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Why is Proof of Work less ethical than Proof of Rich a.k.a. rich being gradually more rich without doing anything? Not saying PoW is safer (it's not), but less

by rfoo 2y ago

Why is Proof of Work less ethical than Proof of Rich a.k.a. rich being gradually more rich without doing anything? Not saying PoW is safer (it's not), but less ethical is pretty a bold claim.

rpicard 2y ago
Environmental impact of the proof of work algorithms is my understanding.
- toenail 2y ago
  Proof of work mining is probably the only industry on the planet that has the potential to be carbon negative AND profitable.
  - foota 2y ago
    Renewable energy?
    - toenail 2y ago
      Waste energy like unused methane, flare gas and the like.
  - Uehreka 2y ago
    (sigh) Is this the methane flaring argument, or Peter Thiel’s “windmills in Vermont”?
    - toenail 2y ago
      (sigh) Do you expect a reply when you start like this?
      - Uehreka 2y ago
        I don’t really care either way. I’m tired of having to debunk the same sloppy arguments year after year.
        toenail 2y ago
        https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html > Be kind. Don't be snarky. Converse curiously; don't cross-examine. If you can't follow the guidelines it would probably better to remain quiet.
Uehreka 2y ago
The environmental impact. And yes, I know, 0.5%, but my issue was always that if PoW currencies went from being a niche subculture to a point where it was used for everyday exchange (many people were arguing that this would and should happen) that 0.5% would surely go up by a great deal. To a point where crypto had to clear a super high bar of usefulness to counterbalance the harm it would do. To be fair, AI training also has a big carbon footprint, but I feel like the utility provided by AI makes it easier to argue that its usefulness counterbalances its ecological harm.
- avarun 2y ago
  There is no "environmental impact". Environmental impact comes from energy production, not energy usage. It's incoherent to argue others should tamper down their energy usage because most folks producing energy aren't doing it in an ethical way.
  - ben_w 2y ago
    Ultimately any proof-of-work system has to burn joules rather than clock cycles (because any race on cycles-per-joule is rapidly caught up), and that makes it clearer where the waste is: to be economically stable, in the face of adversarial actions by other nation states who sometimes have a vested interest in undermining your currency so actively seek the chaos and loss of trust in a double-spend event, your currency has to be backed by more electricity than any hostile power can spend on breaking it.
  - skybrian 2y ago
    It seems you've come up with a proof that there's no such thing as wasting electricity. When you prove an extraordinary claim like that, it's time to go back and figure out how you got it wrong.
  - lolinder 2y ago
    > It's incoherent to argue others should tamper down their energy usage because most folks producing energy aren't doing it in an ethical way. There's a general consensus that paying someone else to do your dirty work doesn't free you of the moral (or, usually, legal) culpability for the damage done. If you knowingly direct your money towards unethical providers, you are directly increasing the demand for unethical behavior. (That's assuming that the producers themselves are responsible for the ethics. If a producer is doing its best to convert to clean energy as fast as possible, they may be entirely in the clear but POW would still be unethical. In that scenario POW is placing strain on the limited clean energy supplies, forcing the producer to use more fossil fuels than they'd otherwise need to.)
pa7x1 2y ago
How do the rich become gradually richer under PoS? I'm flabbergasted by the level of math education. Assume we have 2 validators in the network; the first one owns 90% of the network, the second one owns 10%. Lets call them Whale and Shrimpy, respectively. To make the numbers round let's assume total circulating supply of ETH is 100 initially and that the yield resulting from being a validator is 10% per year. After the first year, 10 new ETH will have been minted. Whale would have gotten 9 ETH, and Shrimpy would have gotten 1 ETH. OP is assuming that as 9 is bigger than 1, Whale is getting richer faster than Shrimpy. But, let's look at the final situation globally. At year 0: Total ETH circulating supply: 100 ETH Whale has 90 ETH. Owns 90% of the network. Shrimpy has 10 ETH. Owns 10% of the network. At year 1: Total ETH circulating supply: 110 ETH Whale has 99 ETH. Owns 90% of the network. Shrimpy has 11 ETH. Owns 10% of the network. Whale has exactly the same network ownership after validating for 1 whole year, the network is not centralizing at all! The rich are not getting richer any faster than the poor. TL;DR: Friends don't let friends skip elementary math classes.
- rfoo 2y ago
  Sure, friends also won't let friends skip the fact that circulating supply of ETH is now decreasing instead of increasing. Also, only ~30% tokens are staked. The 30% who chose to stake essentially tax the other 70% in use. Each of the validator do the same amount of work (ok, strictly speaking you get to do more when you have more ETH staked, but being a validator is cheap and does not cost significantly more energy even if you are being selected more frequently because running one proposal is too cheap, that's the whole environmental point, right?) except what they receive is proportioned to how much they stake. I hate being mean, but sorry, remembering to check one's assumption is a habit I gained after elementary school, so maybe that's too hard for you.
  - pa7x1 2y ago
    > Sure, friends also won't let friends skip the fact that circulating supply of ETH is now decreasing instead of increasing. This changes absolutely nothing of the calculation. Furthermore, the change in circulating supply last year was of 0.07%. > Also, only ~30% tokens are staked. Correct. > The 30% who chose to stake essentially tax the other 70% in use. There is something called opportunity cost. With the existence of liquid staking derivatives the choice to stake or not is one of opportunity cost. Plenty of people may consider the return observed by staking insufficient given the opportunity cost and additional risks. Participating in staking is fully permissionless, stakers are not taxing non-stakers. They are being remunerated for their work. > Each of the validator do exactly same amount of work (that's the point, right) except what they receive is proportioned to how much they stake. Incorrect. A staker does proportionate amount of work to its stake. That's why it gets paid more. A staker gets paid for fulfilling its duties as defined in the protocol (attesting, proposing blocks, participating in sync committees). For each of those things there are some rewards and some punishments in case you fail to fulfill them. If a staker has more validators running you simply fulfill more of those duties more often, hence your reward scales linearly with number of validators.

by rfoo 2y ago

Why is Proof of Work less ethical than Proof of Rich a.k.a. rich being gradually more rich without doing anything? Not saying PoW is safer (it's not), but less ethical is pretty a bold claim.

rpicard 2y ago

Environmental impact of the proof of work algorithms is my understanding.

toenail 2y ago
Proof of work mining is probably the only industry on the planet that has the potential to be carbon negative AND profitable.
- foota 2y ago
  Renewable energy?
  - toenail 2y ago
    Waste energy like unused methane, flare gas and the like.
- Uehreka 2y ago
  (sigh) Is this the methane flaring argument, or Peter Thiel’s “windmills in Vermont”?
  - toenail 2y ago
    (sigh) Do you expect a reply when you start like this?
    - Uehreka 2y ago
      I don’t really care either way. I’m tired of having to debunk the same sloppy arguments year after year.
      - toenail 2y ago
        https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html > Be kind. Don't be snarky. Converse curiously; don't cross-examine. If you can't follow the guidelines it would probably better to remain quiet.

Uehreka 2y ago

The environmental impact. And yes, I know, 0.5%, but my issue was always that if PoW currencies went from being a niche subculture to a point where it was used for everyday exchange (many people were arguing that this would and should happen) that 0.5% would surely go up by a great deal. To a point where crypto had to clear a super high bar of usefulness to counterbalance the harm it would do. To be fair, AI training also has a big carbon footprint, but I feel like the utility provided by AI makes it easier to argue that its usefulness counterbalances its ecological harm.

avarun 2y ago
There is no "environmental impact". Environmental impact comes from energy production, not energy usage. It's incoherent to argue others should tamper down their energy usage because most folks producing energy aren't doing it in an ethical way.
- ben_w 2y ago
  Ultimately any proof-of-work system has to burn joules rather than clock cycles (because any race on cycles-per-joule is rapidly caught up), and that makes it clearer where the waste is: to be economically stable, in the face of adversarial actions by other nation states who sometimes have a vested interest in undermining your currency so actively seek the chaos and loss of trust in a double-spend event, your currency has to be backed by more electricity than any hostile power can spend on breaking it.
- skybrian 2y ago
  It seems you've come up with a proof that there's no such thing as wasting electricity. When you prove an extraordinary claim like that, it's time to go back and figure out how you got it wrong.
- lolinder 2y ago
  > It's incoherent to argue others should tamper down their energy usage because most folks producing energy aren't doing it in an ethical way. There's a general consensus that paying someone else to do your dirty work doesn't free you of the moral (or, usually, legal) culpability for the damage done. If you knowingly direct your money towards unethical providers, you are directly increasing the demand for unethical behavior. (That's assuming that the producers themselves are responsible for the ethics. If a producer is doing its best to convert to clean energy as fast as possible, they may be entirely in the clear but POW would still be unethical. In that scenario POW is placing strain on the limited clean energy supplies, forcing the producer to use more fossil fuels than they'd otherwise need to.)

pa7x1 2y ago

How do the rich become gradually richer under PoS? I'm flabbergasted by the level of math education. Assume we have 2 validators in the network; the first one owns 90% of the network, the second one owns 10%. Lets call them Whale and Shrimpy, respectively. To make the numbers round let's assume total circulating supply of ETH is 100 initially and that the yield resulting from being a validator is 10% per year. After the first year, 10 new ETH will have been minted. Whale would have gotten 9 ETH, and Shrimpy would have gotten 1 ETH. OP is assuming that as 9 is bigger than 1, Whale is getting richer faster than Shrimpy. But, let's look at the final situation globally. At year 0: Total ETH circulating supply: 100 ETH Whale has 90 ETH. Owns 90% of the network. Shrimpy has 10 ETH. Owns 10% of the network. At year 1: Total ETH circulating supply: 110 ETH Whale has 99 ETH. Owns 90% of the network. Shrimpy has 11 ETH. Owns 10% of the network. Whale has exactly the same network ownership after validating for 1 whole year, the network is not centralizing at all! The rich are not getting richer any faster than the poor. TL;DR: Friends don't let friends skip elementary math classes.

rfoo 2y ago
Sure, friends also won't let friends skip the fact that circulating supply of ETH is now decreasing instead of increasing. Also, only ~30% tokens are staked. The 30% who chose to stake essentially tax the other 70% in use. Each of the validator do the same amount of work (ok, strictly speaking you get to do more when you have more ETH staked, but being a validator is cheap and does not cost significantly more energy even if you are being selected more frequently because running one proposal is too cheap, that's the whole environmental point, right?) except what they receive is proportioned to how much they stake. I hate being mean, but sorry, remembering to check one's assumption is a habit I gained after elementary school, so maybe that's too hard for you.
- pa7x1 2y ago
  > Sure, friends also won't let friends skip the fact that circulating supply of ETH is now decreasing instead of increasing. This changes absolutely nothing of the calculation. Furthermore, the change in circulating supply last year was of 0.07%. > Also, only ~30% tokens are staked. Correct. > The 30% who chose to stake essentially tax the other 70% in use. There is something called opportunity cost. With the existence of liquid staking derivatives the choice to stake or not is one of opportunity cost. Plenty of people may consider the return observed by staking insufficient given the opportunity cost and additional risks. Participating in staking is fully permissionless, stakers are not taxing non-stakers. They are being remunerated for their work. > Each of the validator do exactly same amount of work (that's the point, right) except what they receive is proportioned to how much they stake. Incorrect. A staker does proportionate amount of work to its stake. That's why it gets paid more. A staker gets paid for fulfilling its duties as defined in the protocol (attesting, proposing blocks, participating in sync committees). For each of those things there are some rewards and some punishments in case you fail to fulfill them. If a staker has more validators running you simply fulfill more of those duties more often, hence your reward scales linearly with number of validators.