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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
by 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 agoYes, that’s correct.
- jcbrand 4y agoPos 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 agoThat'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 agoI 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 agoThe 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 agoThere 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
- kinakomochidayo 4y agoPoW is just PoS with an extra step. As long as Bitcoin doesn’t implement ASIC-resistance, it’ll always be a rich gets richer.