9 ms·

I’m just curious - if you were to try making a decentralized currency as a fun project, what mechanism would you use instead? I’m someone who doesn’t really us

by matrix2003 2y ago

I’m just curious - if you were to try making a decentralized currency as a fun project, what mechanism would you use instead? I’m someone who doesn’t really use it, but was fascinated with it before “blockchain” became a buzzword. edit: proof-of-work. I have been out of the loop for years :) My next question is are there downsides to proof-of-stake, and why has bitcoin not moved towards it?

wmf 2y ago
https://vitalik.eth.limo/general/2017/12/31/pos_faq.html https://vitalik.eth.limo/general/2017/12/31/pos_faq.html
_heimdall 2y ago
I've also been fascinated by bitcoin but never made the leap. The problem I always come back to is that it isn't a currency, a store of value, private, and I disagree with bitcoin's approach to decentralization. (A long list, I know. Every couple years I get the itch then rediscover all my complaints). Attempting to create a decentralized currency based on anything other than a supply-constrained natural resource is simply a losing game as far as I see it. The currency will be based only on promises, belief, and trust. A decentralized network is more akin to a Mexican standoff, trust and belief aren't what keep everyone from pulling the trigger.
- woodrowbarlow 2y ago
  but most national currencies have long since abandoned of the idea of being backed by physical resources, and have shifted towards promises, belief, and trust. are you saying that de-centralization introduces unique aspects that make physical backing a necessity?
  - Yiin 2y ago
    bluntly put you can pay taxes only in that currency and governments have power to enforce it, meanwhile btc has only as much power as currencies you can exchange it to. If you couldn't exchange btc to fiat, it would lose value rapidly.
  - _heimdall 2y ago
    Exactly. State currencies have their issues, but they do at least accept that a currency built only on faith and trust must be centralized. I am proposing that making a currency decentralized creates certain limitations. Without a central authority its extremely unlikely that a monetary system built on faith will last long. For bitcoin the claim is that the network is what you must have faith in, not a central authority. I don't find that compelling personally, mainly because I haven't found the protocol to be so bulletproof that I only need to trust it and can believe that the network will hold regardless of how many bad actors may attempt to corrupt it (not saying that is happening today, only that it is inevitable with time).
    - Sohcahtoa82 2y ago
      > mainly because I haven't found the protocol to be so bulletproof that I only need to trust it and can believe that the network will hold regardless of how many bad actors may attempt to corrupt it (not saying that is happening today, only that it is inevitable with time). On the plus side, the protocol effectively has a built-in bug bounty program! :-D
acoard 2y ago
> My next question is are there downsides to proof-of-stake, and why has bitcoin not moved towards it? There are minor downsides in theory. Proof-of-stake is a bit less "democratic" and gives more voting share to those who have more money, vs. just are mining. In practice, proof-of-stake coins seem to be doing fine. The main one here is Ethereum. The main reason Bitcoin hasn't is due to inertia and the interest for miners (who do proof-of-work) to use their democratic power to keep bitcoin invested in proof-of-work.
- schlauerfox 2y ago
  Proof-of-stake ruins it's security with a rich get richer endgame where the stakers concentrate until it's not distributed enough and one entity or group can collude and control the system and there's no way to exit that state.
  - HPsquared 2y ago
    Wouldn't any such holder want to avoid this condition developing as it would devalue the whole currency?
- keyringlight 2y ago
  Wasn't there a few times when one of the large cryptocurriencies were almost under control of large mining pools where their combined computation would have gone over half? That seems like another "who has more money".
  - Sohcahtoa82 2y ago
    With Proof-of-Work, "rich get richer" is a side effect. With Proof-of-Stake, "rich get richer" is essentially coded into law.
r00fus 2y ago
Why do we need a so-called decentralized currency anyway? I'd be less antagonistic if its major use case wasn't money laundering.
- diego_sandoval 2y ago
  Just some examples: https://en.wikipedia.org/wiki/Corralito https://en.wikipedia.org/wiki/Corralito https://en.wikipedia.org/wiki/Argentine_currency_controls_(2011%E2%80%932015) https://en.wikipedia.org/wiki/Argentine_currency_controls_(2... https://www.statista.com/statistics/316750/inflation-rate-in-argentina/ https://www.statista.com/statistics/316750/inflation-rate-in... https://hongkongfp.com/2023/12/15/hong-kong-govt-amends-national-security-law-allowing-suspects-assets-to-be-frozen-until-legal-proceedings-end/ https://hongkongfp.com/2023/12/15/hong-kong-govt-amends-nati... https://www.ibanet.org/article/5584f623-6456-4287-8c34-1907b97f3c23 https://www.ibanet.org/article/5584f623-6456-4287-8c34-1907b... https://edition.cnn.com/2022/02/20/americas/canada-trucker-protest-covid-sunday/index.html https://edition.cnn.com/2022/02/20/americas/canada-trucker-p...
  - alfredol 2y ago
    In the case of Argentina, in most cases people have turned to the much safer USD.
    - diego_sandoval 2y ago
      Only when and where they've been allowed to.
      - LegionMammal978 2y ago
        How would they be allowed to switch to BTC (or another decentralized cryptocurrency) at a greater rate than they're currently allowed to switch to USD? I'd imagine it wouldn't be much harder to crack down on one than the other, given that the USD is also predominantly a digital currency.
  - 2y ago
wongarsu 2y ago
Bitcoin's advantage is mainly its name recognition and unchanging nature (== trust and protocol stability). You could never get the necessary support for any meaningful changes. For people who want proof-of-stake there are plenty of coins doing that. Etherium is probably the best known most established option. But no coin really solves the other big challenge of crypto-currency: barely anyone uses them as currency. Most of those that do do it for illegal purposes: ransomware payments, marketplaces for illegal goods and services (including the malware SaaS providers), illegal money movements etc. But for the vast majority of people it's more like digital gold than like digital cash: an investment vehicle that derives its value from its limited supply. As an investment it doesn't actually create economic value (unlike investing in real companies), so you need to have a pretty positive view of the other use cases to judge the overall impact as positive
- pishpash 2y ago
  Whoever is using it as digital gold certainly sees economic value, e.g. preserving wealth to invest elsewhere.
- beloch 2y ago
  Bitcoin's advantage is that it's value has continued climbing, aside from some fairly big blips, irrespective of its design or utility. That's why people buy it and hold it. It's a magic piggy bank. If a truly stable cryptocurrency was released that was actually suitable for everyday transactions at scale, the people who buy bitcoin would laugh at it for not offering a return on investment. It seems like such a currency will have to be adopted from the bottom up to succeed, not trickle from the top down. Here's a question for you: What happens to the value of bitcoin when some other crypto-currency starts doing the things bitcoin has only promised? Does it crash, or does the magic bubble around a completely useless technology persist for as long as people are willing to believe in it?
  - modzu 2y ago
    it's called monero
  - wongarsu 2y ago
tromp 2y ago
I would change the emission so as to deter speculation and instead make it fair across generations: fix the block reward. I would make it as simple as possible so as to better stand the test of time.
- adultorata 2y ago
  Check out Ampleforth, fair supply distribution
SkyMarshal 2y ago
> My next question is are there downsides to proof-of-stake, and why has bitcoin not moved towards it? The main threat against any cryptocurrency is that a malicious actor will gain control of 51% of the voting power of the system, and use it in nefarious ways that ultimately break the cryptocurrency. Different Proof-of-X systems handle that problem in different ways. It's generally considered that Proof-of-Work is easier to 51% attack, but also easier to recover from that Proof-of-Stake. The attack and recovery both use the same mechanism - add more hardware mining power to the system. There is no hard limit on this baked into the system, it's just a matter of how much mining power is available to purchase irl. And recovery can be accomplished without having to hard fork the network. Proof-of-Stake on the other hand may be more difficult to 51% attack since it requires an attacker to obtain 51% of all the currency value in the system. But if this is accomplished, then it's difficult or impossible for the honest participants to rectify, since there's no more currency available to purchase. The attacker isn't going to sell them any of his 51%. So there's an inherent hard limit baked into the system, and the attacker now has 51% of it (including 51% of all newly created currency as well, since new currency is created by staking existing currency). The only fix is for the honest participants to hard-fork the network and create a new version of it that excludes the attacker. (There are other mitigations like slashing for malicious behavior designed to prevent attackers from gaining 51% in the first place). There are other differences, but I believe those are the main ones, and one reason why Bitcoin hasn't moved to it.
hanniabu 2y ago
Proof of stake is superior. The downside others are saying has been proven false time after time but bitcoiners continue to spread the misinformation because Bitcoin relies on people not understanding it's downside. https://vitalik.eth.limo/general/2020/11/06/pos2020.html https://vitalik.eth.limo/general/2020/11/06/pos2020.html
harimau777 2y ago
I think that the best solution would be gold.
- nativeit 2y ago
  That would simply empower the countries with the most gold resources, eliminate access to capital for countries with little or no natural gold resources. On top of the obvious practical considerations for storing, securing, moving, and transferring it, gold is also extremely vulnerable to manipulation, corruption, contamination, and frequent, unpredictable swings in value. That’s kind of why we abandoned the gold standard to begin with.
eitland 2y ago
Proof-of-work in its current form needs to die. If it is based on proof-of-work it needs to be something useful. If someone can prove proof-of-work won't work without wasted work then we need to make some sacrifices to make it workable. Because we cannot allow slow as molasses and/or extremely wasteful for all future. If it is based on proof-of-stake there needs to be a fair distribution model. I have some ideas for both, especially the first but I want to give them some more thought :-)
- HPsquared 2y ago
  On the one hand we have people wanting a proof of work system there the work has value. On the other hand we have a developing AI industry giving out vast amounts of "work needing done". Someone needs to try connecting those.
ruuda 2y ago
There are some downsides but also huge upsides aside from not wasting energy, for example offering very fast finality. Bitcoin has not moved to it, because arguably the new system would not be Bitcoin any more. It's a coordination problem where you have to get most users (including centralized exchanges) to stop following the PoW chain and start respecting the PoS chain, but they will only do that if they believe everybody else will. Ethereum was able to pull that off because Ethereum foundation and Vitalik (its creator) announcing and implementing, and practicing the switch many times, has a lot of weight. (And then still, some miners remained, but that chain is now known by a different name and not generally known as "Ethereum".) Bitcoin is a lot less coordinated in that sense, even less invasive changes to the protocol are difficult to pull off.
FactKnower69 2y ago
even just proof-of-work where the work isn't completely fake and worthless would be a huge improvement, but even that obvious layup is beyond the reach of web3 geniuses
woah 2y ago
Proof of stake is no different than most traditional governance structures such as corporations in that it relies on a committee with an honest majority to keep the system secure. Validators are supposed to act like some kind of completely neutral, decentralized system, but they are not. For example, the fundamental principle of PoS is slashing for equivocation: when validators present two alternate versions of history (this could be part of a "double spend" attack), they are supposed to be slashed and have their stake taken away. It takes 1/3 of validators to successfully pass off two versions of history to a double spend victim. However, 1/3 of validators can censor this slashing transaction. So if a double spend attack happens, the perpetrators of the attack are in charge of punishing themselves. So, the fundamental security mechanism of PoS, equivocation slashing, can in fact never work in practice to punish an actual attack! Another example is the idea that participation in a PoS chain is permissionless. This is the case in PoW. However, in PoS, 1/3 of the existing validator set could censor any new validators that would like to join, maintaining complete control of the chain. The existing validators only act as if the system is permissionless. There has been a large amount of thought put into this paradox, and the PoS research community has settled on the idea that if the validator set breaks these norms, then users can just use a new chain with the same state, and a new, more trustworthy validator set. This has several problems: - Philosophically, what is the point of creating a system that obviously doesn't work as intended, and then when this is pointed out saying "that's not a problem because users don't have to use the system"? - The coordination of this hypothetical switch to a better validator set is completely unexplored since it is totally outside of the PoS protocol. It may be very disruptive to users and result in downtime, loss of funds sent during the switchover period, multiple new blockchains, or other issues and confusion. - The fact that the system does not work, and there must always be the possibility of human operators sorting things out based on an undefined recovery procedure means that truly autonomous and truly secure clients are not possible in PoS. This is a problem for both far-out concepts like self-owned self-driving cars, and for bridges between blockchains, which must always rely on either trusting the validators, or a multisig made of trusted people who can stop or reconfigure the bridge. In fact, there is no clear dividing line between a PoS blockchain, a PoA blockchain (this has a predefined validator set), a multisig, and a single entity running a chain. The only differences between these models are a matter degree of diffusion of authority. This is what Bitcoin people do not like about PoS. PoW has its own problems, but they are different, and PoW chains do not rely on a set of trusted operators in the same way.
trompetenaccoun 2y ago
You shouldn't take advice from people who don't even know how to spell the names of the networks they're lecturing about. Blockchain has become a buzzword like you mentioned, everyone has an opinion, even people who don't understand anything. But the technology has come a long way since the early Bitcoin days. There is no need to build your own chain, for a fun project you can simply launch a token on existing smart contract platforms such as Ethereum. Building your own chain is complicated if it's not a clone of an existing one, that's not a side project. >My next question is are there downsides to proof-of-stake, and why has bitcoin not moved towards it? There aren't any obvious ones but imo only time will tell. Bitcoiners feel there is a higher centralization risk in PoS. Which is true for some PoS systems but really depends on how exactly set up. Ethereum for example has a significant number of "home stakers" (small-time solo validators), which in Bitcoin simply isn't a thing anymore since it's practically all mining farms. And people in Ethereum are working towards further decentralization whereas Bitcoin Core is more or less ossified. There hasn't been a BTC hard fork in years and even the forks that happened were about relatively minor things, mainly block size.

wmf 2y ago

https://vitalik.eth.limo/general/2017/12/31/pos_faq.html https://vitalik.eth.limo/general/2017/12/31/pos_faq.html

_heimdall 2y ago

I've also been fascinated by bitcoin but never made the leap. The problem I always come back to is that it isn't a currency, a store of value, private, and I disagree with bitcoin's approach to decentralization. (A long list, I know. Every couple years I get the itch then rediscover all my complaints). Attempting to create a decentralized currency based on anything other than a supply-constrained natural resource is simply a losing game as far as I see it. The currency will be based only on promises, belief, and trust. A decentralized network is more akin to a Mexican standoff, trust and belief aren't what keep everyone from pulling the trigger.

woodrowbarlow 2y ago
but most national currencies have long since abandoned of the idea of being backed by physical resources, and have shifted towards promises, belief, and trust. are you saying that de-centralization introduces unique aspects that make physical backing a necessity?
- Yiin 2y ago
  bluntly put you can pay taxes only in that currency and governments have power to enforce it, meanwhile btc has only as much power as currencies you can exchange it to. If you couldn't exchange btc to fiat, it would lose value rapidly.
- _heimdall 2y ago
  Exactly. State currencies have their issues, but they do at least accept that a currency built only on faith and trust must be centralized. I am proposing that making a currency decentralized creates certain limitations. Without a central authority its extremely unlikely that a monetary system built on faith will last long. For bitcoin the claim is that the network is what you must have faith in, not a central authority. I don't find that compelling personally, mainly because I haven't found the protocol to be so bulletproof that I only need to trust it and can believe that the network will hold regardless of how many bad actors may attempt to corrupt it (not saying that is happening today, only that it is inevitable with time).
  - Sohcahtoa82 2y ago
    > mainly because I haven't found the protocol to be so bulletproof that I only need to trust it and can believe that the network will hold regardless of how many bad actors may attempt to corrupt it (not saying that is happening today, only that it is inevitable with time). On the plus side, the protocol effectively has a built-in bug bounty program! :-D

acoard 2y ago

> My next question is are there downsides to proof-of-stake, and why has bitcoin not moved towards it? There are minor downsides in theory. Proof-of-stake is a bit less "democratic" and gives more voting share to those who have more money, vs. just are mining. In practice, proof-of-stake coins seem to be doing fine. The main one here is Ethereum. The main reason Bitcoin hasn't is due to inertia and the interest for miners (who do proof-of-work) to use their democratic power to keep bitcoin invested in proof-of-work.

schlauerfox 2y ago
Proof-of-stake ruins it's security with a rich get richer endgame where the stakers concentrate until it's not distributed enough and one entity or group can collude and control the system and there's no way to exit that state.
- HPsquared 2y ago
  Wouldn't any such holder want to avoid this condition developing as it would devalue the whole currency?
keyringlight 2y ago
Wasn't there a few times when one of the large cryptocurriencies were almost under control of large mining pools where their combined computation would have gone over half? That seems like another "who has more money".
- Sohcahtoa82 2y ago
  With Proof-of-Work, "rich get richer" is a side effect. With Proof-of-Stake, "rich get richer" is essentially coded into law.

r00fus 2y ago

Why do we need a so-called decentralized currency anyway? I'd be less antagonistic if its major use case wasn't money laundering.

diego_sandoval 2y ago
Just some examples: https://en.wikipedia.org/wiki/Corralito https://en.wikipedia.org/wiki/Corralito https://en.wikipedia.org/wiki/Argentine_currency_controls_(2011%E2%80%932015) https://en.wikipedia.org/wiki/Argentine_currency_controls_(2... https://www.statista.com/statistics/316750/inflation-rate-in-argentina/ https://www.statista.com/statistics/316750/inflation-rate-in... https://hongkongfp.com/2023/12/15/hong-kong-govt-amends-national-security-law-allowing-suspects-assets-to-be-frozen-until-legal-proceedings-end/ https://hongkongfp.com/2023/12/15/hong-kong-govt-amends-nati... https://www.ibanet.org/article/5584f623-6456-4287-8c34-1907b97f3c23 https://www.ibanet.org/article/5584f623-6456-4287-8c34-1907b... https://edition.cnn.com/2022/02/20/americas/canada-trucker-protest-covid-sunday/index.html https://edition.cnn.com/2022/02/20/americas/canada-trucker-p...
- alfredol 2y ago
  In the case of Argentina, in most cases people have turned to the much safer USD.
  - diego_sandoval 2y ago
    Only when and where they've been allowed to.
    - LegionMammal978 2y ago
      How would they be allowed to switch to BTC (or another decentralized cryptocurrency) at a greater rate than they're currently allowed to switch to USD? I'd imagine it wouldn't be much harder to crack down on one than the other, given that the USD is also predominantly a digital currency.
- 2y ago

wongarsu 2y ago

Bitcoin's advantage is mainly its name recognition and unchanging nature (== trust and protocol stability). You could never get the necessary support for any meaningful changes. For people who want proof-of-stake there are plenty of coins doing that. Etherium is probably the best known most established option. But no coin really solves the other big challenge of crypto-currency: barely anyone uses them as currency. Most of those that do do it for illegal purposes: ransomware payments, marketplaces for illegal goods and services (including the malware SaaS providers), illegal money movements etc. But for the vast majority of people it's more like digital gold than like digital cash: an investment vehicle that derives its value from its limited supply. As an investment it doesn't actually create economic value (unlike investing in real companies), so you need to have a pretty positive view of the other use cases to judge the overall impact as positive

pishpash 2y ago
Whoever is using it as digital gold certainly sees economic value, e.g. preserving wealth to invest elsewhere.
beloch 2y ago
Bitcoin's advantage is that it's value has continued climbing, aside from some fairly big blips, irrespective of its design or utility. That's why people buy it and hold it. It's a magic piggy bank. If a truly stable cryptocurrency was released that was actually suitable for everyday transactions at scale, the people who buy bitcoin would laugh at it for not offering a return on investment. It seems like such a currency will have to be adopted from the bottom up to succeed, not trickle from the top down. Here's a question for you: What happens to the value of bitcoin when some other crypto-currency starts doing the things bitcoin has only promised? Does it crash, or does the magic bubble around a completely useless technology persist for as long as people are willing to believe in it?
- modzu 2y ago
  it's called monero
- wongarsu 2y ago

tromp 2y ago

I would change the emission so as to deter speculation and instead make it fair across generations: fix the block reward. I would make it as simple as possible so as to better stand the test of time.

adultorata 2y ago
Check out Ampleforth, fair supply distribution

SkyMarshal 2y ago

> My next question is are there downsides to proof-of-stake, and why has bitcoin not moved towards it? The main threat against any cryptocurrency is that a malicious actor will gain control of 51% of the voting power of the system, and use it in nefarious ways that ultimately break the cryptocurrency. Different Proof-of-X systems handle that problem in different ways. It's generally considered that Proof-of-Work is easier to 51% attack, but also easier to recover from that Proof-of-Stake. The attack and recovery both use the same mechanism - add more hardware mining power to the system. There is no hard limit on this baked into the system, it's just a matter of how much mining power is available to purchase irl. And recovery can be accomplished without having to hard fork the network. Proof-of-Stake on the other hand may be more difficult to 51% attack since it requires an attacker to obtain 51% of all the currency value in the system. But if this is accomplished, then it's difficult or impossible for the honest participants to rectify, since there's no more currency available to purchase. The attacker isn't going to sell them any of his 51%. So there's an inherent hard limit baked into the system, and the attacker now has 51% of it (including 51% of all newly created currency as well, since new currency is created by staking existing currency). The only fix is for the honest participants to hard-fork the network and create a new version of it that excludes the attacker. (There are other mitigations like slashing for malicious behavior designed to prevent attackers from gaining 51% in the first place). There are other differences, but I believe those are the main ones, and one reason why Bitcoin hasn't moved to it.

hanniabu 2y ago

Proof of stake is superior. The downside others are saying has been proven false time after time but bitcoiners continue to spread the misinformation because Bitcoin relies on people not understanding it's downside. https://vitalik.eth.limo/general/2020/11/06/pos2020.html https://vitalik.eth.limo/general/2020/11/06/pos2020.html

harimau777 2y ago

I think that the best solution would be gold.

nativeit 2y ago
That would simply empower the countries with the most gold resources, eliminate access to capital for countries with little or no natural gold resources. On top of the obvious practical considerations for storing, securing, moving, and transferring it, gold is also extremely vulnerable to manipulation, corruption, contamination, and frequent, unpredictable swings in value. That’s kind of why we abandoned the gold standard to begin with.

eitland 2y ago

Proof-of-work in its current form needs to die. If it is based on proof-of-work it needs to be something useful. If someone can prove proof-of-work won't work without wasted work then we need to make some sacrifices to make it workable. Because we cannot allow slow as molasses and/or extremely wasteful for all future. If it is based on proof-of-stake there needs to be a fair distribution model. I have some ideas for both, especially the first but I want to give them some more thought :-)

HPsquared 2y ago
On the one hand we have people wanting a proof of work system there the work has value. On the other hand we have a developing AI industry giving out vast amounts of "work needing done". Someone needs to try connecting those.

ruuda 2y ago

There are some downsides but also huge upsides aside from not wasting energy, for example offering very fast finality. Bitcoin has not moved to it, because arguably the new system would not be Bitcoin any more. It's a coordination problem where you have to get most users (including centralized exchanges) to stop following the PoW chain and start respecting the PoS chain, but they will only do that if they believe everybody else will. Ethereum was able to pull that off because Ethereum foundation and Vitalik (its creator) announcing and implementing, and practicing the switch many times, has a lot of weight. (And then still, some miners remained, but that chain is now known by a different name and not generally known as "Ethereum".) Bitcoin is a lot less coordinated in that sense, even less invasive changes to the protocol are difficult to pull off.

FactKnower69 2y ago

even just proof-of-work where the work isn't completely fake and worthless would be a huge improvement, but even that obvious layup is beyond the reach of web3 geniuses

woah 2y ago

Proof of stake is no different than most traditional governance structures such as corporations in that it relies on a committee with an honest majority to keep the system secure. Validators are supposed to act like some kind of completely neutral, decentralized system, but they are not. For example, the fundamental principle of PoS is slashing for equivocation: when validators present two alternate versions of history (this could be part of a "double spend" attack), they are supposed to be slashed and have their stake taken away. It takes 1/3 of validators to successfully pass off two versions of history to a double spend victim. However, 1/3 of validators can censor this slashing transaction. So if a double spend attack happens, the perpetrators of the attack are in charge of punishing themselves. So, the fundamental security mechanism of PoS, equivocation slashing, can in fact never work in practice to punish an actual attack! Another example is the idea that participation in a PoS chain is permissionless. This is the case in PoW. However, in PoS, 1/3 of the existing validator set could censor any new validators that would like to join, maintaining complete control of the chain. The existing validators only act as if the system is permissionless. There has been a large amount of thought put into this paradox, and the PoS research community has settled on the idea that if the validator set breaks these norms, then users can just use a new chain with the same state, and a new, more trustworthy validator set. This has several problems: - Philosophically, what is the point of creating a system that obviously doesn't work as intended, and then when this is pointed out saying "that's not a problem because users don't have to use the system"? - The coordination of this hypothetical switch to a better validator set is completely unexplored since it is totally outside of the PoS protocol. It may be very disruptive to users and result in downtime, loss of funds sent during the switchover period, multiple new blockchains, or other issues and confusion. - The fact that the system does not work, and there must always be the possibility of human operators sorting things out based on an undefined recovery procedure means that truly autonomous and truly secure clients are not possible in PoS. This is a problem for both far-out concepts like self-owned self-driving cars, and for bridges between blockchains, which must always rely on either trusting the validators, or a multisig made of trusted people who can stop or reconfigure the bridge. In fact, there is no clear dividing line between a PoS blockchain, a PoA blockchain (this has a predefined validator set), a multisig, and a single entity running a chain. The only differences between these models are a matter degree of diffusion of authority. This is what Bitcoin people do not like about PoS. PoW has its own problems, but they are different, and PoW chains do not rely on a set of trusted operators in the same way.

trompetenaccoun 2y ago

You shouldn't take advice from people who don't even know how to spell the names of the networks they're lecturing about. Blockchain has become a buzzword like you mentioned, everyone has an opinion, even people who don't understand anything. But the technology has come a long way since the early Bitcoin days. There is no need to build your own chain, for a fun project you can simply launch a token on existing smart contract platforms such as Ethereum. Building your own chain is complicated if it's not a clone of an existing one, that's not a side project. >My next question is are there downsides to proof-of-stake, and why has bitcoin not moved towards it? There aren't any obvious ones but imo only time will tell. Bitcoiners feel there is a higher centralization risk in PoS. Which is true for some PoS systems but really depends on how exactly set up. Ethereum for example has a significant number of "home stakers" (small-time solo validators), which in Bitcoin simply isn't a thing anymore since it's practically all mining farms. And people in Ethereum are working towards further decentralization whereas Bitcoin Core is more or less ossified. There hasn't been a BTC hard fork in years and even the forks that happened were about relatively minor things, mainly block size.