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I find proof of stake to be ironic. Isn't the entire point of cryptocurrency to remove the centralization of power? Proof of stake is just an admission that tho
by endisneigh 4y ago
I find proof of stake to be ironic. Isn't the entire point of cryptocurrency to remove the centralization of power? Proof of stake is just an admission that those who have more, get more. Power waste aside, I find the purity of PoW and Bitcoin to be superior in fulfilling the nebulous goals of crypto.
- dahdum 4y agoPoW is much the same, those with more capex and opex for compute and power earn more. PoS cuts the opex, and makes the capex fungible.
- wyager 4y agoThe opex is the part that tethers on-chain security to reality.
- operator-name 4y agoCan you elaborate on why you think this is the case?
- themoonisachees 4y agoStealing private keys (through whatever means) is considerably easier than stealing a comparable amount of mining hardware then running it. It's not that big of a risk in reality of course, but there is still a considerable amount of security provided by the fact that obtaining enough compute for a 50% attack is harder than obtaining enough eth to do the same.
- wyager 4y agoKey phrase to search - "nothing at stake problem"
- operator-name 4y agoFor the most part ethereum doesn't suffer from this issue.
- wyager 4y agoEth's work-arounds all involve centralization. If you want decentralized security, you need real physical opex.
- operator-name 4y agoYes, I'm not denying that. The question was why "opex is the part that tethers on-chain security to reality", and opex specifically.
- wyager 4y agoOpex specifically because we don't have a predicative algorithm for proving capex. The only predicative value-proof algorithm we have is PoW, which works on opex. PoS is completely impredicative.
- exo762 4y agoWhat centralization? Adherence to protocol rules? How requirement of locking down 32ETH is different from requirement to run ASIC that does two rounds of SHA256? Please don't throw around buzzwords.
- wyager 4y agoThe slashing enforcement mechanism introduces centralization; it has to, to work around nothing-at-stake. I'm not throwing around buzzwords. Please don't accuse people of that without sufficient understanding to be reasonably confident you're correct. > locking down 32ETH is different from requirement to run ASIC This is precisely the opex-vs-capex distinction we are discussing in this thread. 32eth is strict capex. ASIC capex <<< power opex.
- Gigachad 4y agoIt just short circuits the ewaste step really. Those with the most money could buy the most mining hardware so the result was the same
- lawn 4y agoNot exactly though. With POW you need to make a sizeable investment, and hope you'll get a good return eventually. With POS you can keep your money and do it almost for free (as long as you run a node, not that big of a deal). So exchanges will completely dominate staking, but they likely not even touch POW mining.
- hestefisk 4y ago“Fungible” capex? What does that mean?
- themoonisachees 4y agoCapex in PoW is non-fungible by virtue of being spent in hardware, physical equipment, whereas staking means 32 eth is 32 eth regardless of hardware
- nsoonhui 4y agoWhat is really hilarious is that when you point out this to the ETH supporters, they will say that Bitcoin is even more centralized comparatively because the barrier to entry is higher blah blah. So much for the decentralization idealogy.
- xani_ 4y agoIt's just that mask fell off completely. People should've got a clue when Ethereum forked the chain because it turned out the "immutable" smart contract had bugs and it lost the money of important people
- arcticbull 4y agoTrustless for thee but none for me thanks. I still can't believe anyone uttered the phrase 'code is law' unironically again after the ETH/ETC fork. After all, Vitalik effectively said he didn't care if your grandma's life savings got stolen, that's decentralization - but when it happens to the important people, well, it's time to have a come to Jesus and fork the chain.
- MomoXenosaga 4y agoWhen crypto currency companies started to raise billions from the markets and have Superbowl commercials just like normal banks I knew the anarchist libertarian Cyberpunk experiment was subverted.
- rchaud 4y agoHey, if I'm targeting my product at iconoclastic free thinkers, I can't go wrong with a Superbowl ad!
- em_te 4y agoForking requires consensus among the decentralized miners. If the majority of the minors didn't agree to fork, they wouldn't have been able to fork the chain.
- arcticbull 4y agoAnyone can fork any chain, nothing more than a single miner is required on the new chain. In fact the pre-rollback chain lives on as ETC. A parallel universe where code actually was law. One entity decided they were sad about code being law and decided to roll back the outcome of a faithfully executed smart contract using their influence. When one person can influence enough miners to make it the principle chain simply to undo what is in their opinion an outcome they disliked, that's centralization. Or at least a plutocracy. Today that power rests principally with Jeremy Allaire since of course only one chain can represent the real world dollars in his bank account (USDC).
- chrisco255 4y agoThe point is to make a credibly neutral network, yes. You don't get more for free, you get more by locking up and risking your capital in a validator for defending the network. You risk getting slashed for doing that incorrectly or maliciously. So no, nothing has changed with regards to Proof of Stake except that validators aren't performing throwaway hash calculations at the cost of massive amounts of electricity for rewards.
- Melatonic 4y agoThis makes sense. I have not seen anyone else explain it so succinctly. It seems like then from a logical perspective we are shifting the capital needed to be a validator from investment in GPU/ASIC, computing power, and energy to just actual direct investment of those same types of funds? Basically instead of using money to buy all of the above you just directly invest the money itself. Which is the Stake?
- chrisco255 4y agoExactly.
- arcticbull 4y agoTaken to its conclusion, PoW and PoS are exactly the same. In a PoW environment you can take some of your coins, 'stake' them by buying a share in a mining pool, and then 'un-stake' them by selling your share in the mining pool. The only difference is how much coal is burned and e-waste is generated along the way. In both cases control and reward go to those with the most resources to deploy within said system.
- cesarb 4y ago> Taken to its conclusion, PoW and PoS are exactly the same. > In a PoW environment you can take some of your coins, 'stake' them by buying a share in a mining pool [...] Playing devil's advocate: there's a small but important difference in that, for PoW, you can "stake" coins from outside the system (for instance, by buying an ASIC miner with real money), while for PoS, the coins you "stake" must come from within the system itself. That is, PoS is a closed system.
- totony 4y agoYou can buy GPUs/ASICs with $, so can you buy coins with $. PoS is as "open" as PoW, except the means of exchange is different. For PoW, you convert electricity (capital) into coins, whereas PoS you convert money (capital) into coins.
- arcticbull 4y agoSmall quibble but broadly agree. In PoW you convert capital into electricity which then gets converted into coins. In PoS you convert capital into coins which then gets converted into more coins. Same starting material, same ending material, different intermediate steps. That's why my argument is that they're basically the same at the limit.
- landemva 4y agoPoW is an openly leaking system that requires participants to leak system value to external ASIC producers and external electricity producers. The PoS system keeps value in the system. PoS also has more ability to reduce influence of malicious miners/validators by slashing what is needed for a bad validator to continue to participate.
- abdullahkhalids 4y agoLet's try to define power here. * There is the power for some central entity to control the levers on the money supply: determine how much money gets printed, what the interest rate is, what sort of inflation rate is acceptable etc. * There is the oligoplic power of banks which determine who gets to have a bank account, how much and at what rate credit is available to which people, what sort of money transfers are acceptable. * There is the political power that people with lots of money command. They determine who gets elected, which laws are passed, whether they can be prosecuted or not, whose life they can destroy on whim etc. I think Satoshi's original conception might have been to democratize the first two kinds of power. Early cryptocurrency idealist probably dreamed of getting rid of all three types of power. I think right now, only the first one is indeed getting democratized in the sense that people can choose to "support" the cryptocurrency which they like. This is true for both PoS and PoW. With the rise of regulated cryptoexchanges owned by rich people, the second type of power continues to be centralized in both PoS and PoW. And of course, there was very little threat of the third type of power ever being challenged by cryptocurrency - that's a property of our political systems, not of the type of money we use.
- fezfight 4y agoBitcoin doesn't require centralised exchanges to function, though. It's not fundamental to the coin. Is the etherium PoS centralisation required?
- idiotsecant 4y agoNeither Bitcoin or Ethereum require a centralized exchange. What are you trying to ask her?
- fezfight 4y agoFor them to elaborate on their claim of equivalency between PoS and PoW centralisation, given the exchange centralisation isn't actually an issue. To me, it would seem that the ETH PoS centralisation of power (to the already wealthy) makes it less free than, for example, BTC. But I don't know, and I'd like to hear what they think. You too, if you'd like to offer your thoughts.
- JumpCrisscross 4y ago> Isn't the entire point of cryptocurrency to remove the centralization of power? I’ve previously said difference between crypto and traditional rails isn't decentralization. It's eager evaluation. The blockchain is always current everywhere. Bank records are not. The latter is computationally cheaper, but at the cost of more error. Centralized banking would involve everyone having an account at the Fed. In the Roman Republic, voting power was directly linked to wealth. Keeping tabs on who was how wealthy were the censors [1]. PoW is sort of like that, but eagerly evaluated. [1] https://en.m.wikipedia.org/wiki/Roman_censor https://en.m.wikipedia.org/wiki/Roman_censor
- endisneigh 4y agoIf consistency is the only requirement fueling crypto, why not just use an ACID, CP database?
- JumpCrisscross 4y ago> consistency is the only requirement fueling crypto, why not just use an ACID, CP database? Blockchains provide cheaply-verified consistency.
- endisneigh 4y agoYou have to pay many orders of magnitude more than simply using a database. In what way is it cheap? And, to what end? What [legal] problems can you solve with crypto that you cannot with a database?
- GauntletWizard 4y agoIf they wanted a simple, verifiable database, a public Merkel tree would suffice. A Git Repository with a list of balances would be more than sufficient, and verification of proof would be as simple as "walk the tree backwards" and verifying that they all summed up correctly at each step, plus some signatures required to touch your account negatively. Bitcoin has never been about proof and verification; it's always been about the decentralized claim, but mostly as an excuse to give it a reason to exist.
- nthacker 4y ago"How do we know that the Bible is true? Well we know that the Bible is true...because the Bible tells us so" The circular logic of PoS: 1. The list of valid transactions determines who has coin. 2. People with coin decide which transactions are valid. 3. GOTO 1 https://github.com/stickfigure/blog/wiki/Proof-Of-Stake-Wears-No-Clothes https://github.com/stickfigure/blog/wiki/Proof-Of-Stake-Wear...
- TrainedMonkey 4y agoModern society is built upon shared beliefs. Dollar has value because people believe it to be so. People go to work because they believe dollar will have value in part because other people believe the same things. Comparison to circular logic is quite apt, but it applies to most of the modern wold.
- nthacker 4y agobitcoin doesnt suffer this because proof of work provides an independent method for verification. the energy utilization argument that comes up should be evaluated in the context of the comparison of this independent humanless verification vs proof-of-stake or other shared or trusted mechanisms
- abdullahkhalids 4y agoVitalik just replied to this a few days ago https://twitter.com/VitalikButerin/status/1566073164093726720 https://twitter.com/VitalikButerin/status/156607316409372672... > Because it's not a circular argument, it's a spiral argument. People with coins at time T secure the transactions at time T+1. > Spiral arguments and circular arguments sometimes look similar to untrained observers, but they are fundamentally different.
- nthacker 4y agoThis is obviously worse because future transactions depend on people with coins in the past
- imtringued 4y ago
- Synaesthesia 4y agoWell sure but how has even traditional cryptocurrency removed the centralisation of power? It hasn’t, so yes I’m even less optimistic than you are about this.
- imtringued 4y agoI agree. The only way we could possibly use cryptocurrency for decentralization is by having every country or region run their own.
- imtringued 4y agoYou are right but I have seen some reward algorithms that should result in more fairness https://arxiv.org/abs/1809.07468 https://arxiv.org/abs/1809.07468 https://www.sciencedirect.com/science/article/abs/pii/S0020025520302784 https://www.sciencedirect.com/science/article/abs/pii/S00200...
- MomoXenosaga 4y agoCentralisation of power is inevitable. With banking it's even desirable.
- jrm4 4y agoThis is a good objection, and I think of parallel concepts, e.g. email. I think there is at least an argument that you don't need complete decentralization if you have federation. That being said, as we watch email consolidate, it is a thing you have to work to preserve.