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PoS is Plutocracy on Steroids. You've outlined only one, the most obvious and least probable, mode of failure. The more subtle and wildly prevalent failure mo

PoS is Plutocracy on Steroids. You've outlined only one, the most obvious and least probable, mode of failure. The more subtle and wildly prevalent failure mode is that the consensus will be set by the few whales, who will maximize their rent extraction at the expense of numerous small players, which will include most later adopters, aka the entire population of Earth. It's already visible on smaller scale in DAOs, every vote resembles a banana republic: "90% voted, 90% in favour". No matter what smaller stakeholders do/say, the early big investors and dev team always win. Why would they structure it otherwise? The same dynamics exist in PoS, just not as grotesque. Perhaps that's OK for a private company governance, but for a global currency? You want the multibillionaires to dictate the properties of the medium of exchange that serves the entire globe? Seems rather strange that so many have such a burning desire to be governed by someone much richer than them.

turbinerneiter 5y ago
How is that different from PoW or our current political system?
- inter_netuser 5y ago
  miners go bankrupt in PoW for misbehaving. Large stakers can be rewarded for misbehaving, at your expense.
  - jack_pp 5y ago
    They only go bankrupt if they don't hold the majority of the mining power, if they do they take over. How is this different from PoS? Actually in PoS if you try to attack and you don't have a majority you will lose all your coins. in PoW if you try to attack and somehow you miscalculated you will lose a couple of hours worth of electricity after which you can go back to mining normally so much lower stakes for an attack.
- viro 5y ago
  Because money can't literally buy votes. no matter how many ads you show me I would never vote for Trump.
TheMagicHorsey 5y ago
That’s absurd. People will opt out of currency regimes that are abusive. This is not like a terrestrial government where you are fucked for life because a bureaucracy controls the land you live on. You don’t have to immigrate to escape a corrupt currency. And you don’t have to all-in in one currency. If you own dozens of coins, you liquidate the shitcoin that is controlled by corrupt tycoons.
roenxi 5y ago
> Why would they structure it otherwise? It gets a lot more complicated than that because setting up competing systems is cheap. It is like saying "nobody would write this piece of software for free". What we learned with open source is if the cost of distribution gets low enough then there needs to be just one person somewhere on earth willing to maintain it and it can work. If the cost of creating trustworthy local (or international) monetary systems is basically 0 then it isn't obvious that plutocrats have an advantage beyond the one they already have by virtue of being powerful. If they can force you to use their system they already control the government so didn't need any technical help.
- inter_netuser 5y ago
  You can't fork gigawatt powerplants and silicon foundries by clicking a button on Github. You can't even fork a stablecoin. in case of a split in a PoS chain, the correct fork will be decided for you by USDC and Coinbase.
  - cinquemb 5y ago
    You can fork decentralized over (crypto) collateralized stablecoins even if you can't force a fork of a centralized stablecoin operated by incorporated entity to be recognized by them. Unless we're going to pretend that there is only one way on and off networks and only in one currency denomination…
    - inter_netuser 5y ago
      how do I send a wire to DAI?
      - cinquemb 5y ago
        Just because you may not be willing to swap cash/gold/anything a local counter party values in whatever jurisdiction you reside in for a random networks gas and/or tokens that trade on them, doesn't mean others cannot. If you want to use coinbase to buy crypto and tokens, that's on you.
eftychis 5y ago
And Proof of Work is better because the haves buy equipment the have-nots can't buy to vote? Unless you have a citizenship based voting of some short where a single person gets a single vote and they actually vote (automatically I guess and assuming without delegating to the big whale because "I am bored") what do you think agreement via resource scarcity implies? P.S. Also lobbying...
- inter_netuser 5y ago
  This is a common misunderstanding. Proof of Work does not get you any votes at all. PoW is a service to the network, to create an immutable ledger. It comes with a very real nuclear option that will bankrupt miners if you misbehave and get fired by hashing algo change. It's just a boring industrial business, like smelting aluminum or iron.
  - mission_failed 5y ago
    Smelting metals actually produces something, proof of work just burns electricity for the random chance of winning a lottery
    - rmbyrro 5y ago
      PoW produces something intangible. You're probably basing on an assumption that tangible products are more worthy or justifiable of resources consumed than intangibles. If you work with software development - which you probably do - I'd suggest checking what you do for a living, how much energy it consumes and how much physical product it generates.
      - DarylZero 5y ago
        It produces just what the person said. A lottery win.
      - DemocracyFTW 5y ago
        That argument could even be somehow valid if it were only possible to demonstrate that these intangibles improve life for people, like contributing to food, housing, education or even only entertainment. They do not. We do not have to care for those who are affluent enough to burn electricity just in order to gamble. Those people have the resources to gamble in less harmful ways without raising electricity prices and polluting the air the way they do. Those people could even do something helpful and productive if they chose to. Cryptomining is wasting energy for the sake of wasting energy. You may argue we (the 99.999% who do not cryptomine) are too stupid to see the value of your imaginary intangibles but that's not true. We are the ones who want no part in a pyramid scheme, who do not want to succumb to gambling, and whose time and money are too scarce and too precious to be put on the line. Sure, all activity has its price, its waste, and sure, there are other occupations whose overall usefulness is doubtful and askew with the accompanying resource consumption. Doesn't mean you have too excuse bad behavior just because there are other guys doing no good. Just as an aside, when you move a newspaper or a magazine from print to only existing as a web page, you certainly have 'dematerialized' it to a degree. However you still need hardware to keep and display the data and energy to move it around and light up the screens. In so far it does not stop being physical. The 'intangible' is somewhat of a red herring. Yes, it is less haptic, but it's still physics, physical all the way down. Other than that, currencies, freedom, equality, education, entertainment—we've been having intangibles all the time, at least from the dawn of human culture onward. Cryptomining does not bring anything genuinely new to the table in this respect. It's not even new in being a fraudulent, volatile scheme that betrays traits of a cult, one that benefits a few and hurts the many.
bouncycastle 5y ago
PoS in Ethereum is not a plutocracy...There is no voting with the token or any other governance. The stakers do not control the network, by design. The whole system works only if everybody (holders/users/stakere/devs) cooperate together.
- inter_netuser 5y ago
  Only some, it seems, are more equal than others. https://twitter.com/vitalikbuterin/status/760232885483806720 https://twitter.com/vitalikbuterin/status/760232885483806720
  - bouncycastle 5y ago
    I'm not sure what you are linking to. This looks like a tweet from 2016.
    - SilasX 5y ago
      I think what the parent referring to is the DAO hack (from 2016) and how Ethereum’s response was to renege on “Code is Law” (and the integrity of the blockchain) in order to void those transactions (smartcontract exploits), which is a case of centralization resurfacing because VB could subvert the proof of work system when his own money was at risk. Ethereum Classic is the fork that refused to rewrite the blockchain to void the hack, and the linked tweet is VB affirming that he’s only working on the main (reneging) Ethereum fork (which goes by ETH), not Classic (goes by ETC). Not sure why the parent linked that tweet, maybe Twitter just makes it too hard it identify what tweet you actually want.
      - suikadayo 5y ago
        "Code is Law" was never part of Ethereum's ethos. It was some meme created by the company behind The DAO, and perhaps many people in the community supported it, but it wasn't part of Ethereum.
      - bouncycastle 5y ago
lottin 5y ago
PoW and PoS are exactly the same, 1 dollar gets you 1 vote. If you want 1 person, 1 vote you need 1) a census, and 2) a mechanism to prevent the sale and purchase of votes.
mattalex 5y ago
>> consensus will be set by the few whales, who will maximize their rent extraction at the expense of numerous small players Aren't you just describing capitalism here? The people that created the system and own the biggest share of it have gigantic influence on it. Matter of fact, isn't that exactly what happened in ethereums PoW network, too? The developers decided to switch to PoS regardless of what the current participants want. In general, isn't the idea of using PoS that if you aren't happy with the current system, you can easily fork into a competitor? If enough people think the current system is unjust, then you can switch to the new one, where you will be part of the development. At the beginning of the fork you also wouldn't need that much compute, as PoS is more efficient and you aren't going to have many users/transactions in the first place. Since it's easy to switch currency (at least easier than privately setting up a Dollar 2.0), members of the original currency have to behave fairly, else people are going to switch. Note: The thing people are switching to doesn't even have to be better in any way than the original currency. It just has to have different controllers to influence the members of the original system. The way I see it, is that there's no meaningful way in which PoS based currencies are worse than the current monetary system: large stakeholders in current global currencies also have gigantic leverage (think of money printing during the pandemic or bailouts after the 2008 financial crisis). The real advantage I see with PoS systems is not the system itself, but the tooling that comes with it and allows for the development of competitor currencies that check the power of each other. With current global currencies there's no checks-and-balances system inside the monetary decision making process, while a fleet of independent PoS has the chance for checks and balances to be induced through competitive pressure.
- adventured 5y ago
  > Aren't you just describing capitalism here? It fairly describes every political system and economic system that has ever existed or will ever exist. What's being described is how humans always organize systems in regards to political and economic power. See: Socialism, Communism, Fascism. It applies just the same to those. Except in those systems they'll murder you and your entire family, then burn your village/town to the ground, if you attempt to compete with the rulers or party (Chavez, Castro, Stalin, Lenin, Mao, Hitler, Mussolini, Pol Pot, Kim, Putin, Erdogan, Lukashenko, etc.). Whereas I can freely compete with Coca Cola, Tesla, Salesforce, Splunk, DigitalOcean, Cloudflare, Starbucks, 3M and most other companies if I'm able to. Nobody is stopping me from inventing a new coffee drink and going after Starbucks with it, or setting up a better coffee chain on the corner. Nobody is stopping me from inventing a better soda-competing drink (see: Monster or Red Bull or 5hour Energy; those people weren't assassinated by the soda cartel). Nobody is preventing me from starting the next great convenience store (ask 7-11 how they feel about upcoming Sheetz; or ask KFC how they feel about Chic-fil-A).
brightball 5y ago
That’s going to be the effect with every currency as the people starting it are going to have the most. Just how it works.
zionic 5y ago
> You want the multibillionaires to dictate the properties of the medium of exchange that serves the entire globe? Somebody tell him about the r-family.
kwertyoowiyop 5y ago
“Meet the new boss, same as the old boss…”
naasking 5y ago
> The more subtle and wildly prevalent failure mode is that the consensus will be set by the few whales, who will maximize their rent extraction at the expense of numerous small players, which will include most later adopters, aka the entire population of Earth. And that's where competition between currencies provides checks and balances against such pathological behaviours.
rictic 5y ago
PoS validation does not have to include any more power than a bitcoin miner has.
simonw 5y ago
> in DAOs, every vote resembles a banana republic: "90% voted, 90% in favour" I've been wondering about that recently - for all of the excitement about DAOs and Governance Tokens, are there any good examples of interesting decisions being made via their voting mechanisms? What are some places I can go to see recent votes and their outcomes?

turbinerneiter 5y ago

How is that different from PoW or our current political system?

inter_netuser 5y ago
miners go bankrupt in PoW for misbehaving. Large stakers can be rewarded for misbehaving, at your expense.
- jack_pp 5y ago
  They only go bankrupt if they don't hold the majority of the mining power, if they do they take over. How is this different from PoS? Actually in PoS if you try to attack and you don't have a majority you will lose all your coins. in PoW if you try to attack and somehow you miscalculated you will lose a couple of hours worth of electricity after which you can go back to mining normally so much lower stakes for an attack.
viro 5y ago
Because money can't literally buy votes. no matter how many ads you show me I would never vote for Trump.

TheMagicHorsey 5y ago

That’s absurd. People will opt out of currency regimes that are abusive. This is not like a terrestrial government where you are fucked for life because a bureaucracy controls the land you live on. You don’t have to immigrate to escape a corrupt currency. And you don’t have to all-in in one currency. If you own dozens of coins, you liquidate the shitcoin that is controlled by corrupt tycoons.

roenxi 5y ago

> Why would they structure it otherwise? It gets a lot more complicated than that because setting up competing systems is cheap. It is like saying "nobody would write this piece of software for free". What we learned with open source is if the cost of distribution gets low enough then there needs to be just one person somewhere on earth willing to maintain it and it can work. If the cost of creating trustworthy local (or international) monetary systems is basically 0 then it isn't obvious that plutocrats have an advantage beyond the one they already have by virtue of being powerful. If they can force you to use their system they already control the government so didn't need any technical help.

inter_netuser 5y ago
You can't fork gigawatt powerplants and silicon foundries by clicking a button on Github. You can't even fork a stablecoin. in case of a split in a PoS chain, the correct fork will be decided for you by USDC and Coinbase.
- cinquemb 5y ago
  You can fork decentralized over (crypto) collateralized stablecoins even if you can't force a fork of a centralized stablecoin operated by incorporated entity to be recognized by them. Unless we're going to pretend that there is only one way on and off networks and only in one currency denomination…
  - inter_netuser 5y ago
    how do I send a wire to DAI?
    - cinquemb 5y ago
      Just because you may not be willing to swap cash/gold/anything a local counter party values in whatever jurisdiction you reside in for a random networks gas and/or tokens that trade on them, doesn't mean others cannot. If you want to use coinbase to buy crypto and tokens, that's on you.

eftychis 5y ago

And Proof of Work is better because the haves buy equipment the have-nots can't buy to vote? Unless you have a citizenship based voting of some short where a single person gets a single vote and they actually vote (automatically I guess and assuming without delegating to the big whale because "I am bored") what do you think agreement via resource scarcity implies? P.S. Also lobbying...

inter_netuser 5y ago
This is a common misunderstanding. Proof of Work does not get you any votes at all. PoW is a service to the network, to create an immutable ledger. It comes with a very real nuclear option that will bankrupt miners if you misbehave and get fired by hashing algo change. It's just a boring industrial business, like smelting aluminum or iron.
- mission_failed 5y ago
  Smelting metals actually produces something, proof of work just burns electricity for the random chance of winning a lottery
  - rmbyrro 5y ago
    PoW produces something intangible. You're probably basing on an assumption that tangible products are more worthy or justifiable of resources consumed than intangibles. If you work with software development - which you probably do - I'd suggest checking what you do for a living, how much energy it consumes and how much physical product it generates.
    - DarylZero 5y ago
      It produces just what the person said. A lottery win.
    - DemocracyFTW 5y ago
      That argument could even be somehow valid if it were only possible to demonstrate that these intangibles improve life for people, like contributing to food, housing, education or even only entertainment. They do not. We do not have to care for those who are affluent enough to burn electricity just in order to gamble. Those people have the resources to gamble in less harmful ways without raising electricity prices and polluting the air the way they do. Those people could even do something helpful and productive if they chose to. Cryptomining is wasting energy for the sake of wasting energy. You may argue we (the 99.999% who do not cryptomine) are too stupid to see the value of your imaginary intangibles but that's not true. We are the ones who want no part in a pyramid scheme, who do not want to succumb to gambling, and whose time and money are too scarce and too precious to be put on the line. Sure, all activity has its price, its waste, and sure, there are other occupations whose overall usefulness is doubtful and askew with the accompanying resource consumption. Doesn't mean you have too excuse bad behavior just because there are other guys doing no good. Just as an aside, when you move a newspaper or a magazine from print to only existing as a web page, you certainly have 'dematerialized' it to a degree. However you still need hardware to keep and display the data and energy to move it around and light up the screens. In so far it does not stop being physical. The 'intangible' is somewhat of a red herring. Yes, it is less haptic, but it's still physics, physical all the way down. Other than that, currencies, freedom, equality, education, entertainment—we've been having intangibles all the time, at least from the dawn of human culture onward. Cryptomining does not bring anything genuinely new to the table in this respect. It's not even new in being a fraudulent, volatile scheme that betrays traits of a cult, one that benefits a few and hurts the many.

bouncycastle 5y ago

PoS in Ethereum is not a plutocracy...There is no voting with the token or any other governance. The stakers do not control the network, by design. The whole system works only if everybody (holders/users/stakere/devs) cooperate together.

inter_netuser 5y ago
Only some, it seems, are more equal than others. https://twitter.com/vitalikbuterin/status/760232885483806720 https://twitter.com/vitalikbuterin/status/760232885483806720
- bouncycastle 5y ago
  I'm not sure what you are linking to. This looks like a tweet from 2016.
  - SilasX 5y ago
    I think what the parent referring to is the DAO hack (from 2016) and how Ethereum’s response was to renege on “Code is Law” (and the integrity of the blockchain) in order to void those transactions (smartcontract exploits), which is a case of centralization resurfacing because VB could subvert the proof of work system when his own money was at risk. Ethereum Classic is the fork that refused to rewrite the blockchain to void the hack, and the linked tweet is VB affirming that he’s only working on the main (reneging) Ethereum fork (which goes by ETH), not Classic (goes by ETC). Not sure why the parent linked that tweet, maybe Twitter just makes it too hard it identify what tweet you actually want.
    - suikadayo 5y ago
      "Code is Law" was never part of Ethereum's ethos. It was some meme created by the company behind The DAO, and perhaps many people in the community supported it, but it wasn't part of Ethereum.
    - bouncycastle 5y ago

lottin 5y ago

PoW and PoS are exactly the same, 1 dollar gets you 1 vote. If you want 1 person, 1 vote you need 1) a census, and 2) a mechanism to prevent the sale and purchase of votes.

mattalex 5y ago

>> consensus will be set by the few whales, who will maximize their rent extraction at the expense of numerous small players Aren't you just describing capitalism here? The people that created the system and own the biggest share of it have gigantic influence on it. Matter of fact, isn't that exactly what happened in ethereums PoW network, too? The developers decided to switch to PoS regardless of what the current participants want. In general, isn't the idea of using PoS that if you aren't happy with the current system, you can easily fork into a competitor? If enough people think the current system is unjust, then you can switch to the new one, where you will be part of the development. At the beginning of the fork you also wouldn't need that much compute, as PoS is more efficient and you aren't going to have many users/transactions in the first place. Since it's easy to switch currency (at least easier than privately setting up a Dollar 2.0), members of the original currency have to behave fairly, else people are going to switch. Note: The thing people are switching to doesn't even have to be better in any way than the original currency. It just has to have different controllers to influence the members of the original system. The way I see it, is that there's no meaningful way in which PoS based currencies are worse than the current monetary system: large stakeholders in current global currencies also have gigantic leverage (think of money printing during the pandemic or bailouts after the 2008 financial crisis). The real advantage I see with PoS systems is not the system itself, but the tooling that comes with it and allows for the development of competitor currencies that check the power of each other. With current global currencies there's no checks-and-balances system inside the monetary decision making process, while a fleet of independent PoS has the chance for checks and balances to be induced through competitive pressure.

adventured 5y ago
> Aren't you just describing capitalism here? It fairly describes every political system and economic system that has ever existed or will ever exist. What's being described is how humans always organize systems in regards to political and economic power. See: Socialism, Communism, Fascism. It applies just the same to those. Except in those systems they'll murder you and your entire family, then burn your village/town to the ground, if you attempt to compete with the rulers or party (Chavez, Castro, Stalin, Lenin, Mao, Hitler, Mussolini, Pol Pot, Kim, Putin, Erdogan, Lukashenko, etc.). Whereas I can freely compete with Coca Cola, Tesla, Salesforce, Splunk, DigitalOcean, Cloudflare, Starbucks, 3M and most other companies if I'm able to. Nobody is stopping me from inventing a new coffee drink and going after Starbucks with it, or setting up a better coffee chain on the corner. Nobody is stopping me from inventing a better soda-competing drink (see: Monster or Red Bull or 5hour Energy; those people weren't assassinated by the soda cartel). Nobody is preventing me from starting the next great convenience store (ask 7-11 how they feel about upcoming Sheetz; or ask KFC how they feel about Chic-fil-A).

brightball 5y ago

That’s going to be the effect with every currency as the people starting it are going to have the most. Just how it works.

zionic 5y ago

> You want the multibillionaires to dictate the properties of the medium of exchange that serves the entire globe? Somebody tell him about the r-family.

kwertyoowiyop 5y ago

“Meet the new boss, same as the old boss…”

naasking 5y ago

> The more subtle and wildly prevalent failure mode is that the consensus will be set by the few whales, who will maximize their rent extraction at the expense of numerous small players, which will include most later adopters, aka the entire population of Earth. And that's where competition between currencies provides checks and balances against such pathological behaviours.

rictic 5y ago

PoS validation does not have to include any more power than a bitcoin miner has.

simonw 5y ago

> in DAOs, every vote resembles a banana republic: "90% voted, 90% in favour" I've been wondering about that recently - for all of the excitement about DAOs and Governance Tokens, are there any good examples of interesting decisions being made via their voting mechanisms? What are some places I can go to see recent votes and their outcomes?