3 ms·

That was true with proof of work too. The merge doesn't change it.

once_inc 4y ago
In theory, yes. But in practice, most miners have joined a mining pool. Mining pools allow miners to share in the rewards, which means they have a vastly more predictable income per block. A solo miner would probably not have a statistically significant chance of finding a single block for the next 100 years, while pooled miners earn bitcoin through finding blocks roughly equivalent to the mining pools relative size compared with the total hash rate. Since mining is a cutthroat, bleeding edge, hypercompetitive system, that means dependability and stability are very important.
konschubert 4y ago
PoW was a system where you could buy lottery tickets by investing capital. PoS is the same, except it doesn’t ALSO burn electricity that needs to be paid for by parts of the mining rewards.
- bowsamic 4y ago
  PoW was worse because it had an economy of scale. For example, it is far cheaper to add mining power if you already own a big mining centre or buy ASICs in bulk. PoS does not have this: your rewards are always linear to the amount of ETH you stake. This means that, while PoS is still controlled by those with the most money, it does not trend to centralisation as harshly as PoW.
  - konschubert 4y ago
    Yes, that’s correct.
  - jcbrand 4y ago
    Pos is controlled by those with the most money, and they continuously gain more money through staking rewards (i.e. the rich control the system and automatically get richer). With PoW, you have to sell/spend some of the coins you earn in order to pay for operation expenditures. PoS is more centralizing.
    - bowsamic 4y ago
      That's the same in both cases. Both times you are turning money into more money. Literally the only difference is that in PoW you have external costs. But since these costs are physical and out of the scope of the chain, they do not scale linearly.
    - somebodythere 4y ago
      I don't see how it is beneficial to anyone (other than ASIC developers and energy companies) to build a tax paid to ASIC developers and energy companies into the protocol.
      - jcbrand 4y ago
        The energy expenditure anchors the money into the real world, making it a hard money like Gold, and it also facilitates decentralization. Energy is naturally decentralized all over the world. A "tax to energy companies" is a subsidy from the energy company's point of view. If you want more of something, subsidize it. A world with more energy is better than a world with less, as we're all in the process of relearning.
        bowsamic 4y ago
        There is no evidence that the exchange value of any PoW coin has anything to do with the energy used to mint it. In fact we have counter evidence, for example that there are PoS coins that have value
        jcbrand 4y ago
        You're arguing against a point I never made.
        bowsamic 4y ago
        I don't understand what you mean then
    - 4y ago
- jcbrand 4y ago
  With PoW you had capital expenditure, but also operational expenditure (e.g. electricity costs). Your capital also depreciates over time. With PoS, you don't have any operational expenditure, and the sticker price of your capital expenditure stays the same, and you can get it back when you unstake. They're not the same.
  - konschubert 4y ago
    All these are arguments in favour of PoS which I agree with.
    - jcbrand 4y ago
      They're arguments why PoS is centralizing.
      - staringback 4y ago
        How on earth have you come to the conclusion that not having operating expenses is centralizing?
        derivagral 4y ago
        Not OP, and not about opex specifically, but around PoS and centralization... Before we had ~3 groups (miners, holders, users) that all kind of needed each other. Now there's no more miners. Given that crypto loves zero-trust and all that, I think it'll be an interesting experiment to see how the randomness of staking allocations plays out; if randomness streaks towards major capital, it'll look like they're favoring themselves and their stakes will accumulate %-wise increase at a higher rate (centralization!). The other "random-streak" outcomes aren't as bad (imo) and there's some game theory around this topic that I'm only topically versed in. Complicated by the part that miners did have some of their own problematic incentives and externalities. In summary I view it as moving away from an unstable 3-body problem down to a more stable/centralized 2 bodies, one of which has greater influence. Hopefully good stewards and all that, but instead of forced cooperation among the 3 we now mostly trust 1 group.

In theory, yes. But in practice, most miners have joined a mining pool. Mining pools allow miners to share in the rewards, which means they have a vastly more predictable income per block. A solo miner would probably not have a statistically significant chance of finding a single block for the next 100 years, while pooled miners earn bitcoin through finding blocks roughly equivalent to the mining pools relative size compared with the total hash rate. Since mining is a cutthroat, bleeding edge, hypercompetitive system, that means dependability and stability are very important.

konschubert 4y ago

PoW was a system where you could buy lottery tickets by investing capital. PoS is the same, except it doesn’t ALSO burn electricity that needs to be paid for by parts of the mining rewards.

bowsamic 4y ago
PoW was worse because it had an economy of scale. For example, it is far cheaper to add mining power if you already own a big mining centre or buy ASICs in bulk. PoS does not have this: your rewards are always linear to the amount of ETH you stake. This means that, while PoS is still controlled by those with the most money, it does not trend to centralisation as harshly as PoW.
- konschubert 4y ago
  Yes, that’s correct.
- jcbrand 4y ago
  Pos is controlled by those with the most money, and they continuously gain more money through staking rewards (i.e. the rich control the system and automatically get richer). With PoW, you have to sell/spend some of the coins you earn in order to pay for operation expenditures. PoS is more centralizing.
  - bowsamic 4y ago
    That's the same in both cases. Both times you are turning money into more money. Literally the only difference is that in PoW you have external costs. But since these costs are physical and out of the scope of the chain, they do not scale linearly.
  - somebodythere 4y ago
    I don't see how it is beneficial to anyone (other than ASIC developers and energy companies) to build a tax paid to ASIC developers and energy companies into the protocol.
    - jcbrand 4y ago
      The energy expenditure anchors the money into the real world, making it a hard money like Gold, and it also facilitates decentralization. Energy is naturally decentralized all over the world. A "tax to energy companies" is a subsidy from the energy company's point of view. If you want more of something, subsidize it. A world with more energy is better than a world with less, as we're all in the process of relearning.
      - bowsamic 4y ago
        There is no evidence that the exchange value of any PoW coin has anything to do with the energy used to mint it. In fact we have counter evidence, for example that there are PoS coins that have value
        jcbrand 4y ago
        You're arguing against a point I never made.
        bowsamic 4y ago
        I don't understand what you mean then
  - 4y ago
jcbrand 4y ago
With PoW you had capital expenditure, but also operational expenditure (e.g. electricity costs). Your capital also depreciates over time. With PoS, you don't have any operational expenditure, and the sticker price of your capital expenditure stays the same, and you can get it back when you unstake. They're not the same.
- konschubert 4y ago
  All these are arguments in favour of PoS which I agree with.
  - jcbrand 4y ago
    They're arguments why PoS is centralizing.
    - staringback 4y ago
      How on earth have you come to the conclusion that not having operating expenses is centralizing?
      - derivagral 4y ago
        Not OP, and not about opex specifically, but around PoS and centralization... Before we had ~3 groups (miners, holders, users) that all kind of needed each other. Now there's no more miners. Given that crypto loves zero-trust and all that, I think it'll be an interesting experiment to see how the randomness of staking allocations plays out; if randomness streaks towards major capital, it'll look like they're favoring themselves and their stakes will accumulate %-wise increase at a higher rate (centralization!). The other "random-streak" outcomes aren't as bad (imo) and there's some game theory around this topic that I'm only topically versed in. Complicated by the part that miners did have some of their own problematic incentives and externalities. In summary I view it as moving away from an unstable 3-body problem down to a more stable/centralized 2 bodies, one of which has greater influence. Hopefully good stewards and all that, but instead of forced cooperation among the 3 we now mostly trust 1 group.