof-of-stake (PoS). When you hear about the environmental consequences of crypto, the massive amounts of electricity, the GPU shortages, that’s all PoW. PoS is designed to eliminate that and make crypto no more resource intensive than any other p2p network like BitTorrent. Regardless of your view on crypto, there’s no defensible justification for the Portman-Warner amendment. It’d be like passing a bill banning electric vehicles but not gasoline, or shutting down solar plants but not coal plants.

mule1 5y ago
Agreed but for a slightly different reason. PoW vs PoS is a much more nuanced debate for reasons other than the environmental impact talked about in mainstream circles. Bitcoin is PoW for many reasons, a fork of bitcoin could switch it to PoS and end the discussion, but its decentralized nature where one hash = one vote is part of the core of its economic policy. Ethereum and other PoS chains take trade off but advantages from utilizing PoS one that it desires to be a blockchain that can settle contracts on its layer 1. This Portman-Warner amendment favors PoW chains dissuading competition between the two.
- Taek 5y ago
  Portman-Warner is not just favoring PoW over PoS, it's favoring PoW over ALL alternatives. It completely shuts down all potential for new solutions to gain adoption in the United States. Even if you don't like PoS, you still shouldn't like the Portman-Warner amendment.
  - dcolkitt 5y ago
    Agreed. There are many subtle and complex trade offs that come between PoW, PoS, and alternative consensus mechanisms. But one thing I can say with confidence is that Rob Portman is in no way qualified to understand, let alone make those decisions.
    - alfiedotwtf 5y ago
      Then make the very first block PoW, which switches to PoS from there after. I'm sure the bill hasn't been written to take into account any duration and so is merely a binary question.
  - mule1 5y ago
    Agreed
sunshinerag 5y ago
Reading the bills, they are not banning anything. Just changing the reporting requirements. Doesn’t POS supporters want government oversight of the pseudo-decentralised actors required in POS?
- jacoblambda 5y ago
  Government oversight isn't required at all or even desired in most cases. Proof of Stake relies almost entirely on the internal game theory of the system and while external influence (such as some level of proof of authority via gov oversight or hybrid PoS/PoW) can be used as a crutch, they open the system up to a new set of vulnerabilities. Additionally, while the bills are "just" changing the reporting requirements, those new requirements are incredibly vague and whether read in a narrow or a wide sense they impose such a significant reporting requirement that it would be anywhere from very difficult for an individual on their own to legitimately impossible even with unlimited funding and manpower. The reporting requirements would effectively impose KYC reporting on any validator (including full nodes) or software developer involved in a cryptocurrency ecosystem for all users of the ecosystem. This effectively prevents US validators or SW devs from even participating in the ecosystem outside of creating a completely siloed "US only" cryptocurrency ecosystem. The originally proposed wording is bad, the Warner amendment is worse. The Wyden-Lummis-Toomey amendment is a reasonable compromise that provides some capacity for tax compliance oversight without burdening the entire ecosystem with reporting requirements that are mutually incompatible with 99% of networks.
  - rebelos 5y ago
    And here I thought all the value was in a decentralized blockchain that's immune from government interference. /s
    - throw123123123 5y ago
      This is not a problem for the network, its a problem for americans or residents in america that wish to perform this duty safe from state prosecution or punishment.
vitus 5y ago
I'm actually a little confused by the text. (source: https://twitter.com/jerrybrito/status/1423429377459736577 https://twitter.com/jerrybrito/status/1423429377459736577) The exclusion is for "validating distributed ledger transactions through proof of work (mining)" -- is that meant to cover validation by any full Bitcoin node (e.g. random person who wants full control over transactions involving a personal wallet), or adding new transactions to the ledger via mining? (I guess, this basically comes down to what's meant by "validating through proof of work" -- the actual PoW is provided by the miner, but other full nodes are needed to validate the actual transaction.) Because to me, either the validators are affected (thereby significantly impacting the overall robustness of the network, which I would hope reduces its trustworthiness and therefore the currency's value as a result, as well as the ability for individuals to control their own wallets), or miners are affected directly.
- Taek 5y ago
  The text is "validating... through proof of work (mining)", which would seem to imply that it only protects miners. It does seem though like the author's of the text are missing a super important distinction, which is that proof of work mining is _not_ intended to be the main method through which blockchain transactions are validated. The participants in the network are all expected to validate the transactions themselves (independent of the miners). A mistake like this really suggests that the proposed regulation is not well thought out, and that it should probably be revisited after further education and discussion. Worth saying a million times: the massive uproar in the crypto industry this week is not because we don't want to be regulated. It's because these proposed regulations are: + massively over-reaching + proposed at the last minute + attached to a must-pass bill + given very little room for proper discourse
  - SV_BubbleTime 5y ago
    > A mistake like this really suggests that the proposed regulation is not well thought out, and that it should probably be revisited after further education and discussion. What kind of sarcasm is most appropriate here? A coy shocked face or faux outrage?
  - 5y ago
nomoreplease 5y ago
Perhaps the PoW profiteers are lobbying against PoS?
- SV_BubbleTime 5y ago
  No politician wrote this themselves, so… yes probably.
SheinhardtWigCo 5y ago
It depends how "work" and "mining" are defined in this context. In PoS, as in PoW, security comes from computations done by network participants. For example, in Algorand, nodes generate a proof that they ran a lottery with the correct seed. That's still work, is it not? Does it matter that it's more efficient work than the work that is done to maintain the Bitcoin blockchain? Can someone formulate an argument as to why this should be excluded from the definition of "mining"? Without rigorous technical definitions, the result may just be that PoS networks adopt terminology like Efficient PoW and Efficient Mining.
loceng 5y ago
So is it regulatory capture, trying to squeeze out competition?

mule1 5y ago

Agreed but for a slightly different reason. PoW vs PoS is a much more nuanced debate for reasons other than the environmental impact talked about in mainstream circles. Bitcoin is PoW for many reasons, a fork of bitcoin could switch it to PoS and end the discussion, but its decentralized nature where one hash = one vote is part of the core of its economic policy. Ethereum and other PoS chains take trade off but advantages from utilizing PoS one that it desires to be a blockchain that can settle contracts on its layer 1. This Portman-Warner amendment favors PoW chains dissuading competition between the two.

Taek 5y ago
Portman-Warner is not just favoring PoW over PoS, it's favoring PoW over ALL alternatives. It completely shuts down all potential for new solutions to gain adoption in the United States. Even if you don't like PoS, you still shouldn't like the Portman-Warner amendment.
- dcolkitt 5y ago
  Agreed. There are many subtle and complex trade offs that come between PoW, PoS, and alternative consensus mechanisms. But one thing I can say with confidence is that Rob Portman is in no way qualified to understand, let alone make those decisions.
  - alfiedotwtf 5y ago
    Then make the very first block PoW, which switches to PoS from there after. I'm sure the bill hasn't been written to take into account any duration and so is merely a binary question.
- mule1 5y ago
  Agreed

sunshinerag 5y ago

Reading the bills, they are not banning anything. Just changing the reporting requirements. Doesn’t POS supporters want government oversight of the pseudo-decentralised actors required in POS?

jacoblambda 5y ago
Government oversight isn't required at all or even desired in most cases. Proof of Stake relies almost entirely on the internal game theory of the system and while external influence (such as some level of proof of authority via gov oversight or hybrid PoS/PoW) can be used as a crutch, they open the system up to a new set of vulnerabilities. Additionally, while the bills are "just" changing the reporting requirements, those new requirements are incredibly vague and whether read in a narrow or a wide sense they impose such a significant reporting requirement that it would be anywhere from very difficult for an individual on their own to legitimately impossible even with unlimited funding and manpower. The reporting requirements would effectively impose KYC reporting on any validator (including full nodes) or software developer involved in a cryptocurrency ecosystem for all users of the ecosystem. This effectively prevents US validators or SW devs from even participating in the ecosystem outside of creating a completely siloed "US only" cryptocurrency ecosystem. The originally proposed wording is bad, the Warner amendment is worse. The Wyden-Lummis-Toomey amendment is a reasonable compromise that provides some capacity for tax compliance oversight without burdening the entire ecosystem with reporting requirements that are mutually incompatible with 99% of networks.
- rebelos 5y ago
  And here I thought all the value was in a decentralized blockchain that's immune from government interference. /s
  - throw123123123 5y ago
    This is not a problem for the network, its a problem for americans or residents in america that wish to perform this duty safe from state prosecution or punishment.

vitus 5y ago

I'm actually a little confused by the text. (source: https://twitter.com/jerrybrito/status/1423429377459736577 https://twitter.com/jerrybrito/status/1423429377459736577) The exclusion is for "validating distributed ledger transactions through proof of work (mining)" -- is that meant to cover validation by any full Bitcoin node (e.g. random person who wants full control over transactions involving a personal wallet), or adding new transactions to the ledger via mining? (I guess, this basically comes down to what's meant by "validating through proof of work" -- the actual PoW is provided by the miner, but other full nodes are needed to validate the actual transaction.) Because to me, either the validators are affected (thereby significantly impacting the overall robustness of the network, which I would hope reduces its trustworthiness and therefore the currency's value as a result, as well as the ability for individuals to control their own wallets), or miners are affected directly.

Taek 5y ago
The text is "validating... through proof of work (mining)", which would seem to imply that it only protects miners. It does seem though like the author's of the text are missing a super important distinction, which is that proof of work mining is _not_ intended to be the main method through which blockchain transactions are validated. The participants in the network are all expected to validate the transactions themselves (independent of the miners). A mistake like this really suggests that the proposed regulation is not well thought out, and that it should probably be revisited after further education and discussion. Worth saying a million times: the massive uproar in the crypto industry this week is not because we don't want to be regulated. It's because these proposed regulations are: + massively over-reaching + proposed at the last minute + attached to a must-pass bill + given very little room for proper discourse
- SV_BubbleTime 5y ago
  > A mistake like this really suggests that the proposed regulation is not well thought out, and that it should probably be revisited after further education and discussion. What kind of sarcasm is most appropriate here? A coy shocked face or faux outrage?
- 5y ago

nomoreplease 5y ago

Perhaps the PoW profiteers are lobbying against PoS?

SV_BubbleTime 5y ago
No politician wrote this themselves, so… yes probably.

SheinhardtWigCo 5y ago

It depends how "work" and "mining" are defined in this context. In PoS, as in PoW, security comes from computations done by network participants. For example, in Algorand, nodes generate a proof that they ran a lottery with the correct seed. That's still work, is it not? Does it matter that it's more efficient work than the work that is done to maintain the Bitcoin blockchain? Can someone formulate an argument as to why this should be excluded from the definition of "mining"? Without rigorous technical definitions, the result may just be that PoS networks adopt terminology like Efficient PoW and Efficient Mining.

loceng 5y ago

So is it regulatory capture, trying to squeeze out competition?