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Is it incorrect to say that ethereum is now entirely centralized with some extra steps? Like, you have this proof of stake thing, but the only reason it works

Is it incorrect to say that ethereum is now entirely centralized with some extra steps? Like, you have this proof of stake thing, but the only reason it works is because there's just a small number of validators, which is just going to be the ethereum foundation and friends. edit: putting this at the top because nobody is responding on topic. I am NOT talking about the class of people who stake 32 eth to validate nodes. I am talking about the class of people with the ability to declare that the people with stakes did not validate correctly and therefore lose their stakes. My understanding is that this is a very small number of people and is mostly just the ethereum foundation. edit edit: The term for this class is apparently called slashers, not validators.

JohnJamesRambo 4y ago
Yes it is incorrect. https://i.redd.it/5lhlmwdg27j91.png https://i.redd.it/5lhlmwdg27j91.png Ethereum will be more decentralized after proof of stake. No longer do you need massive amounts of electricity and insider access to gpu or asic manufacturers.
- luma 4y ago
  Instead you just need a massive amount of eth
  - Zamicol 4y ago
    Wouldn't those with ownership in a system be best trusted with the self-interest of such a system? That seems to be the best alignment of incentives.
    - luma 4y ago
      Sure, and Regular Money is best governed by billionaires. Incentives line up nicely if you're already rich.
    - AlexandrB 4y ago
      What was the point of BTC and ETH then? We already have the system you describe with fiat currency and traditional banks.
      - landemva 4y ago
        There are additional goals including in part censorship resistance and it can't be seized without the keys.
      - 735409264082 4y ago
        32 Ether or mining equipment is nothing compared to what you need to have any real influence over fiat money.
- spywaregorilla 4y ago
  This is not the question I am asking. You can have many people putting up their 32 ETH. Sure that's "decentralized". But what if most of the stakers collude to double spend tokens? My understanding is that there is an additional layer of validators that have the power to force them to give up their stake as a penalty. Hence "proof of stake". And that there are very few validators. And it's really just the ethereum foundation.
  - zaptrem 4y ago
    You’re mistaken, validators and stakers are one and the same. A 51% attack becomes unbelievably more expensive in a proof of stake system, especially because at the end of it all of your money is burned (whereas with POW you get to keep the GPUs unless they change the algo).
    - spywaregorilla 4y ago
      stakers/validators vs. slashers
      - PretzelPirate 4y ago
        There is no defined role called a “slasher”. There are randomly-decided committees that are regularly updated as part of Ethereum PoS consensus that play different roles. Your validator could be in any one of those roles (or in a pending state) at any time.
        spywaregorilla 4y ago
        I'm almost certain that is incorrect. This is an optional, expensive seeming process. e.g. https://docs.prylabs.network/docs/prysm-usage/slasher https://docs.prylabs.network/docs/prysm-usage/slasher
        deleted 4y ago
        [deleted]
- Anunayj 4y ago
  It should however be noted that Ethereum had a ICO [1] on launch, where you could buy ethereum for a particular price. 9.9% percentage of that also was set aside for "founders". (it could however be more [2]) Today it accounts for something like 59% (72m) of total supply (~120m). Make what you will of that. 1. https://www.gemini.com/cryptopedia/initial-coin-offering-explained-ethereum-ico https://www.gemini.com/cryptopedia/initial-coin-offering-exp... 2. https://medium.com/@hasufly/ethereum-presale-dynamics-revisited-c1b70ac38448 https://medium.com/@hasufly/ethereum-presale-dynamics-revisi...
  - xur17 4y ago
    > 9.9% percentage of that also was set aside for "founders" > Today it accounts for something like 59% of total supply. Make what you will of that. Can you help me understand what exactly this means? Ethereum's supply has grown since the presale, so if anything the 9.9% should have gotten smaller since then.
    - Anunayj 4y ago
      Oh, I was a bit unclear there. The 9.9% was of the total money that was raised in the ICO (60m) and ended up being ~5.9m. The total initial premine was 72m (~59% of today's supply). I think someone more knowledgeable might provide a better breakdown of those funds, except that the article(s) linked covers it a lot better than my comment.
      - gnramires 4y ago
        Since this "premine" (the 59%) was really a token sale, I don't think it's too problematic (mining is buying tokens with electricity/hardware).
    - bhaak 4y ago
      OP has provided the right links but either misunderstood the text or phrased it very confusingly. https://messari.io/asset/ethereum/profile/launch-and-initial-token-distribution https://messari.io/asset/ethereum/profile/launch-and-initial... Ethereum's crowdsale supply was 72 million ETH. Of that 60 million were sold for BTC in the crowdsale. 6 million was given to the Ethereum Foundation and 6 million to early contributors (overall 20% of what was sold was created as a pre-mine). Now Ethereum's supply is ~122 million, so the miners produced 50 millions new ETH.
- Zamicol 4y ago
  1. Energy production and 2. specialized chip production are both centralized, with the later being highly centralized. The move to PoS removes both of these centralized targets.
- falcolas 4y ago
  > No longer do you need massive amounts of electricity and insider access to gpu or asic manufacturers. No, you just need money, 32 eth is only around $50000. And there's a lot of people with sufficient money to stand up multiple validators. And validators can also initiate/vote on arbitrary slash requests (which costs them nothing, as I read it).
  - onlyrealcuzzo 4y ago
    Sounds like an improvement to burning an entire country's worth of electricity...
    - falcolas 4y ago
      There's a tradeoff. We need to acknowledge the tradeoff, and be prepared for the folks who just want to watch the world burn, and have the money to do so.
  - newsclues 4y ago
    As a not well off person with a gaming computer with power included in my rent, I don’t have 50,000$. Shrinking the number of people with the financial means to contribute doesn’t seem like it’s going to result in decentralization.
    - sebzim4500 4y ago
      Right but you can't afford to buy ASICs either so from your point of view the situation hasn't really changed. The chance of you ever being able to mine an ETH block with your gaming PC is negligable.
      - newsclues 4y ago
        I’ve made .2 eth in under a year.
jjulius 4y ago
I have been wondering the same thing about this, too. I'm fairly eye-rolly when it comes to crypto and such, so I'd be curious to see if this take is accurate or not.
thebeastie 4y ago
No, the validators are anyone with a stake in the system, not just the Ethereum foundation and friends.
- spywaregorilla 4y ago
  Not the people putting up the stake. The people with the power to declare them liars who lose their stake.
- IHLayman 4y ago
  But, a stake has to be at least 32 ETH, where at $1650/ETH lands you at $52,800. So, the validators have to have a significant investment in the platform, more than your average investor, and far more than anyone simply owning ETH. While I don't necessarily agree with the centralization arguments, I do agree that it is a far smaller group of people than you'd think.
  - bowsamic 4y ago
    $52,800 is a pittance compared to any remotely significant mining operation
    - shudza 4y ago
      you don't need mining equipment to validate transactions on bitcoin, nor do you need to own it. With ETH, you need to own 32 ETH, obviously.
      - exo762 4y ago
        There is a confusion in language used. Bitcoin has two types of actors: block consumers and block producers. Ethereum has three types of actors: block consumers, validators and block producers. Thing often described as "full node" does just that - it consumes blocks, checking if blocks are valid. Ethereum validators are different, they not only consume blocks, they also attest their correctness for the rest of the network.
dmichulke 4y ago
Let's say it like this: In the near future the rules are made by the people with the most ETH and soon after the most ETHs will be earned by the people who make the rules.
- tylersmith 4y ago
  That's not true. Stakers don't make the rules any more than miners make Bitcoin rules.
  - eterm 4y ago
    Miners do make Bitcoin rules though, the entire protocol is a consensus protocol driven by the miners.
    - tromp 4y ago
      Wrong; if miners deviate from the rules, then their blocks are simply ignored by everyone else.
      - Spivak 4y ago
        If a group of miners with minority compute power deviate from the rules they are ignored. If a group of miners with majority of compute power deviate from the rules, they become the rules. This process is how all changes to Bitcoin get rolled out.
        garydevenay 4y ago
        The rules of the Bitcoin network are not validated by miners, they are validated by nodes. The miners have no control over nodes and unless their mining work is accepted by the consensus rules of the nodes they receive no mining reward.
        Spivak 4y ago
        Miners and nodes have to be in agreement, when they're not you're right they've essentially fork BTC but I think you're wrong about who really holds the power and which chain would end up being the authoritative one after such an event.
potatototoo99 4y ago
Yes, it is correct. It was already much more centralized than for instance bitcoin, due to the difficulty in having a validator node, but now it is just managed by the big holders and that's that. Furthermore, they will censor transactions according to US laws at least, and if you try to validate and not censor, you will get your staked coins taken from you by the protocol (as opposed to PoW, where you just fail to get your block in the chain), so this is another nail in the coffin of this project imo.
- bowsamic 4y ago
  No, it's the opposite. Proof of work is more centralised than proof of stake, because the former has an economy of scale: it's cheaper to add a single miner if you are a big mining operation vs a small mining operation. On the other hand, staking 1 eth is always staking 1 eth.
  - deleted 4y ago
    [deleted]
  - zyphr 4y ago
    You can't stake 1 eth yourself. You need to at least 32 eth. Plus you need to make an investment to run your own a validator.
    - Anon1096 4y ago
      32 eth is such a small investment that it isn't that meaningfully different than 1 eth.
      - pawelduda 4y ago
        Yeah, taking $4k (price it reached in the recent bull market). $4k vs $128k Literally the same numbers.
        SilasX 4y ago
TakeBlaster16 4y ago
I think it will become centralized, but not in the way that you think. We're likely to see base-layer transaction censorship, since nodes are no longer allowed to disagree with each other (or they'll be slashed), and far more than 33% of staked value is in the USA (and subject to OFAC compliance). I explained in more detail here: https://news.ycombinator.com/item?id=32532604 https://news.ycombinator.com/item?id=32532604
- spywaregorilla 4y ago
  Who gets to decide if something should be slashed
  - jsheard 4y ago
    It's determined by the majority of validators. There's two ways this can go - either the majority of validators enforce OFAC sanctions, effectively giving OFAC authority over the entire Ethereum network since validators who go against it will be slashed, or the majority of validators don't enforce sanctions, in which case validators with any presence in the US must put themselves in legal jeopardy to avoid getting slashed.
    - spywaregorilla 4y ago
      So if I acquire 51% of validation power, and you catch me cheating, the person who gets to decide if I get punished is me?
      - jsheard 4y ago
        Technically yes, but I think the idea is that it would be incredibly expensive and unproductive to pull off such an attack. You'd first have to acquire billions of dollars worth of Ethereum, and then launching that attack would torpedo any trust in the network and send the value of Ethereum to zero, lighting your billions of dollars on fire. The theory is that it's too expensive to realistically do for the lulz or out of spite, and it wouldn't make economic sense to do it for profit. As for how that theory will interact with reality, who knows.
miloignis 4y ago
Apologies if I get this incorrect, I'm an amateur, but I have read about the design - the slashers will likely be few and centralized, but that's not disastrous because the slashers must provide proof of wrong doing to cause someone's ETH to get "slashed". That is, they're likely to be centralized (though they don't have to be! I believe anyone can be one) but they have to prove to everyone that something should be slashed in order to do so, so you don't have to trust the centralized part. Does that make sense?
- spywaregorilla 4y ago
  > they have to prove to everyone that something should be slashed in order to do so Who is everyone? Because obviously it can't include the people who just colluded to deceive the network.
  - EddySchauHai 4y ago
    Wouldn't it be a percentage of the people? So > 51%?
    - spywaregorilla 4y ago
      But you already have 51% of people lying for their own benefit in this scenario.
- codegladiator 4y ago
  Sounds like the police. Also do they prove before or after slashing?
  - rictic 4y ago
    Prove in a machine legible sense, picture a transaction like: "here are two contradictory blocks validated by validator ABC, including ABC's signature, therefore ABC's stake is slashed". (at least, that's how it worked last time I looked into it)
- redox99 4y ago
deleted 4y ago
[deleted]
tsujp 4y ago
there's just a small number of validators, which is just going to be the ethereum foundation and friends. There are over 415 000 validators. See: https://beaconcha.in/ https://beaconcha.in/
- spywaregorilla 4y ago
  Read the edit. Slashers. Not validators.
  - tyrust 4y ago
    Any validator can run the slasher process. Docs from one of the validator clients: https://docs.prylabs.network/docs/prysm-usage/slasher https://docs.prylabs.network/docs/prysm-usage/slasher
olalonde 4y ago
Yes, it's incorrect to say that. Decentralisation is a spectrum and those extra steps are there for a reason. In terms of decentralisation, Ethereum probably sits somewhere between Bitcoin and Paypal.
seydor 4y ago
tangentially, how can one profit from ETH becoming more centralized?
drcode 4y ago
Totally wrong. Anybody has the ability to declare "the people with stakes did not validate correctly" In this context, what it means is that a person posted conflicting validation messages on different parts of the network, and anybody who can show the existence of two such conflicting messages can post it to the blockchain, receive a reward, and the offending validator gets slashed. (There are also other ways you can get slashed, read the POS documentation if you want to learn the details) All methods of slashing are fully decentralized.
- spywaregorilla 4y ago
  What if they then show bogus evidence
  - chizhik-pyzhik 4y ago
    There's no such thing as bogus evidence. Block signatures are validated cryptographically
    - spywaregorilla 4y ago
      But all evidence needs to be voted on. Even it's just a divine truth bool, the network still needs to vote on a consensus of whether or not it says TRUE. edit: for an example. you get hacked and lose $100M. You say fuck it, submit a slasher report that says it wasn't a valid transaction. you offer enough money to get x% of validators to agree with you. As far as I can tell, you cannot get slashed for your vote on a slash. So lying is ok.
      - Zamicol 4y ago
        If a network "votes down" cryptographic proof, that itself becomes cryptographic proof of dishonesty.
        spywaregorilla 4y ago
        And... so what? Is there a mechanism to punish validators for not being honest on slasher votes?
rglullis 4y ago
> I am talking about the class of people with the ability to declare that the people with stakes did not validate correctly and therefore lose their stakes. My understanding is that this is a very small number of people and is mostly just the ethereum foundation. There is no such thing as "separate slashers", and there is no such thing as distinct classes of validators. Whoever told you that is spreading baseless FUD.
remram 4y ago
I was always wondering about this. From the start it seemed like "blockchain" could be easily replaced by a few trusted validators run by independent organizations, the same way certificate transparency logs are operated, for example. The value in Bitcoin and proof-of-work was that everyone could contribute to the security of the log. As soon as mining pools appeared, and now even more with proof-of-stake, we are back with a few parties being the trusted validators. The fact that they get their powers from on-chain tokens rather than community decision... is it really a good thing?
johnnymorgan 4y ago
One way or another we are going to find out... What a time to be alive :) Whether the project dies or continues forward the innovation coming from the space is pretty amazing.
drog 4y ago
There is no designated class of slashers. Slashing is part of the protocol and to slash somebody you have to prove it to the protocol that they broke rules of slashing. One of the rules is that you can't create two different blocks in the same slot (block number) i.e. you can't deliberately fork. There is a designated place in the block of the beacon chain where you can put signatures of the different blocks in the same slot as a proof and nodes will slash validator that produced that signatures (update his balance). Anyone can find these signatures, and block proposers of the new blocks will include them into the chain.
- 3np 4y ago
  Thank you. Given all the other radical changes in PoS plans that have slipped by during the years, that one threw me off (:
- usrusrusrusr 4y ago
  >There is no designated class of slashers. Not true. In your defence, I also only learned this today. https://docs.prylabs.network/docs/prysm-usage/slasher https://docs.prylabs.network/docs/prysm-usage/slasher https://lighthouse-book.sigmaprime.io/slasher.html https://lighthouse-book.sigmaprime.io/slasher.html
  - 735409264082 4y ago
    Your links contradicts your statement. It's absolutely true that there is no designated class of slashers. Who do you think designates slashers? Anyone can be a slasher, just as anyone can be a staker (as long as you have 32 Ether).
  - darawk 4y ago
    Your links do not say that there is a designated class of slashers. They just say that it is resource intensive relative to its rewards, so not everyone will want to be one. Anyone who chooses to, however, can be one.
  - drog 4y ago
    I know about that but thanks for your comment - I’ll clarify what I mean. It’s just the specifics of how this works - slashing is part of the protocol in the sense that I described: when you are chosen to create a new block and you have proof that someone violated the rules then you include this proof in your proposed block and update balance. Any validator can do it including the smallest of home stakers. More details here. https://github.com/ethereum/annotated-spec/blob/master/phase0/beacon-chain.md#beaconblockbody https://github.com/ethereum/annotated-spec/blob/master/phase... Here we have slashing fields in the block body where you insert your proofs of slashable offense. There are functions with a “slash” in the name that describes precise state transition. The hard part of slashing is finding these proofs because you have to do more work than necessary to detect slashing and produce proofs - that’s what this software does. It’s more expensive to run a slasher but you need only one and it does not matter who runs it, anyone can run it. The link that you sent says that this slasher broadcasts proofs by default - that way anyone can include it.
davidgerard 4y ago
> Is it incorrect to say that ethereum is now entirely centralized with some extra steps? no, that's right. It's now a chain where you make money (fresh coins) by a procedure controlled by the Ethereum Foundation. What happens if something goes fatally wrong? The EF will step in and fix it. This has (for a few years now) raised serious questions as to whether the new network will constitute an offering of securities - EF sets rules to run a validator and get paid in ETH.
anderspitman 4y ago
As an outside observer, my biggest takeaway from the threads here is that apparently the Ethereum devs have managed to create a technology so complicated that proponents can't concisely explain why it works and detractors can't explain why it doesn't.
- codeflo 4y ago
  As Tony Hoare already wrote in the 80s: “There are two ways of constructing a software design. One way is to make it so simple that there are obviously no deficiencies. And the other way is to make it so complicated that there are no obvious deficiencies.”
- rcxdude 4y ago
  To be fair, you'll find the same problem with PoW, except people are more confident in their misunderstandings.
- DSMan195276 4y ago
  I feel like PoS has always had this problem, it will be interesting to see how this goes. Certainly PoW has some hairy details as well, but the backbone of "you can only run computations so fast" makes it simpler to reason about. The question being asked is also a harder one to answer than just explaining PoS. Similar to a PoW scheme where only one or two people control all of the hashing power, it could be decentralized in theory but not actually in practice, and it doesn't seem like there are any super hard numbers on this aspect.
- AgentME 4y ago
  The previous post is completely making up the concept of slashers being an exclusive role. People should not be coming to any conclusions from a thread that starts off so wildly disconnected from reality.
- serverholic 4y ago
  Please explain the tcp/ip protocol or the paxos algorithm concisely.
Baopab 4y ago
pkulak 4y ago
Wait, I'm confused. Why exactly is this low-effort FUD post pinned to the top?
drawingthesun 4y ago
Not sure how Ethereum does it, but on Tezos any node can submit proof another node has misbehaved and be awarded a certain amount of the misbehaving nodes deposit. All of this works via code and no human intervention is needed. I assume Ethereum has something similar, as there isn’t much gain in restricting those who are allowed to submit a proof that a node/validator is up to no good.

JohnJamesRambo 4y ago

Yes it is incorrect. https://i.redd.it/5lhlmwdg27j91.png https://i.redd.it/5lhlmwdg27j91.png Ethereum will be more decentralized after proof of stake. No longer do you need massive amounts of electricity and insider access to gpu or asic manufacturers.

luma 4y ago
Instead you just need a massive amount of eth
- Zamicol 4y ago
  Wouldn't those with ownership in a system be best trusted with the self-interest of such a system? That seems to be the best alignment of incentives.
  - luma 4y ago
    Sure, and Regular Money is best governed by billionaires. Incentives line up nicely if you're already rich.
  - AlexandrB 4y ago
    What was the point of BTC and ETH then? We already have the system you describe with fiat currency and traditional banks.
    - landemva 4y ago
      There are additional goals including in part censorship resistance and it can't be seized without the keys.
    - 735409264082 4y ago
      32 Ether or mining equipment is nothing compared to what you need to have any real influence over fiat money.
spywaregorilla 4y ago
This is not the question I am asking. You can have many people putting up their 32 ETH. Sure that's "decentralized". But what if most of the stakers collude to double spend tokens? My understanding is that there is an additional layer of validators that have the power to force them to give up their stake as a penalty. Hence "proof of stake". And that there are very few validators. And it's really just the ethereum foundation.
- zaptrem 4y ago
  You’re mistaken, validators and stakers are one and the same. A 51% attack becomes unbelievably more expensive in a proof of stake system, especially because at the end of it all of your money is burned (whereas with POW you get to keep the GPUs unless they change the algo).
  - spywaregorilla 4y ago
    stakers/validators vs. slashers
    - PretzelPirate 4y ago
      There is no defined role called a “slasher”. There are randomly-decided committees that are regularly updated as part of Ethereum PoS consensus that play different roles. Your validator could be in any one of those roles (or in a pending state) at any time.
      - spywaregorilla 4y ago
        I'm almost certain that is incorrect. This is an optional, expensive seeming process. e.g. https://docs.prylabs.network/docs/prysm-usage/slasher https://docs.prylabs.network/docs/prysm-usage/slasher
        deleted 4y ago
        [deleted]
Anunayj 4y ago
It should however be noted that Ethereum had a ICO [1] on launch, where you could buy ethereum for a particular price. 9.9% percentage of that also was set aside for "founders". (it could however be more [2]) Today it accounts for something like 59% (72m) of total supply (~120m). Make what you will of that. 1. https://www.gemini.com/cryptopedia/initial-coin-offering-explained-ethereum-ico https://www.gemini.com/cryptopedia/initial-coin-offering-exp... 2. https://medium.com/@hasufly/ethereum-presale-dynamics-revisited-c1b70ac38448 https://medium.com/@hasufly/ethereum-presale-dynamics-revisi...
- xur17 4y ago
  > 9.9% percentage of that also was set aside for "founders" > Today it accounts for something like 59% of total supply. Make what you will of that. Can you help me understand what exactly this means? Ethereum's supply has grown since the presale, so if anything the 9.9% should have gotten smaller since then.
  - Anunayj 4y ago
    Oh, I was a bit unclear there. The 9.9% was of the total money that was raised in the ICO (60m) and ended up being ~5.9m. The total initial premine was 72m (~59% of today's supply). I think someone more knowledgeable might provide a better breakdown of those funds, except that the article(s) linked covers it a lot better than my comment.
    - gnramires 4y ago
      Since this "premine" (the 59%) was really a token sale, I don't think it's too problematic (mining is buying tokens with electricity/hardware).
  - bhaak 4y ago
    OP has provided the right links but either misunderstood the text or phrased it very confusingly. https://messari.io/asset/ethereum/profile/launch-and-initial-token-distribution https://messari.io/asset/ethereum/profile/launch-and-initial... Ethereum's crowdsale supply was 72 million ETH. Of that 60 million were sold for BTC in the crowdsale. 6 million was given to the Ethereum Foundation and 6 million to early contributors (overall 20% of what was sold was created as a pre-mine). Now Ethereum's supply is ~122 million, so the miners produced 50 millions new ETH.
Zamicol 4y ago
1. Energy production and 2. specialized chip production are both centralized, with the later being highly centralized. The move to PoS removes both of these centralized targets.
falcolas 4y ago
> No longer do you need massive amounts of electricity and insider access to gpu or asic manufacturers. No, you just need money, 32 eth is only around $50000. And there's a lot of people with sufficient money to stand up multiple validators. And validators can also initiate/vote on arbitrary slash requests (which costs them nothing, as I read it).
- onlyrealcuzzo 4y ago
  Sounds like an improvement to burning an entire country's worth of electricity...
  - falcolas 4y ago
    There's a tradeoff. We need to acknowledge the tradeoff, and be prepared for the folks who just want to watch the world burn, and have the money to do so.
- newsclues 4y ago
  As a not well off person with a gaming computer with power included in my rent, I don’t have 50,000$. Shrinking the number of people with the financial means to contribute doesn’t seem like it’s going to result in decentralization.
  - sebzim4500 4y ago
    Right but you can't afford to buy ASICs either so from your point of view the situation hasn't really changed. The chance of you ever being able to mine an ETH block with your gaming PC is negligable.
    - newsclues 4y ago
      I’ve made .2 eth in under a year.

jjulius 4y ago

I have been wondering the same thing about this, too. I'm fairly eye-rolly when it comes to crypto and such, so I'd be curious to see if this take is accurate or not.

thebeastie 4y ago

No, the validators are anyone with a stake in the system, not just the Ethereum foundation and friends.

spywaregorilla 4y ago
Not the people putting up the stake. The people with the power to declare them liars who lose their stake.
IHLayman 4y ago
But, a stake has to be at least 32 ETH, where at $1650/ETH lands you at $52,800. So, the validators have to have a significant investment in the platform, more than your average investor, and far more than anyone simply owning ETH. While I don't necessarily agree with the centralization arguments, I do agree that it is a far smaller group of people than you'd think.
- bowsamic 4y ago
  $52,800 is a pittance compared to any remotely significant mining operation
  - shudza 4y ago
    you don't need mining equipment to validate transactions on bitcoin, nor do you need to own it. With ETH, you need to own 32 ETH, obviously.
    - exo762 4y ago
      There is a confusion in language used. Bitcoin has two types of actors: block consumers and block producers. Ethereum has three types of actors: block consumers, validators and block producers. Thing often described as "full node" does just that - it consumes blocks, checking if blocks are valid. Ethereum validators are different, they not only consume blocks, they also attest their correctness for the rest of the network.

dmichulke 4y ago

Let's say it like this: In the near future the rules are made by the people with the most ETH and soon after the most ETHs will be earned by the people who make the rules.

tylersmith 4y ago
That's not true. Stakers don't make the rules any more than miners make Bitcoin rules.
- eterm 4y ago
  Miners do make Bitcoin rules though, the entire protocol is a consensus protocol driven by the miners.
  - tromp 4y ago
    Wrong; if miners deviate from the rules, then their blocks are simply ignored by everyone else.
    - Spivak 4y ago
      If a group of miners with minority compute power deviate from the rules they are ignored. If a group of miners with majority of compute power deviate from the rules, they become the rules. This process is how all changes to Bitcoin get rolled out.
      - garydevenay 4y ago
        The rules of the Bitcoin network are not validated by miners, they are validated by nodes. The miners have no control over nodes and unless their mining work is accepted by the consensus rules of the nodes they receive no mining reward.
        Spivak 4y ago
        Miners and nodes have to be in agreement, when they're not you're right they've essentially fork BTC but I think you're wrong about who really holds the power and which chain would end up being the authoritative one after such an event.

potatototoo99 4y ago

Yes, it is correct. It was already much more centralized than for instance bitcoin, due to the difficulty in having a validator node, but now it is just managed by the big holders and that's that. Furthermore, they will censor transactions according to US laws at least, and if you try to validate and not censor, you will get your staked coins taken from you by the protocol (as opposed to PoW, where you just fail to get your block in the chain), so this is another nail in the coffin of this project imo.

bowsamic 4y ago
No, it's the opposite. Proof of work is more centralised than proof of stake, because the former has an economy of scale: it's cheaper to add a single miner if you are a big mining operation vs a small mining operation. On the other hand, staking 1 eth is always staking 1 eth.
- deleted 4y ago
  [deleted]
- zyphr 4y ago
  You can't stake 1 eth yourself. You need to at least 32 eth. Plus you need to make an investment to run your own a validator.
  - Anon1096 4y ago
    32 eth is such a small investment that it isn't that meaningfully different than 1 eth.
    - pawelduda 4y ago
      Yeah, taking $4k (price it reached in the recent bull market). $4k vs $128k Literally the same numbers.
      - SilasX 4y ago

TakeBlaster16 4y ago

I think it will become centralized, but not in the way that you think. We're likely to see base-layer transaction censorship, since nodes are no longer allowed to disagree with each other (or they'll be slashed), and far more than 33% of staked value is in the USA (and subject to OFAC compliance). I explained in more detail here: https://news.ycombinator.com/item?id=32532604 https://news.ycombinator.com/item?id=32532604

spywaregorilla 4y ago
Who gets to decide if something should be slashed
- jsheard 4y ago
  It's determined by the majority of validators. There's two ways this can go - either the majority of validators enforce OFAC sanctions, effectively giving OFAC authority over the entire Ethereum network since validators who go against it will be slashed, or the majority of validators don't enforce sanctions, in which case validators with any presence in the US must put themselves in legal jeopardy to avoid getting slashed.
  - spywaregorilla 4y ago
    So if I acquire 51% of validation power, and you catch me cheating, the person who gets to decide if I get punished is me?
    - jsheard 4y ago
      Technically yes, but I think the idea is that it would be incredibly expensive and unproductive to pull off such an attack. You'd first have to acquire billions of dollars worth of Ethereum, and then launching that attack would torpedo any trust in the network and send the value of Ethereum to zero, lighting your billions of dollars on fire. The theory is that it's too expensive to realistically do for the lulz or out of spite, and it wouldn't make economic sense to do it for profit. As for how that theory will interact with reality, who knows.

miloignis 4y ago

Apologies if I get this incorrect, I'm an amateur, but I have read about the design - the slashers will likely be few and centralized, but that's not disastrous because the slashers must provide proof of wrong doing to cause someone's ETH to get "slashed". That is, they're likely to be centralized (though they don't have to be! I believe anyone can be one) but they have to prove to everyone that something should be slashed in order to do so, so you don't have to trust the centralized part. Does that make sense?

spywaregorilla 4y ago
> they have to prove to everyone that something should be slashed in order to do so Who is everyone? Because obviously it can't include the people who just colluded to deceive the network.
- EddySchauHai 4y ago
  Wouldn't it be a percentage of the people? So > 51%?
  - spywaregorilla 4y ago
    But you already have 51% of people lying for their own benefit in this scenario.
codegladiator 4y ago
Sounds like the police. Also do they prove before or after slashing?
- rictic 4y ago
  Prove in a machine legible sense, picture a transaction like: "here are two contradictory blocks validated by validator ABC, including ABC's signature, therefore ABC's stake is slashed". (at least, that's how it worked last time I looked into it)
redox99 4y ago

deleted 4y ago

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tsujp 4y ago

there's just a small number of validators, which is just going to be the ethereum foundation and friends. There are over 415 000 validators. See: https://beaconcha.in/ https://beaconcha.in/

spywaregorilla 4y ago
Read the edit. Slashers. Not validators.
- tyrust 4y ago
  Any validator can run the slasher process. Docs from one of the validator clients: https://docs.prylabs.network/docs/prysm-usage/slasher https://docs.prylabs.network/docs/prysm-usage/slasher

olalonde 4y ago

Yes, it's incorrect to say that. Decentralisation is a spectrum and those extra steps are there for a reason. In terms of decentralisation, Ethereum probably sits somewhere between Bitcoin and Paypal.

seydor 4y ago

tangentially, how can one profit from ETH becoming more centralized?

drcode 4y ago

Totally wrong. Anybody has the ability to declare "the people with stakes did not validate correctly" In this context, what it means is that a person posted conflicting validation messages on different parts of the network, and anybody who can show the existence of two such conflicting messages can post it to the blockchain, receive a reward, and the offending validator gets slashed. (There are also other ways you can get slashed, read the POS documentation if you want to learn the details) All methods of slashing are fully decentralized.

spywaregorilla 4y ago
What if they then show bogus evidence
- chizhik-pyzhik 4y ago
  There's no such thing as bogus evidence. Block signatures are validated cryptographically
  - spywaregorilla 4y ago
    But all evidence needs to be voted on. Even it's just a divine truth bool, the network still needs to vote on a consensus of whether or not it says TRUE. edit: for an example. you get hacked and lose $100M. You say fuck it, submit a slasher report that says it wasn't a valid transaction. you offer enough money to get x% of validators to agree with you. As far as I can tell, you cannot get slashed for your vote on a slash. So lying is ok.
    - Zamicol 4y ago
      If a network "votes down" cryptographic proof, that itself becomes cryptographic proof of dishonesty.
      - spywaregorilla 4y ago
        And... so what? Is there a mechanism to punish validators for not being honest on slasher votes?

rglullis 4y ago

> I am talking about the class of people with the ability to declare that the people with stakes did not validate correctly and therefore lose their stakes. My understanding is that this is a very small number of people and is mostly just the ethereum foundation. There is no such thing as "separate slashers", and there is no such thing as distinct classes of validators. Whoever told you that is spreading baseless FUD.

remram 4y ago

I was always wondering about this. From the start it seemed like "blockchain" could be easily replaced by a few trusted validators run by independent organizations, the same way certificate transparency logs are operated, for example. The value in Bitcoin and proof-of-work was that everyone could contribute to the security of the log. As soon as mining pools appeared, and now even more with proof-of-stake, we are back with a few parties being the trusted validators. The fact that they get their powers from on-chain tokens rather than community decision... is it really a good thing?

johnnymorgan 4y ago

One way or another we are going to find out... What a time to be alive :) Whether the project dies or continues forward the innovation coming from the space is pretty amazing.

drog 4y ago

There is no designated class of slashers. Slashing is part of the protocol and to slash somebody you have to prove it to the protocol that they broke rules of slashing. One of the rules is that you can't create two different blocks in the same slot (block number) i.e. you can't deliberately fork. There is a designated place in the block of the beacon chain where you can put signatures of the different blocks in the same slot as a proof and nodes will slash validator that produced that signatures (update his balance). Anyone can find these signatures, and block proposers of the new blocks will include them into the chain.

3np 4y ago
Thank you. Given all the other radical changes in PoS plans that have slipped by during the years, that one threw me off (:
usrusrusrusr 4y ago
>There is no designated class of slashers. Not true. In your defence, I also only learned this today. https://docs.prylabs.network/docs/prysm-usage/slasher https://docs.prylabs.network/docs/prysm-usage/slasher https://lighthouse-book.sigmaprime.io/slasher.html https://lighthouse-book.sigmaprime.io/slasher.html
- 735409264082 4y ago
  Your links contradicts your statement. It's absolutely true that there is no designated class of slashers. Who do you think designates slashers? Anyone can be a slasher, just as anyone can be a staker (as long as you have 32 Ether).
- darawk 4y ago
  Your links do not say that there is a designated class of slashers. They just say that it is resource intensive relative to its rewards, so not everyone will want to be one. Anyone who chooses to, however, can be one.
- drog 4y ago
  I know about that but thanks for your comment - I’ll clarify what I mean. It’s just the specifics of how this works - slashing is part of the protocol in the sense that I described: when you are chosen to create a new block and you have proof that someone violated the rules then you include this proof in your proposed block and update balance. Any validator can do it including the smallest of home stakers. More details here. https://github.com/ethereum/annotated-spec/blob/master/phase0/beacon-chain.md#beaconblockbody https://github.com/ethereum/annotated-spec/blob/master/phase... Here we have slashing fields in the block body where you insert your proofs of slashable offense. There are functions with a “slash” in the name that describes precise state transition. The hard part of slashing is finding these proofs because you have to do more work than necessary to detect slashing and produce proofs - that’s what this software does. It’s more expensive to run a slasher but you need only one and it does not matter who runs it, anyone can run it. The link that you sent says that this slasher broadcasts proofs by default - that way anyone can include it.

davidgerard 4y ago

> Is it incorrect to say that ethereum is now entirely centralized with some extra steps? no, that's right. It's now a chain where you make money (fresh coins) by a procedure controlled by the Ethereum Foundation. What happens if something goes fatally wrong? The EF will step in and fix it. This has (for a few years now) raised serious questions as to whether the new network will constitute an offering of securities - EF sets rules to run a validator and get paid in ETH.

anderspitman 4y ago

As an outside observer, my biggest takeaway from the threads here is that apparently the Ethereum devs have managed to create a technology so complicated that proponents can't concisely explain why it works and detractors can't explain why it doesn't.

codeflo 4y ago
As Tony Hoare already wrote in the 80s: “There are two ways of constructing a software design. One way is to make it so simple that there are obviously no deficiencies. And the other way is to make it so complicated that there are no obvious deficiencies.”
rcxdude 4y ago
To be fair, you'll find the same problem with PoW, except people are more confident in their misunderstandings.
DSMan195276 4y ago
I feel like PoS has always had this problem, it will be interesting to see how this goes. Certainly PoW has some hairy details as well, but the backbone of "you can only run computations so fast" makes it simpler to reason about. The question being asked is also a harder one to answer than just explaining PoS. Similar to a PoW scheme where only one or two people control all of the hashing power, it could be decentralized in theory but not actually in practice, and it doesn't seem like there are any super hard numbers on this aspect.
AgentME 4y ago
The previous post is completely making up the concept of slashers being an exclusive role. People should not be coming to any conclusions from a thread that starts off so wildly disconnected from reality.
serverholic 4y ago
Please explain the tcp/ip protocol or the paxos algorithm concisely.

Baopab 4y ago

pkulak 4y ago

Wait, I'm confused. Why exactly is this low-effort FUD post pinned to the top?

drawingthesun 4y ago

Not sure how Ethereum does it, but on Tezos any node can submit proof another node has misbehaved and be awarded a certain amount of the misbehaving nodes deposit. All of this works via code and no human intervention is needed. I assume Ethereum has something similar, as there isn’t much gain in restricting those who are allowed to submit a proof that a node/validator is up to no good.