Advantage of PoW over PoS | Bitcointalksearch.org

Nxtblg

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Quote from: duphash on July 27, 2015, 06:36:46 PM

NXT decentralized exchange solves that problem too. No central exchange - no concentration of staking power and theft risks.
Am I right ?

Yes, you are right. As long as secure passwords are used for the wallets - which you think we'd all have learned by now - Nxt's decentralized exchange does not have that point of failure.

duphash

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Quote from: rnicoll on July 27, 2015, 05:13:57 PM

Quote from: duphash on July 25, 2015, 04:02:28 PM

What prevents someone from stealing million BTC from any exchange ? I don't see how PoW prevents this.
With decentralized Asset Exchange like NXT trade.secureae.com problem of stealing from exchanges does not exist.

BTC pump of 2013 - 2014 shows that mined currency does not have to be sold and can be hoarded too.

I still don't see compelling arguments in favor of PoW.

I believe there's two points here:

1. With PoW coins, there's no advantage to keeping the coins online, while with PoS coins the exchange is motivated to store coins online where they can stake them.
2. With PoS coins, a major theft can put a huge chunk of mining power into the hands of a malicious actor. See the case with the Vericoin hack from Mintpal, where 30+% of the total supply was stolen, leading to a hard fork to revert the transaction: http://www.coindesk.com/bitcoin-protected-vericoin-stolen-mintpal-wallet-breach/

NXT decentralized exchange solves that problem too. No central exchange - no concentration of staking power and theft risks.
Am I right ?

rnicoll

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Quote from: duphash on July 25, 2015, 04:02:28 PM

What prevents someone from stealing million BTC from any exchange ? I don't see how PoW prevents this.
With decentralized Asset Exchange like NXT trade.secureae.com problem of stealing from exchanges does not exist.

BTC pump of 2013 - 2014 shows that mined currency does not have to be sold and can be hoarded too.

I still don't see compelling arguments in favor of PoW.

I believe there's two points here:

1. With PoW coins, there's no advantage to keeping the coins online, while with PoS coins the exchange is motivated to store coins online where they can stake them.
2. With PoS coins, a major theft can put a huge chunk of mining power into the hands of a malicious actor. See the case with the Vericoin hack from Mintpal, where 30+% of the total supply was stolen, leading to a hard fork to revert the transaction: http://www.coindesk.com/bitcoin-protected-vericoin-stolen-mintpal-wallet-breach/

duphash

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Quote from: ðºÞæ on July 27, 2015, 05:02:29 PM

No Government or Bank will ever create a Proof of Work (PoW) coin, period. It separates the Men from the Boys.

If PoW requires energy and energy is controlled by govt and banks then why do you consider PoW being different than PoS ?

ðºÞæ

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No Government or Bank will ever create a Proof of Work (PoW) coin, period. It separates the Men from the Boys.

duphash

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Quote from: d5000 on July 26, 2015, 03:32:09 PM

In my opinion, hoarding has also positive characteristics. It could be functional to price stability if there were restrictions in moving these hoarded coins.

Imagine that for receiving PoS rewards / forging, you must lock your coins for some months. In this case, you cannot sell them in a crash* and the crash would not be so deep as many people wouldn't be able to sell. So if you stake you are taking an entrepreneurial risk - and this way I think it's legitimate to earn coins for it.

As of now, I don't know any coins using this system. But Proof of Burn as used in Slimcoin is a bit similar, because when you burn coins you'll get them eventually back, but over a long time. There was also a coin called ReserveShare where "staking" coins can be moved but you have to pay a high fee, I don't know if they have implemented their particular PoS mechanism.

*You could try to sell your private key, but it wouldn't be easy because you still would have access to the address and so your counterparty must have plain trust in you.

I think hoarding is positive only if it's done by wide number of investors. Wide enough to prevent closed circle agreement of pumping and dumping.
And the best way to achieve it is by distributing well and disallowing trade for long enough period of time, like 1 year or 2 until features are implemented to discourage massive dump.

sofu

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When I see what happened with Bitmark Projekt and no miners and pools are left (can't move my coins lol) I guess POS is now my favorite

Distribution comes with time

duphash

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Quote from: MaxDZ8 on July 26, 2015, 11:11:35 AM

My country has a law on capital export. Since there's no national exchange this basically means I have no chance to get PoS coins. Explain me this fair distribution thing.
Besides my PC consumes 60W idle, 120W loaded (playing) and 130W when mining (and playing Borderlands 2), in this terms, getting into PoW coins is almost for free to me.

Interesting, I did not think about this disadvantage of PoS, good catch.
So PoS cannot be as widely distributed as PoW unless there is already PoW coin that can be exchanged for PoS.

So any PoS coin owe part of it's success to PoW coins.
And any PoW coin capital will eventually be moved to a PoS coin (BTC -> NXT).

d5000

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In my opinion, hoarding has also positive characteristics. It could be functional to price stability if there were restrictions in moving these hoarded coins.

Imagine that for receiving PoS rewards / forging, you must lock your coins for some months. In this case, you cannot sell them in a crash* and the crash would not be so deep as many people wouldn't be able to sell. So if you stake you are taking an entrepreneurial risk - and this way I think it's legitimate to earn coins for it.

As of now, I don't know any coins using this system. But Proof of Burn as used in Slimcoin is a bit similar, because when you burn coins you'll get them eventually back, but over a long time. There was also a coin called ReserveShare where "staking" coins can be moved but you have to pay a high fee, I don't know if they have implemented their particular PoS mechanism.

*You could try to sell your private key, but it wouldn't be easy because you still would have access to the address and so your counterparty must have plain trust in you.

nextgencoin

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Quote from: MaxDZ8 on July 26, 2015, 11:11:35 AM

My country has a law on capital export. Since there's no national exchange this basically means I have no chance to get PoS coins. Explain me this fair distribution thing.
Besides my PC consumes 60W idle, 120W loaded (playing) and 130W when mining (and playing Borderlands 2), in this terms, getting into PoW coins is almost for free to me.

Huh? You can't get on any exchange or buy into a POS coin....sounds like BS. Where do you live North Korea?

POW guys who made some from POW coins ironically complain the most about POS when they are the ones who were able to buy into them early from accumulated BTC and LTC. etc.

MaxDZ8

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My country has a law on capital export. Since there's no national exchange this basically means I have no chance to get PoS coins. Explain me this fair distribution thing.
Besides my PC consumes 60W idle, 120W loaded (playing) and 130W when mining (and playing Borderlands 2), in this terms, getting into PoW coins is almost for free to me.

Nxtblg

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Quote from: nextgencoin on July 26, 2015, 09:37:52 AM

The distribution advantage of POW is no better than POS, why should only people with really fast computers and tech types get to make the early major mining which is where many make a lot of money?

Beware: you're talkin' treason 'round here. Tongue

nextgencoin

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The distribution advantage of POW is no better than POS, why should only people with really fast computers and tech types get to make the early major mining which is where many make a lot of money?

POS at least rewards a developer IF the coin has value and also opens the playing field to anyone who wants to risk money without having to have tech skills....no different to any investing basically. Plus POS helped kill off stupid coins, once ICO happened and people couldn't make a quick buck on silly coins they started to die out. This is an advantage that most have not recognised. No one is going to make a POS Bill Murray coin....

Also the POW concept all it really does is something very illogical ie Ok you can lift this weight with you hands or you can lift it with your tongue....just making something artificially difficult is dumb. We have to mine Gold cause that's the only way to get it out of the ground...POW in that sense is like many advances in society or systems by holding onto something of the past even though it's illogical.

duphash

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Quote from: KlondikeBear on July 26, 2015, 05:02:43 AM

PoS is derived from Sunny King's code and advanced checkpoints were there since the beginning.
Any coin which has implemented advanced checkpoints is not completely decentralized, checkpoints control can be hacked, or misused by devs.
With staking you get additional coins if you keep your wallet online. It helps network, but in the same time if you are just an investor, or don't keep your wallet online and unlocked because of any reason, you are out of game.
Some PoS coins are accused to be unfair with big staking percent at the beginning.

Please argue if you dont't agree.

This discussion is interesting:

Quote from: cynicSOB on June 25, 2015, 09:50:10 PM

Quote from: markm on June 25, 2015, 07:00:28 PM

There are two problems with POS that I'd care about, and I think both have been called "nothing at stake" at least once, but they are different issues:
- One is that in POW finding a block or not depends on the (hash of the) transactions of the new block. But in POS, once you find a block you can create another one (at the same height) with different tx's for free.
- The other one is a history rewrite: in POW, if I own in the present 51% of the hashrate of some point in the past, I can do nothing with that. For example you can buy some ASIC that has more hashrate than all the network combined had in some moment of 2011. But that's useless. However in POS if I have control in the present of the private keys to a stake larger than 51% in some past then I can use that to rewrite the blockchain from that time until the present (overriding the tx's in which that 51% changed hands).

Many coins take measures to mitigate -with different levels of success- the consecuences of these two problems. However it's hard to deny that they are security weaknesses inherent to POS.

Quote from: Nxtblg on June 26, 2015, 08:51:54 AM

Quote from: markm on June 26, 2015, 04:04:11 AM

Oh wow that keys to the past trick is killer!

It certainly explains why checkpoints were introduced! Nxt et. al. improved checkpoints by making transactions irreversible after 720 blocks. In fact, cynicSOB was invited to try attacking Nxt after he managed to double-spend a minor PoS alt.

Thanks to you both for your informative replies.

So NXT solution successfully solved problem #2 assuming that noone controls 51% of coins as of yesterday.
What can be done with weakness #1 ? How can it be exploited with less than 51% stake ?

manfred

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Energy is Wealth

Inflation matters in a Pow coin and to overcome a later released coin is disadvantaged, some cheated in an attempt to overcome it which then stops it from being successful. Stacking on top whats already there ------ choo choo train.

In PoS it does not matter when you start your money for nothing enterprise (creation of Proof of Stake coin)
Endless new starts, none can get traction because always improvements in code, road to nowhere |||||| yellow ducklings in ocean

monsterer

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POS has no ongoing block production cost, which means that to attack the chain costs nothing. You can immediately see why this causes problems compared to POW.

KlondikeBear

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PoS is derived from Sunny King's code and advanced checkpoints were there since the beginning.
Any coin which has implemented advanced checkpoints is not completely decentralized, checkpoints control can be hacked, or misused by devs.
With staking you get additional coins if you keep your wallet online. It helps network, but in the same time if you are just an investor, or don't keep your wallet online and unlocked because of any reason, you are out of game.
Some PoS coins are accused to be unfair with big staking percent at the beginning.

Please argue if you dont't agree.

This discussion is interesting:

Quote from: cynicSOB on June 25, 2015, 09:50:10 PM

Quote from: markm on June 25, 2015, 07:00:28 PM

There are two problems with POS that I'd care about, and I think both have been called "nothing at stake" at least once, but they are different issues:
- One is that in POW finding a block or not depends on the (hash of the) transactions of the new block. But in POS, once you find a block you can create another one (at the same height) with different tx's for free.
- The other one is a history rewrite: in POW, if I own in the present 51% of the hashrate of some point in the past, I can do nothing with that. For example you can buy some ASIC that has more hashrate than all the network combined had in some moment of 2011. But that's useless. However in POS if I have control in the present of the private keys to a stake larger than 51% in some past then I can use that to rewrite the blockchain from that time until the present (overriding the tx's in which that 51% changed hands).

Many coins take measures to mitigate -with different levels of success- the consecuences of these two problems. However it's hard to deny that they are security weaknesses inherent to POS.

Quote from: Nxtblg on June 26, 2015, 08:51:54 AM

Quote from: markm on June 26, 2015, 04:04:11 AM

Oh wow that keys to the past trick is killer!

It certainly explains why checkpoints were introduced! Nxt et. al. improved checkpoints by making transactions irreversible after 720 blocks. In fact, cynicSOB was invited to try attacking Nxt after he managed to double-spend a minor PoS alt.

Thanks to you both for your informative replies.

Ingatqhvq

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Only one pow coin can success, that is bitcoin . and pos coin can't be a coin, but could be a platform.

duphash

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Quote from: VirosaGITS on July 25, 2015, 05:52:07 PM

Quote from: duphash on July 25, 2015, 04:02:28 PM

Quote from: jambola2 on July 25, 2015, 02:08:08 PM

PoS encourages hoarding rather than using the currency. This means that the biggest users don't necessarily want to use their coin to see uncertain growth, the natural growth of their coins through staking is enough.
PoW, on the other hand, usually means that the currency has to be sold to break even with electricity and miner costs.

The mintpal hack: https://www.cryptocoinsnews.com/mintpal-gets-hacked-pos-vericoin-fork-result/
showed another problem of PoS coins.
It is a lot easier to suddenly out of nowhere spring up with a large amount of PoS coins that you've been buying, the exchanges are fairly open.
On the other hand, suddenly creating mining power to disrupt the Bitcoin network seems harder.

So overall, I think the weaknesses of PoS are that by very design, it seems counter-intuitive to community growth and also, it can be dominated more easily if one centralized party holds lots of coins at any point, as compared to PoW where it is not as easy to gain control of the hashing power.

What prevents someone from stealing million BTC from any exchange ? I don't see how PoW prevents this.
With decentralized Asset Exchange like NXT trade.secureae.com problem of stealing from exchanges does not exist.

BTC pump of 2013 - 2014 shows that mined currency does not have to be sold and can be hoarded too.

I still don't see compelling arguments in favor of PoW.

Well there is one. In the creation of a currency, something with a value is brought in. It need to have a cost for its creations and to then be based on something. Like gold, it has a value, oil, diamonds and... electricity.

Having a cost to its generation provide to its value.

If taking something valuable from people is the only issue then why not create NXT asset, and put huge sell order that will last several years.

VirosaGITS

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Quote from: duphash on July 25, 2015, 04:02:28 PM

Quote from: jambola2 on July 25, 2015, 02:08:08 PM

PoS encourages hoarding rather than using the currency. This means that the biggest users don't necessarily want to use their coin to see uncertain growth, the natural growth of their coins through staking is enough.
PoW, on the other hand, usually means that the currency has to be sold to break even with electricity and miner costs.

The mintpal hack: https://www.cryptocoinsnews.com/mintpal-gets-hacked-pos-vericoin-fork-result/
showed another problem of PoS coins.
It is a lot easier to suddenly out of nowhere spring up with a large amount of PoS coins that you've been buying, the exchanges are fairly open.
On the other hand, suddenly creating mining power to disrupt the Bitcoin network seems harder.

So overall, I think the weaknesses of PoS are that by very design, it seems counter-intuitive to community growth and also, it can be dominated more easily if one centralized party holds lots of coins at any point, as compared to PoW where it is not as easy to gain control of the hashing power.

What prevents someone from stealing million BTC from any exchange ? I don't see how PoW prevents this.
With decentralized Asset Exchange like NXT trade.secureae.com problem of stealing from exchanges does not exist.

BTC pump of 2013 - 2014 shows that mined currency does not have to be sold and can be hoarded too.

I still don't see compelling arguments in favor of PoW.

Well there is one. In the creation of a currency, something with a value is brought in. It need to have a cost for its creations and to then be based on something. Like gold, it has a value, oil, diamonds and... electricity.

Having a cost to its generation provide to its value.

Topic: Advantage of PoW over PoS (Read 1515 times)