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> Proof of Stake systems (of which they are many in the market already like Solana, Avalanche, etc) are considered more secure because the likelihood of a 51% a

by yuan43 4y ago

> Proof of Stake systems (of which they are many in the market already like Solana, Avalanche, etc) are considered more secure because the likelihood of a 51% attack is much lower. I don’t plan to lay out the argument here, but suffice it to say that Ethereum is moving to a consensus mechanism that many consider to be more resistant to attack, making it even more secure than it has been. I don't think so. At best, we can say that the attack surface will have changed. How it has changed will unfold. But to claim that POS is "more resistant to attack" is complete rubbish and a sign the author is clueless about the technological ramifications. It's kind of like saying that traveling 2 miles below the ocean's surface by submarine is safer than traveling by car because you can't get hit by a drunk driver.

thesausageking 4y ago
Ever since Fred pumped $Kin, I have a hard time taking anything he says about crypto seriously. Here he seems to be again talking his book, even when the facts don't agree with him.
silentsea90 4y ago
+1 two different systems with their own pros and cons. So far PoW seems more resilient, but that may also have to do with Bitcoin treating nation states and centralized entities as adversaries from the start.
derefr 4y ago
This wasn't supposed to be an argument about the relative exploitability of the attack-surfaces presented by implementations of the technologies of PoW and PoS consensus systems, though; but rather about the economics inherent in "cornering the market" in PoW vs PoS. PoW and PoS both allow a single party to unilaterally control the network when they're working exactly as intended — just under conditions that are impractical in major networks. That impracticality can be measured in economic terms — as a dollars-and-cents cost to acquire the assets necessary to take control. It's harder to buy out 51% of validation stake of a network of size N, than it is to buy the GPUs and the electricity to power them to do 51% of the mining for a network of size N. GPUs are technically unbounded — you can just build your own fabs, if you really care — and so the marginal cost of acquiring another GPU+electricity is constant. But stake is a pie; the marginal cost of acquiring more of it increases as less of it remains available on the market. (And many people will just never give theirs up, for ideological reasons.) Thus, it's harder to Sybil attack PoS than PoW.
- scottiebarnes 4y ago
  51% attacks aren't just a single actor dictating blocks, but the threat of a cartel of large stakeholders cooperating to attain 51% of vote power
  - derefr 4y ago
    Yes, and? This is orthogonal to PoW vs PoS. In either case, you can treat the resulting cartel as "a single party" for purposes of modelling them. It's also not really a scenario worth considering. In order to cooperate, the miners/validators need to have full alignment on their goals. Which is very unlikely for Sybil attacks, which almost always destroy systemic economic value — including the value held by the attackers. You might be able to find e.g. a government who wants to do a Sybil attack to accomplish goal X, and are willing to burn down $N billion dollars of their own staked assets to do so; but can you find a bunch of other governments or large corporations who also want to accomplish that same goal X more than they want their own stake-value? And who can be trusted to coordinate and not leak the plan? A Sybil attack is basically like a bank heist where the attacker(s) have to pull up to the bank in their own personal aircraft carriers (destroying said aircraft carriers in the process, from the hull damage of sliding along several city streets), without anyone realizing they're coming. You can maybe theoretically do it as one entity with full internal goal-alignment. It's much harder to do it as multiple entities.
    - scottiebarnes 4y ago
      One relevant question is which system allows for the pooling of resources easier. In PoW you have mining pools, and a member changing pools is trivial as changing an address. In PoS you have large organizations like Coinbase running staking for users. Don't know how withdrawls will work, but that could be a very significant amount of eth. Coinbase would have to vote a certain way to comply with laws.
      - derefr 4y ago
        From the Coinbase User Agreement (https://www.coinbase.com/legal/user_agreement/united_states#staking-services https://www.coinbase.com/legal/user_agreement/united_states#...): > 1.4. Governance and Voting. For certain Digital Assets, the underlying protocols offer stakers the ability to vote on matters related to the governance of protocol-level issues. Coinbase may or may not support voting for such assets, and may cease supporting voting at any time in its discretion. Coinbase will comply with your instruction to vote your Supported Digital Assets to the extent Coinbase or its affiliate supports voting for such Supported Digital Assets. In certain cases, Coinbase may vote on your behalf where Coinbase or the applicable protocol does not support delegated voting; in those instances, Coinbase will vote with the protocol’s recommendation. But what about jurisdictions that compel them to vote in certain ways? From the Coinbase page on Eth2 staking (https://help.coinbase.com/en/coinbase/trading-and-funding/coinbase-earn/eth-2-0-staking https://help.coinbase.com/en/coinbase/trading-and-funding/co...): > To be eligible to stake ETH, you must: [...] Live in a jurisdiction eligible for ETH staking. > Which regions are eligible for ETH staking? [...] United States (excluding Hawaii & New York) In other words: they're just not going to offer the service in any place that compels them to vote a certain way. I presume most delegatable validators have chosen a similar option: avoiding the problem entirely by not taking anyone's money if they're from those jurisdictions. Just as most ICOs in 2017, when the US didn't have regulatory clarity on crypto being a security or not, just avoided the problem entirely by preventing (direct) sales to US-market investors.

by yuan43 4y ago

thesausageking 4y ago

Ever since Fred pumped $Kin, I have a hard time taking anything he says about crypto seriously. Here he seems to be again talking his book, even when the facts don't agree with him.

silentsea90 4y ago

+1 two different systems with their own pros and cons. So far PoW seems more resilient, but that may also have to do with Bitcoin treating nation states and centralized entities as adversaries from the start.

derefr 4y ago

This wasn't supposed to be an argument about the relative exploitability of the attack-surfaces presented by implementations of the technologies of PoW and PoS consensus systems, though; but rather about the economics inherent in "cornering the market" in PoW vs PoS. PoW and PoS both allow a single party to unilaterally control the network when they're working exactly as intended — just under conditions that are impractical in major networks. That impracticality can be measured in economic terms — as a dollars-and-cents cost to acquire the assets necessary to take control. It's harder to buy out 51% of validation stake of a network of size N, than it is to buy the GPUs and the electricity to power them to do 51% of the mining for a network of size N. GPUs are technically unbounded — you can just build your own fabs, if you really care — and so the marginal cost of acquiring another GPU+electricity is constant. But stake is a pie; the marginal cost of acquiring more of it increases as less of it remains available on the market. (And many people will just never give theirs up, for ideological reasons.) Thus, it's harder to Sybil attack PoS than PoW.

scottiebarnes 4y ago
51% attacks aren't just a single actor dictating blocks, but the threat of a cartel of large stakeholders cooperating to attain 51% of vote power
- derefr 4y ago
  Yes, and? This is orthogonal to PoW vs PoS. In either case, you can treat the resulting cartel as "a single party" for purposes of modelling them. It's also not really a scenario worth considering. In order to cooperate, the miners/validators need to have full alignment on their goals. Which is very unlikely for Sybil attacks, which almost always destroy systemic economic value — including the value held by the attackers. You might be able to find e.g. a government who wants to do a Sybil attack to accomplish goal X, and are willing to burn down $N billion dollars of their own staked assets to do so; but can you find a bunch of other governments or large corporations who also want to accomplish that same goal X more than they want their own stake-value? And who can be trusted to coordinate and not leak the plan? A Sybil attack is basically like a bank heist where the attacker(s) have to pull up to the bank in their own personal aircraft carriers (destroying said aircraft carriers in the process, from the hull damage of sliding along several city streets), without anyone realizing they're coming. You can maybe theoretically do it as one entity with full internal goal-alignment. It's much harder to do it as multiple entities.
  - scottiebarnes 4y ago
    One relevant question is which system allows for the pooling of resources easier. In PoW you have mining pools, and a member changing pools is trivial as changing an address. In PoS you have large organizations like Coinbase running staking for users. Don't know how withdrawls will work, but that could be a very significant amount of eth. Coinbase would have to vote a certain way to comply with laws.
    - derefr 4y ago
      From the Coinbase User Agreement (https://www.coinbase.com/legal/user_agreement/united_states#staking-services https://www.coinbase.com/legal/user_agreement/united_states#...): > 1.4. Governance and Voting. For certain Digital Assets, the underlying protocols offer stakers the ability to vote on matters related to the governance of protocol-level issues. Coinbase may or may not support voting for such assets, and may cease supporting voting at any time in its discretion. Coinbase will comply with your instruction to vote your Supported Digital Assets to the extent Coinbase or its affiliate supports voting for such Supported Digital Assets. In certain cases, Coinbase may vote on your behalf where Coinbase or the applicable protocol does not support delegated voting; in those instances, Coinbase will vote with the protocol’s recommendation. But what about jurisdictions that compel them to vote in certain ways? From the Coinbase page on Eth2 staking (https://help.coinbase.com/en/coinbase/trading-and-funding/coinbase-earn/eth-2-0-staking https://help.coinbase.com/en/coinbase/trading-and-funding/co...): > To be eligible to stake ETH, you must: [...] Live in a jurisdiction eligible for ETH staking. > Which regions are eligible for ETH staking? [...] United States (excluding Hawaii & New York) In other words: they're just not going to offer the service in any place that compels them to vote a certain way. I presume most delegatable validators have chosen a similar option: avoiding the problem entirely by not taking anyone's money if they're from those jurisdictions. Just as most ICOs in 2017, when the US didn't have regulatory clarity on crypto being a security or not, just avoided the problem entirely by preventing (direct) sales to US-market investors.