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I sold all my Ethereum miners around 2017 I think because proof of stake was “coming soon”. It arrived a few months ago haha. I used the profits and all futur

I sold all my Ethereum miners around 2017 I think because proof of stake was “coming soon”. It arrived a few months ago haha. I used the profits and all future money to just buy coins and that has worked much better. :) I do miss the heat of the Ethereum mine though. Thank you for sharing your story, it brings back a lot of memories. It also echoes the stories of most Bitcoin mining companies I read in The Age of Cryptocurrency by Casey and Vigna. Always racing on the hamster wheel of profitability against the difficulty algorithm and electricity prices and flirting with or going bankrupt. I’m glad proof of stake is finally here and we can move to a more sane way of doing things.

unboxingelf 4y ago
I’m glad proof of stake is finally here and we can move to a more sane way of doing things. Proof of Stake isn’t a drop in replacement for Proof of Work - it comes with completely different properties and implications. If you’re just looking at it from the perspective of running a miner in your room, sure, but if you’re talking about the security and longevity of the actual network… Proof of Work means participants in the network exchange energy to validate transactions. Anyone may participate without permission. Anyone may leave at any time. Proof of Stake means participants in the network, that already hold a large stake in the network (32ETH in Ethereum) deposit that stake in exchange for permission to validate transactions. You may not withdrawal your stake (Coming Soon™) and if the transactions you publish are not inline with the rest of the network, you are fined (slashing). So while it’s true both PoS and PoW can be used to validate and secure a blockchain network, they couldn’t be further from each other. Proof of Work is currently the only solution for a truly decentralized network that’s not susceptible to coercion.
- Defitio 4y ago
  Ah yes of course there is no way of coercing someone in a PoW scenario. Very well argumented! (This is sarcastic )
- JohnJamesRambo 4y ago
  You couldn’t be more wrong about what you are saying. Bitcoin has zero long term answers for what happens when the block reward isn’t enough to secure the blockchain in the future. https://www.bis.org/publ/work765.pdf https://www.bis.org/publ/work765.pdf
  - foxhill 4y ago
    apologies, this is non-sense. this is what transaction fees are for. the gradual reduction in coinbase incentivizes miners to charge for transactions, and the desire for transaction completion incentivizes clients to pay for them. the paper you linked hand-waves away this for some reason, either to suggest that interest in bitcoin is purely speculative (which to be fair would only be half-wrong), or ignoring that market forces put upward pressure on transaction fee cost.
    - cowtools 4y ago
      Why do you expect transaction fees to increase?
      - foxhill 4y ago
        because i expect miners to not operate at a loss. they can address this by either turning off their miners (which is most likely to occur when coinbase dominates the block payment amount), or by charging more to process transactions. so far, by-and-large, the proportion of block profit coming from transaction fees has increased, as expected: https://buybitcoinworldwide.com/stats/fees-percent-of-reward/ https://buybitcoinworldwide.com/stats/fees-percent-of-reward...
        cowtools 4y ago
        >so far, by-and-large, the proportion of block profit coming from transaction fees has increased, as expected: of course it has. I am not talking about the proportion of block profit, I am asking how you expect the total block profit to stay the same from just fees. The network will have to survive when the proportion will eventually be 100%
- lupire 4y ago
  PoW burns (wastes) energy, not exchanges". PoW is really "Proof of Waste". Anyway, the real world use cases are largely large money transfers and scams, and PoS is more efficient for that.
  - unboxingelf 4y ago
    No, it literally exchanges energy for digital matter/scarcity. Real world use cases are digital scarcity and digital commodities.
  - justajot 4y ago
    For now, but I don’t think this is true for long. There are too many talented people working in this space who care enough to develop solutions to some really difficult problems that blockchains are perfect for.
    - LordDragonfang 4y ago
      People have been saying that exact thing for over a decade now, and there still has not been a single compelling use case outside of conducting illegal (or fraudulent) activity. A decade's worth of work from talented, enthusiastic people turning up nothing of substance should serve as evidence that blockchains are not, in fact, going to provide anything revolutionary.
- nootropicat 4y ago
  To mine bitcoin you need to buy an asic, which is a single purpose physical good with at most two original maker (fabs). It needs to be physically received. This single distribution is trivial to track by the authorities and makes bitcoin mining a permissioned system. Energy use is so large mining at any non-negligible scale anonymously is impossible. Any serious miner will have to open a company, move to a special facility and get a special energy connection. Mining only makes financial sense in few countries with cheapest energy. Last but not least, due to the difficulty mechanism mining for anyone but enormous miners requires pooling with others. Pools are public entities that are yet another possible layer of control by regulation. Adding all that and the conclusion is that PoW has zero resistance to regulations. China could take over bitcoin, but they decided to throw away mining instead, only making it possible for America to do so in turn. All it takes is indirect or direct control over >50% of hashrate to censor anything. It's not possible to create a fork without censoring miners, because any minority fork can be trivially attacked in an adversary situation. If any PoW network even becomes important for American government to try to censor it there's no defense. To stake in ethereum, you need to buy eth, which can be trivially bought anonymously from anyone that owns eth, most likely fully online without any physical contact. A more permissionless system isn't possible. There's no physical trail, both from ordering asics and from energy use. All that's needed is an internet connection. Staking can be easily fully anonymous and can happen anywhere in the world. That's why PoS is the only way to have a decentralized network. It's always possible to fork with any arbitrary subset of validators, whether for censorship reasons or other disagreements. PoW is objectively worse than PoS in literally everything but as a method to distribute coins. Mining is a way to sell coins for energy and hardware cost, which is an advantage at the cost of being worse in everything else, but only in the early period.
  - datadata 4y ago
    > To mine bitcoin you need to buy an asic, which is a single purpose physical good with at most two original maker (fabs). It needs to be physically received. This single distribution is trivial to track by the authorities and makes bitcoin mining a permissioned system. There is no hard limit here on the supply chains for miners, this is like saying "there are at most two mobile phone operating systems". Sure it is somewhat true, but there is no deep reason it must be true. Second, bitcoin mining is not a permissioned system. A permissioned system means that the system itself imposes permissions. You are talking about actions outside of the system that would perhaps incentives people to not use the system. This is a concern but not the same as being a permissioned system. > All it takes is indirect or direct control over >50% of hashrate to censor anything. For bitcoin PoW and ethereum PoS (hashrate => stake percentage) this is true. However the difference is that with PoW it is possible to increase the supply of mining hashrate to overthrow this quorum of censorship by literally building more physical hardware. In ethereum, if this ever happens there is no recourse as the supply of coins to stake is finite.
- justajot 4y ago
  > Proof of Work is currently the only solution for a truly decentralized network that’s not susceptible to coercion. Enter Proof of Space and Time. PoST improves upon Proof of Work to maintain the high level of security PoW provides (if not improve upon it) while using considerably less energy. It essentially does the work once instead of for every block, storing the proofs with space and using the time component to collectively move the chain forward.
  - password4321 4y ago
    I can't tell if this is serious or not, well played.
  - accountofme 4y ago
    Enter a Time And Relative Dimension In Space and even PoST can be broken ;) Though you must be a time lord...

unboxingelf 4y ago

I’m glad proof of stake is finally here and we can move to a more sane way of doing things. Proof of Stake isn’t a drop in replacement for Proof of Work - it comes with completely different properties and implications. If you’re just looking at it from the perspective of running a miner in your room, sure, but if you’re talking about the security and longevity of the actual network… Proof of Work means participants in the network exchange energy to validate transactions. Anyone may participate without permission. Anyone may leave at any time. Proof of Stake means participants in the network, that already hold a large stake in the network (32ETH in Ethereum) deposit that stake in exchange for permission to validate transactions. You may not withdrawal your stake (Coming Soon™) and if the transactions you publish are not inline with the rest of the network, you are fined (slashing). So while it’s true both PoS and PoW can be used to validate and secure a blockchain network, they couldn’t be further from each other. Proof of Work is currently the only solution for a truly decentralized network that’s not susceptible to coercion.

Defitio 4y ago
Ah yes of course there is no way of coercing someone in a PoW scenario. Very well argumented! (This is sarcastic )
JohnJamesRambo 4y ago
You couldn’t be more wrong about what you are saying. Bitcoin has zero long term answers for what happens when the block reward isn’t enough to secure the blockchain in the future. https://www.bis.org/publ/work765.pdf https://www.bis.org/publ/work765.pdf
- foxhill 4y ago
  apologies, this is non-sense. this is what transaction fees are for. the gradual reduction in coinbase incentivizes miners to charge for transactions, and the desire for transaction completion incentivizes clients to pay for them. the paper you linked hand-waves away this for some reason, either to suggest that interest in bitcoin is purely speculative (which to be fair would only be half-wrong), or ignoring that market forces put upward pressure on transaction fee cost.
  - cowtools 4y ago
    Why do you expect transaction fees to increase?
    - foxhill 4y ago
      because i expect miners to not operate at a loss. they can address this by either turning off their miners (which is most likely to occur when coinbase dominates the block payment amount), or by charging more to process transactions. so far, by-and-large, the proportion of block profit coming from transaction fees has increased, as expected: https://buybitcoinworldwide.com/stats/fees-percent-of-reward/ https://buybitcoinworldwide.com/stats/fees-percent-of-reward...
      - cowtools 4y ago
        >so far, by-and-large, the proportion of block profit coming from transaction fees has increased, as expected: of course it has. I am not talking about the proportion of block profit, I am asking how you expect the total block profit to stay the same from just fees. The network will have to survive when the proportion will eventually be 100%
lupire 4y ago
PoW burns (wastes) energy, not exchanges". PoW is really "Proof of Waste". Anyway, the real world use cases are largely large money transfers and scams, and PoS is more efficient for that.
- unboxingelf 4y ago
  No, it literally exchanges energy for digital matter/scarcity. Real world use cases are digital scarcity and digital commodities.
- justajot 4y ago
  For now, but I don’t think this is true for long. There are too many talented people working in this space who care enough to develop solutions to some really difficult problems that blockchains are perfect for.
  - LordDragonfang 4y ago
    People have been saying that exact thing for over a decade now, and there still has not been a single compelling use case outside of conducting illegal (or fraudulent) activity. A decade's worth of work from talented, enthusiastic people turning up nothing of substance should serve as evidence that blockchains are not, in fact, going to provide anything revolutionary.
nootropicat 4y ago
To mine bitcoin you need to buy an asic, which is a single purpose physical good with at most two original maker (fabs). It needs to be physically received. This single distribution is trivial to track by the authorities and makes bitcoin mining a permissioned system. Energy use is so large mining at any non-negligible scale anonymously is impossible. Any serious miner will have to open a company, move to a special facility and get a special energy connection. Mining only makes financial sense in few countries with cheapest energy. Last but not least, due to the difficulty mechanism mining for anyone but enormous miners requires pooling with others. Pools are public entities that are yet another possible layer of control by regulation. Adding all that and the conclusion is that PoW has zero resistance to regulations. China could take over bitcoin, but they decided to throw away mining instead, only making it possible for America to do so in turn. All it takes is indirect or direct control over >50% of hashrate to censor anything. It's not possible to create a fork without censoring miners, because any minority fork can be trivially attacked in an adversary situation. If any PoW network even becomes important for American government to try to censor it there's no defense. To stake in ethereum, you need to buy eth, which can be trivially bought anonymously from anyone that owns eth, most likely fully online without any physical contact. A more permissionless system isn't possible. There's no physical trail, both from ordering asics and from energy use. All that's needed is an internet connection. Staking can be easily fully anonymous and can happen anywhere in the world. That's why PoS is the only way to have a decentralized network. It's always possible to fork with any arbitrary subset of validators, whether for censorship reasons or other disagreements. PoW is objectively worse than PoS in literally everything but as a method to distribute coins. Mining is a way to sell coins for energy and hardware cost, which is an advantage at the cost of being worse in everything else, but only in the early period.
- datadata 4y ago
  > To mine bitcoin you need to buy an asic, which is a single purpose physical good with at most two original maker (fabs). It needs to be physically received. This single distribution is trivial to track by the authorities and makes bitcoin mining a permissioned system. There is no hard limit here on the supply chains for miners, this is like saying "there are at most two mobile phone operating systems". Sure it is somewhat true, but there is no deep reason it must be true. Second, bitcoin mining is not a permissioned system. A permissioned system means that the system itself imposes permissions. You are talking about actions outside of the system that would perhaps incentives people to not use the system. This is a concern but not the same as being a permissioned system. > All it takes is indirect or direct control over >50% of hashrate to censor anything. For bitcoin PoW and ethereum PoS (hashrate => stake percentage) this is true. However the difference is that with PoW it is possible to increase the supply of mining hashrate to overthrow this quorum of censorship by literally building more physical hardware. In ethereum, if this ever happens there is no recourse as the supply of coins to stake is finite.
justajot 4y ago
> Proof of Work is currently the only solution for a truly decentralized network that’s not susceptible to coercion. Enter Proof of Space and Time. PoST improves upon Proof of Work to maintain the high level of security PoW provides (if not improve upon it) while using considerably less energy. It essentially does the work once instead of for every block, storing the proofs with space and using the time component to collectively move the chain forward.
- password4321 4y ago
  I can't tell if this is serious or not, well played.
- accountofme 4y ago
  Enter a Time And Relative Dimension In Space and even PoST can be broken ;) Though you must be a time lord...