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My opinion on PoS is that because no other community that I know of outside of bitcoin has a culture of running nodes normal people will just stake through exch

My opinion on PoS is that because no other community that I know of outside of bitcoin has a culture of running nodes normal people will just stake through exchanges. Now you have these exchanges acting not only as the in and out ramps but also as the biggest network validators meaning that they can direct transactions. Congratulations. You’ve just went full circle and invented central banks. Am I wrong? Would gladly read counter arguments.

mattdesl 5y ago
In a chain like Tezos, the validator software is relatively easy to run if you have a Raspberry Pi and some terminal chops, and a lot of hobbyists do stake this way. But it’s easier for most people to delegate to another party. This is where decentralized staking pools for ETH2[1] built around smart contract interactions could be a good alternative for many users, and may compete with centralized staking platforms. The mere fact that these peer-to-peer and decentralized alternatives exist, and that some portion of users will prefer to use them, is what makes this technology distinct. [1] - https://rocketpool.net/ https://rocketpool.net/
- ulzeraj 5y ago
  > The mere fact that these peer-to-peer and decentralized alternatives exist, and that some portion of users will prefer to use them, is what makes this technology distinct. I can imagine projects that can run on cheap hardware thriving but what happens when you put the weight of exchanges like Coinbase and their users against the hobbyst node count?
  - mattdesl 5y ago
    This is already happening; centralized exchanges and staking pools like Kraken make up a high percentage of ETH2 validators (just as PoW seems to gravitate toward large mining pools). Despite that, PoS has the benefit of offering decentralized staking pools like RocketPool, and the fact that they are growing may indicate that the chain will over time become more decentralized and less able to be centrally attacked[1]. The PoS mechanism itself is also perhaps more resilient to these kind of attacks, see [2]. None of this mechanism is as simple as PoW (which has worked quite well for BTC and ETH so far), but the environmental cost makes it worth exploring an alternative mechanism. [1] - https://uk.style.yahoo.com/valid-points-ethereum-2-0-113000527.html https://uk.style.yahoo.com/valid-points-ethereum-2-0-1130005... [2] - https://vitalik.ca/general/2020/11/06/pos2020.html https://vitalik.ca/general/2020/11/06/pos2020.html
wmf 5y ago
In practice PoS chains have hundreds of nodes or more. In Bitcoin, nodes can't stop a 51% attack and I don't know if the software would even alert you when a 51% attack is likely going on.
- ulzeraj 5y ago
  > In practice PoS chains have hundreds of nodes or more. Is that supposed to be a lot? I look at the node requirements for these new chains and they mention monstrous amounts of cpu and storage power. > In Bitcoin, nodes can't stop a 51% attack and I don't know if the software would even alert you when a 51% attack is likely going on. My question was about regulated exchanges dominating huge percentage of PoS validators. What are you going to do when, due to regulatory pressure, Coinbase and Binance start to implement blackists and OFAC based validators into those PoS chains?
joshuajbouw 5y ago
No, you are right. In the old school PoS days when we did Blackcoin we were vehemently against staking from pools.
TimJRobinson 5y ago
Ethereum has over 260,000 validators right now [0], and you can run one on a Raspberry Pi. Some are on centralized exchanges but most are not. Rocketpool [1] also recently launched which is a decentralized service that makes it super easy to setup your own node, and more profitable than staking anywhere else. My node is generating the normal staking rewards (~5.5%), plus another 12% bonus (from ETH from individuals being paired with my node), plus another 50% in RPL rewards. That 50% will surely drop, but it will always be better than just staking by itself. RocketPool also allows individuals to stake as little as 0.01 ETH, the same as centralized exchanges, but it's decentralized, and they get rETH in return, which they can use in Decentralized Finance, giving them even better returns. Put together Rocketpool gives better returns in a more decentralized way than any centralized exchange does, and unless you're really new and don't want to move off your exchange, it's a no brainer better alternative. [0]: https://beaconcha.in/ https://beaconcha.in/ [1]: https://rocketpool.net/ https://rocketpool.net/

mattdesl 5y ago

In a chain like Tezos, the validator software is relatively easy to run if you have a Raspberry Pi and some terminal chops, and a lot of hobbyists do stake this way. But it’s easier for most people to delegate to another party. This is where decentralized staking pools for ETH2[1] built around smart contract interactions could be a good alternative for many users, and may compete with centralized staking platforms. The mere fact that these peer-to-peer and decentralized alternatives exist, and that some portion of users will prefer to use them, is what makes this technology distinct. [1] - https://rocketpool.net/ https://rocketpool.net/

ulzeraj 5y ago
> The mere fact that these peer-to-peer and decentralized alternatives exist, and that some portion of users will prefer to use them, is what makes this technology distinct. I can imagine projects that can run on cheap hardware thriving but what happens when you put the weight of exchanges like Coinbase and their users against the hobbyst node count?
- mattdesl 5y ago
  This is already happening; centralized exchanges and staking pools like Kraken make up a high percentage of ETH2 validators (just as PoW seems to gravitate toward large mining pools). Despite that, PoS has the benefit of offering decentralized staking pools like RocketPool, and the fact that they are growing may indicate that the chain will over time become more decentralized and less able to be centrally attacked[1]. The PoS mechanism itself is also perhaps more resilient to these kind of attacks, see [2]. None of this mechanism is as simple as PoW (which has worked quite well for BTC and ETH so far), but the environmental cost makes it worth exploring an alternative mechanism. [1] - https://uk.style.yahoo.com/valid-points-ethereum-2-0-113000527.html https://uk.style.yahoo.com/valid-points-ethereum-2-0-1130005... [2] - https://vitalik.ca/general/2020/11/06/pos2020.html https://vitalik.ca/general/2020/11/06/pos2020.html

wmf 5y ago

In practice PoS chains have hundreds of nodes or more. In Bitcoin, nodes can't stop a 51% attack and I don't know if the software would even alert you when a 51% attack is likely going on.

ulzeraj 5y ago
> In practice PoS chains have hundreds of nodes or more. Is that supposed to be a lot? I look at the node requirements for these new chains and they mention monstrous amounts of cpu and storage power. > In Bitcoin, nodes can't stop a 51% attack and I don't know if the software would even alert you when a 51% attack is likely going on. My question was about regulated exchanges dominating huge percentage of PoS validators. What are you going to do when, due to regulatory pressure, Coinbase and Binance start to implement blackists and OFAC based validators into those PoS chains?

joshuajbouw 5y ago

No, you are right. In the old school PoS days when we did Blackcoin we were vehemently against staking from pools.

TimJRobinson 5y ago

Ethereum has over 260,000 validators right now [0], and you can run one on a Raspberry Pi. Some are on centralized exchanges but most are not. Rocketpool [1] also recently launched which is a decentralized service that makes it super easy to setup your own node, and more profitable than staking anywhere else. My node is generating the normal staking rewards (~5.5%), plus another 12% bonus (from ETH from individuals being paired with my node), plus another 50% in RPL rewards. That 50% will surely drop, but it will always be better than just staking by itself. RocketPool also allows individuals to stake as little as 0.01 ETH, the same as centralized exchanges, but it's decentralized, and they get rETH in return, which they can use in Decentralized Finance, giving them even better returns. Put together Rocketpool gives better returns in a more decentralized way than any centralized exchange does, and unless you're really new and don't want to move off your exchange, it's a no brainer better alternative. [0]: https://beaconcha.in/ https://beaconcha.in/ [1]: https://rocketpool.net/ https://rocketpool.net/