6 ms·

How does it work?

by haarts 4y ago

How does it work?

rglullis 4y ago
PoS does not give you any power to change the rules of the system, it only makes sure that those who are invested in the system get (slightly) rewarded for good behavior and (heavily) penalized for bad behavior.
- hellcow 4y ago
  That “bad behavior” is precisely what the above poster meant by “changing the rules of the system.” If you or a syndicate have a large enough stake, you can manipulate the transactions which occur.
  - rglullis 4y ago
    "By large enough", you mean 67% to attempt to do it with some chance of success, and if it fails it gets slashed. Not to mention that no one would be interested in using any network where this level of centralization could pose a real threat, and the most likely outcome of such a scenario would be a loss of the value of the native token.
    - cowtools 4y ago
      ...but if it succeeds, then everyone else gets slashed. The network has no concept of "truth". PoS doesn't fix this, it just puts all your eggs in one basket. Who would be interested in using any network which exists only for the profit of the existing stakeholders? Why not just fork it?
      - aeternum 4y ago
        Forking it is the real threat. If some entity does end up controlling 67% or doing something the community does not agree with, people will just stop using the chain. This already happened once with Ethereum.
        cowtools 4y ago
        Yes, but etherium forked in favor of the stakeholders.
        skinnymuch 4y ago
        A lot of the stakeholders of Eth classic and the forked current Eth believe in code is law. The fork is and wasn’t in favor of that.
        rglullis 4y ago
        Depends on who you ask, and what fork they would rather be. Those that decide against the fork stayed on what became "classic".
        aeternum 4y ago
        Which is the ultimate form of consensus: which fork does society actually choose to use? In the end, that's what really matters.
  - programmarchy 4y ago
    ...which incentivizes the network to become more decentralized.
- f38zf5vdt 4y ago
  This is the prevailing theory but in practice I'm not sure it will work. Ethereum forked early on due to someone stealing some money from The DAO. In reality the exchanges/large corporate owners will be the ones doing network validation, and they will be the ones most easily leaned on by their respective governments. If a government(s) says "you need to veer off this version of Ethereum and run your own", the chain will fork. It looks to me that proof of stake defends against small time actors, not activist shareholders or government regulation.
  - rglullis 4y ago
    > If a government(s) says "you need to veer off this version of Ethereum and run your own. Which governments, saying to whom? And how would they enforce it? What would be the consequences for those that didn't comply?
    - f38zf5vdt 4y ago
      They can use the classic decentralized conflict resolution method, proof of violence.
      - rglullis 4y ago
        The governments doing that don't need any excuse.
  - yellowapple 4y ago
    > This is the prevailing theory but in practice I'm not sure it will work. There are other proof-of-stake blockchains other than Ethereum, and for those it has indeed worked quite well in practice.
  - operator-name 4y ago
    Ethereum's fork was at the social layer, and whatever om chain consensus mechanisms cannot prevent that. Even with the fork, ETC still exists to this day. The difference with slashing is that forking is no longer "free" as each fork penalises members who only support the other fork. Let's consider your example in PoW and PoS with slashing. In PoW both chains would continue and miners can freely switch - their funds are also duplicated. In PoS those that support each chain will eventually be locked in, and penalised if the other chain "wins". This doesn't prevent all (or effectively enough) stakers being coerced/forced by a powerful enough entity, but that's a social problem that no consensus algorithm can resolve - just as if effectively everyone was a bad actor.
dqpb 4y ago
Silvio Micali (MIT professor and Turing award winner) describes a PoS implementation which addresses all the concerns in this thread: https://youtu.be/NykZ-ZSKkxM https://youtu.be/NykZ-ZSKkxM

How does it work?

by haarts 4y ago

How does it work?

PoS does not give you any power to change the rules of the system, it only makes sure that those who are invested in the system get (slightly) rewarded for good behavior and (heavily) penalized for bad behavior.

hellcow 4y ago
That “bad behavior” is precisely what the above poster meant by “changing the rules of the system.” If you or a syndicate have a large enough stake, you can manipulate the transactions which occur.
- rglullis 4y ago
  "By large enough", you mean 67% to attempt to do it with some chance of success, and if it fails it gets slashed. Not to mention that no one would be interested in using any network where this level of centralization could pose a real threat, and the most likely outcome of such a scenario would be a loss of the value of the native token.
  - cowtools 4y ago
    ...but if it succeeds, then everyone else gets slashed. The network has no concept of "truth". PoS doesn't fix this, it just puts all your eggs in one basket. Who would be interested in using any network which exists only for the profit of the existing stakeholders? Why not just fork it?
    - aeternum 4y ago
      Forking it is the real threat. If some entity does end up controlling 67% or doing something the community does not agree with, people will just stop using the chain. This already happened once with Ethereum.
      - cowtools 4y ago
        Yes, but etherium forked in favor of the stakeholders.
        skinnymuch 4y ago
        A lot of the stakeholders of Eth classic and the forked current Eth believe in code is law. The fork is and wasn’t in favor of that.
        rglullis 4y ago
        Depends on who you ask, and what fork they would rather be. Those that decide against the fork stayed on what became "classic".
        aeternum 4y ago
        Which is the ultimate form of consensus: which fork does society actually choose to use? In the end, that's what really matters.
- programmarchy 4y ago
  ...which incentivizes the network to become more decentralized.
f38zf5vdt 4y ago
This is the prevailing theory but in practice I'm not sure it will work. Ethereum forked early on due to someone stealing some money from The DAO. In reality the exchanges/large corporate owners will be the ones doing network validation, and they will be the ones most easily leaned on by their respective governments. If a government(s) says "you need to veer off this version of Ethereum and run your own", the chain will fork. It looks to me that proof of stake defends against small time actors, not activist shareholders or government regulation.
- rglullis 4y ago
  > If a government(s) says "you need to veer off this version of Ethereum and run your own. Which governments, saying to whom? And how would they enforce it? What would be the consequences for those that didn't comply?
  - f38zf5vdt 4y ago
    They can use the classic decentralized conflict resolution method, proof of violence.
    - rglullis 4y ago
      The governments doing that don't need any excuse.
- yellowapple 4y ago
  > This is the prevailing theory but in practice I'm not sure it will work. There are other proof-of-stake blockchains other than Ethereum, and for those it has indeed worked quite well in practice.
- operator-name 4y ago
  Ethereum's fork was at the social layer, and whatever om chain consensus mechanisms cannot prevent that. Even with the fork, ETC still exists to this day. The difference with slashing is that forking is no longer "free" as each fork penalises members who only support the other fork. Let's consider your example in PoW and PoS with slashing. In PoW both chains would continue and miners can freely switch - their funds are also duplicated. In PoS those that support each chain will eventually be locked in, and penalised if the other chain "wins". This doesn't prevent all (or effectively enough) stakers being coerced/forced by a powerful enough entity, but that's a social problem that no consensus algorithm can resolve - just as if effectively everyone was a bad actor.

dqpb 4y ago

Silvio Micali (MIT professor and Turing award winner) describes a PoS implementation which addresses all the concerns in this thread: https://youtu.be/NykZ-ZSKkxM https://youtu.be/NykZ-ZSKkxM