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Not the case with proof of stake.
by zeroclip 4y ago
Not the case with proof of stake.
- NoGravitas 4y agoProof of stake is a pyramid scheme.
- zeroclip 4y agoum, no? How is it one? Validators are paid mostly from protocol reward by placing their capital at risk and performing the necessary work to validate the network.
- xigoi 4y agoSo the richest get even richer, at the expense of everyone else. How is that not a pyramid scheme?
- zeroclip 4y ago“Richest get richer” could describe any form of capital investment in a risk-on asset that appreciates over time: buying gold, stocks, real estate, art, VC. If you have capital to place at risk in an investment that gives you a return*, you are “rich and getting richer.” Unlike stocks and other investments, you don’t need a large amount of capital to receive a PoS reward, and there are less significant economy of scale. All validators receive an equal % return no matter how much Eth they deposit. Those without 32ETH capital can use pools and decentralized staking platforms to receive the same % return minus a small fee to the service who has the capital at risk and is doing the work to validate. Opposite to a pyramid scheme: if more people join Eth deposit pool, everybody including early investors earns collectively less % reward on their stake, and the equation for this is explicit and known! And the staking deposit of each new entrant does not funnel back up to early entrants. * Note: a lot of these investors are down since last year, not just Eth but stocks and other investments have crashed.
- xigoi 4y agoAh yes, let's make currency decentralized by having it controlled by the richest people. That makes much more sense than wasting energy.
- zeroclip 4y agoThat’s not how PoS works.
- xigoi 4y agoSo tell me again, how much money do you need in order to stake?
- zeroclip 4y ago0.01 ETH or less, through decentralized staking pools. But your main argument is wrong: validators do not control the network. Users running node software do. Running a node is free. If a single validator began to exert unwanted control, the honest majority of non-rich users could slash or evict them.
- Cameri 4y agoWhat prevents the rich validators from slashing non-rich users so they don't lose their majority?
- zeroclip 4y agoIt’s not the majority of stake that controls the chain, it’s the majority of honest users. Rich validators can collude to have 51% staking power and start to exert unwanted force, like censoring blocks for their own profit or doing something else unwanted, but the majority of honest users can decide to coordinate a soft fork and point their clients at a new chain. The controlling validators will only be rich on the old chain.