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The big difference is that hardware depreciates. Proof of stake requires none other than a single purchase to be gifted the right to perpetual seignorage. Staki
by dereg 5y ago
The big difference is that hardware depreciates. Proof of stake requires none other than a single purchase to be gifted the right to perpetual seignorage. Staking ETH once versus constant operation of a mining farm is a non-trivial delta in effort.
- meowkit 5y ago…and to maintain (or pay a host to maintain) a node.
- dereg 5y agoI suppose so. If you're payment to an agent to carry out either task, the downstream complexity of the task is irrelevant because the difficulty to you is the same.
- DennisP 5y agoIt costs less to stake, but it pays less too. Ethereum's staking rewards are an order of magnitude lower than its mining rewards.
- chrismmay 5y agoThe minimum amount required to stake is 32 ETH. That’s $75k at today’s price. There are cheaper was to “stake” but those are not really “ETH PoS” staking. So no, it does not “cost less to stake”.
- magicjosh 5y agoWhat are you comparing $75k to? My understanding is meaningful mining under PoW requires buying expensive mining hardware that goes out of date quickly. Under PoS there is no such depreciation...a laptop from 2020 will likely be able to run PoS in 2040.
- chrismmay 5y agoI personally have been mining ETH for years with equipment I bought for $20k in 2017 - 2018. I’ve made many times my investment back. That same equipment is still running profitably today.
- aspenmayer 5y agoAre you ASIC or GPU mining?
- aspenmayer 5y agoThere are ways to have a fractionalized stake, essentially the PoS equivalent of participating in a PoW mining pool. They call them staking pools, which seems logical enough. https://stakingether.com/ https://stakingether.com/ https://rocketpool.net/ https://rocketpool.net/ https://beaconcha.in/stakingServices https://beaconcha.in/stakingServices
- chrismmay 5y agoI agree with you of course, but those are not “ETH PoS” staking, strictly speaking. They are just layers on top. You definitely make more running your own validators.
- DennisP 5y agoThere's initial capital expense, and ongoing expense. You're of course correct that the minimum capital is lower with mining. However, given a $75K initial investment, a miner has much higher ongoing expense.
- chrismmay 5y agoThat's not necessarily true. Some people mine with 100% solar power and their ongoing expenses are almost zero.
- DennisP 5y agoSo, my original point was to respond to the above comment: "Proof of stake requires none other than a single purchase to be gifted the right to perpetual seignorage." My claim was that the lower ongoing expense of staking is compensated by lower rewards, so that both systems have similar profit for similar capital outlay. In setups where mining expense is almost zero, the higher rewards of mining give it much more seignorage than proof of stake.