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Yet Ethereum is pretty centralized with stuff like the premine, and it's even more centralized with ETH 2.0, the Merge, which moves it to Proof-Of-Stake. Now, t

Yet Ethereum is pretty centralized with stuff like the premine, and it's even more centralized with ETH 2.0, the Merge, which moves it to Proof-Of-Stake. Now, the richest (read: Vitalik and co) are the ones who can change the course of ETH. Well, they could before too with the hard fork but now they can do it even more so.

AgentME 4y ago
Validators in proof of stake have less control than miners had in proof of work. They don't control the rules, they just control the order transactions get into blocks. They can't even censor transactions unless a majority of validators/miners work together to do so. Unlike in proof of work, in proof of stake any validators that are seen attempting double-spending attacks can have their invested stake slashed; in proof of work, miners that attempt double-spend attacks don't lose their mining hardware and are free to continue attempting to manipulate the system.
- verdverm 4y ago
  What happens when 2/3 of the validators are run by companies who follow US financial rules and sanctions?
  - wmf 4y ago
    Number go up.
    - verdverm 4y ago
      Wallets get blocked, people get banned, KYC4ETH
- mccorrinall 4y ago
  While validators can’t censor, they can play both sides: Nothing at stake is still not solved on ETH.
  - AgentME 4y ago
    The nothing-at-stake problem was solved many years ago by introducing slashing. The earliest proof of stake systems did not have slashing (they did not actually put validators' funds "at stake"; the use of the word "stake" wasn't so literal yet) and were vulnerable to the nothing-at-stake problem because of that. A decent write-up: https://medium.com/coinmonks/understanding-proof-of-stake-the-nothing-at-stake-theory-1f0d71bc027 https://medium.com/coinmonks/understanding-proof-of-stake-th...
    - mccorrinall 4y ago
      And this slashing process does not solve the issue. Or well, it does, but it makes the whole system centralized and introduces a single point of trust. The bounty hunters, who find misbehaving validators which signed orphaned blocks, will slash the validators stake. But those bounty hunters are programs which are being run in Vitalik‘s basement. Not everyone will be able to run one like a normal validator. They are trusted entities within the network.
      - AgentME 4y ago
        Where did you get the idea that slashing is done by centralized/trusted bounty hunters? It's completely wrong and I'm not sure how someone could come to that idea in good faith. (Maybe you're misunderstanding some unrelated criticism made of an L2 system like Optimism from before it implemented fraud proofs?)
- ftlio 4y ago
  Miners in Proof of Work don’t control the rules. There have been multiple attempts to exercise hash power as political control in Bitcoin that have failed. There already exists precedent regarding the political power of running your own node with incredibly low capital requirements relative to mining. Ethereum is already in a battle over what consensus rules actually exist. Large scale staking enterprises such as exchanges are signaling their intent to follow extra-protocol conventions, and if they control a supermajority of staked ETH, they control the right to slash. The only way to have a voice in it is by acquiring $50,000 in ETH.
ChadNauseam 4y ago
From the article > There are also people who try to claim that PoS allows big stakeholders to control the protocol, but I think those arguments are just plain wrong. They rest on a misconception that PoW and PoS are governance mechanisms, when in reality they are consensus mechanisms. All they do is help the network agree on the right chain. A block that violates the protocol rules (eg. if it tries to print more coins than the protocol rules allow) will not be accepted by the network, no matter how many miners or stakers support it. Governance is a completely separate process, involving users freely choosing to download software, and BIPs and EIPs and all core devs calls and other bureaucracy to coordinate which changes get proposed. The funny thing is that bitcoiners (who tend to be the most pro-PoW) should understand this well, as the Bitcoin civil wars in 2017 demonstrated really well that miners are quite powerless in the governance process. In PoS, it's exactly the same; stakers don't choose the rules, they just execute the rules and help order transactions
- littlestymaar 4y ago
  He's right, PoS or PoW never were related to governance in Ethereum: the governance process has always been entirely controlled by the Ethereum foundation in a centralized way. but his argument about “bitcoin civil war”, is disingenuous at best, concluding that miners are “powerless” about governance process is really a strange way to analyze this event (which illustrated that they where not in fact “all powerful” which is quite different from being “powerless” …) He's also making a common, but misleading claim here: > A block that violates the protocol rules (eg. if it tries to print more coins than the protocol rules allow) will not be accepted by the network, no matter how many miners or stakers support it He's separating “miners and stackers” from “the network” which is a common position trope, but in reality a blockchain is a node of validators (miners, or stackers) with optional spectators, most of which don't even have enough data to take positions on whatever the validators are doing. Only the (scarce) full nodes can see that something fishy is happening, but they actually have no control on what happens on chain, all they can do is blow the whistle. What makes a blockchain work is the game theory incentives alignment which helps making sure miner/stakers don't collude together, not because “the network” (miners/stakers aside) can do anything to prevent malicious actions from a cartel of validators.

AgentME 4y ago

Validators in proof of stake have less control than miners had in proof of work. They don't control the rules, they just control the order transactions get into blocks. They can't even censor transactions unless a majority of validators/miners work together to do so. Unlike in proof of work, in proof of stake any validators that are seen attempting double-spending attacks can have their invested stake slashed; in proof of work, miners that attempt double-spend attacks don't lose their mining hardware and are free to continue attempting to manipulate the system.

verdverm 4y ago
What happens when 2/3 of the validators are run by companies who follow US financial rules and sanctions?
- wmf 4y ago
  Number go up.
  - verdverm 4y ago
    Wallets get blocked, people get banned, KYC4ETH
mccorrinall 4y ago
While validators can’t censor, they can play both sides: Nothing at stake is still not solved on ETH.
- AgentME 4y ago
  The nothing-at-stake problem was solved many years ago by introducing slashing. The earliest proof of stake systems did not have slashing (they did not actually put validators' funds "at stake"; the use of the word "stake" wasn't so literal yet) and were vulnerable to the nothing-at-stake problem because of that. A decent write-up: https://medium.com/coinmonks/understanding-proof-of-stake-the-nothing-at-stake-theory-1f0d71bc027 https://medium.com/coinmonks/understanding-proof-of-stake-th...
  - mccorrinall 4y ago
    And this slashing process does not solve the issue. Or well, it does, but it makes the whole system centralized and introduces a single point of trust. The bounty hunters, who find misbehaving validators which signed orphaned blocks, will slash the validators stake. But those bounty hunters are programs which are being run in Vitalik‘s basement. Not everyone will be able to run one like a normal validator. They are trusted entities within the network.
    - AgentME 4y ago
      Where did you get the idea that slashing is done by centralized/trusted bounty hunters? It's completely wrong and I'm not sure how someone could come to that idea in good faith. (Maybe you're misunderstanding some unrelated criticism made of an L2 system like Optimism from before it implemented fraud proofs?)
ftlio 4y ago
Miners in Proof of Work don’t control the rules. There have been multiple attempts to exercise hash power as political control in Bitcoin that have failed. There already exists precedent regarding the political power of running your own node with incredibly low capital requirements relative to mining. Ethereum is already in a battle over what consensus rules actually exist. Large scale staking enterprises such as exchanges are signaling their intent to follow extra-protocol conventions, and if they control a supermajority of staked ETH, they control the right to slash. The only way to have a voice in it is by acquiring $50,000 in ETH.

ChadNauseam 4y ago

From the article > There are also people who try to claim that PoS allows big stakeholders to control the protocol, but I think those arguments are just plain wrong. They rest on a misconception that PoW and PoS are governance mechanisms, when in reality they are consensus mechanisms. All they do is help the network agree on the right chain. A block that violates the protocol rules (eg. if it tries to print more coins than the protocol rules allow) will not be accepted by the network, no matter how many miners or stakers support it. Governance is a completely separate process, involving users freely choosing to download software, and BIPs and EIPs and all core devs calls and other bureaucracy to coordinate which changes get proposed. The funny thing is that bitcoiners (who tend to be the most pro-PoW) should understand this well, as the Bitcoin civil wars in 2017 demonstrated really well that miners are quite powerless in the governance process. In PoS, it's exactly the same; stakers don't choose the rules, they just execute the rules and help order transactions

littlestymaar 4y ago
He's right, PoS or PoW never were related to governance in Ethereum: the governance process has always been entirely controlled by the Ethereum foundation in a centralized way. but his argument about “bitcoin civil war”, is disingenuous at best, concluding that miners are “powerless” about governance process is really a strange way to analyze this event (which illustrated that they where not in fact “all powerful” which is quite different from being “powerless” …) He's also making a common, but misleading claim here: > A block that violates the protocol rules (eg. if it tries to print more coins than the protocol rules allow) will not be accepted by the network, no matter how many miners or stakers support it He's separating “miners and stackers” from “the network” which is a common position trope, but in reality a blockchain is a node of validators (miners, or stackers) with optional spectators, most of which don't even have enough data to take positions on whatever the validators are doing. Only the (scarce) full nodes can see that something fishy is happening, but they actually have no control on what happens on chain, all they can do is blow the whistle. What makes a blockchain work is the game theory incentives alignment which helps making sure miner/stakers don't collude together, not because “the network” (miners/stakers aside) can do anything to prevent malicious actions from a cartel of validators.