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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
by 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.
- null0pointer 2y agoThis is a wonderfully insightful comment, I’d not heard of many of the points you raised. As someone coming from the PoW worlds of Bitcoin and Monero there has always been something about PoS that gave me an ick, but I could never quite place my finger on it. Especially when Ethereum clearly seems to have PoS working well in practice. I’ve always had a suspicion that Ethereum could have never gotten off the ground, at least to the success level it currently has, if it had been PoS initially. The mechanics of slashing not working are interesting. Do we know of any abuse attempts by validators and have we seen any validators get slashed yet? Your point about PoS not being truly permissionless is a big one for me. Aside from it being fundamentally opposed to the core promises of cryptocurrencies, what’s to stop TPTB from slowly accumulating enough of a stake and then bam, we’re back to the legacy permissioned finance ecosystem but with MUCH more fine-grained tracking and telemetry. That seems like an extremely pernicious attack. The point about trust is another big one. Cryptocurrencies are meant to be trustless. That means a user doesn’t need to trust anyone else as they can fully validate their view of the world for themselves. Of course they may trust other participants for efficiency, but they don’t need to. And caveat emptor, as with all distributed systems you must assume (trust) that you are not currency inside a partitioned network, since AFAIK there is no way a system can internally verify that it is not. How much these things matter in practice only time will tell. Ethereum appears to be working well at the moment and just keeps chugging along. I’d like to see more work put into finding ways to utilize the work from PoW. For example I have an idea to use Monero’s CPU-favoring PoW for PoW based DDoS protection as seen in Tor [0]. When a user accesses a website they are given a PoW challenge to complete. This challenge is actually for a share of mining rewards as in P2Pool. The mining reward share would go to the website operator. This would harmoniously improve several things about the web. First, it would help protect websites against layer-7 DDoS attacks. Second, this L7 DDoS protection reduces the webs dependence on companies such as Cloudflare, the internets biggest man-in-the-middle. Third, it provides a way to pay website owners costing the users a small amount of their computers time and energy in much the same way as ads do currently. Fourth, it reduces the webs dependence on advertising as the way to fund your website. Fifth and finally, it helps secure the web-native currency in which website operators would be paid and which others can use for whatever they want. I think such a solution would be truly beautiful. 0: https://blog.torproject.org/introducing-proof-of-work-defense-for-onion-services/ https://blog.torproject.org/introducing-proof-of-work-defens...