Topic: Annual 10% bitcoin dividends if mining were Proof-of-Stake - page 11. (Read 16632 times)

Bitcoin Core developers share this intelligent concern, namely "the rich get richer" problem. Indeed Europe and the USA are reading an economic best seller on this topic - that I have downloaded from a tip on this forum to my kindle.

This gets quickly into a defense of the freedom of capital to seek its wisest custodian, including the dumb wisdom of never selling an income-producing asset.

I concede your point utterly, claiming without proof, that the political process will evolve to fairly mitigate this problem. It is bigger than even Bitcoin and will be solved or otherwise dealt with by various jurisdictions worldwide in the fullness of time.

Meanwhile, I for one, favor the concentration of great wealth in the hands of those saved it up and boldly spend it to advance our civilization as they see fit - even to Mars.

thank you for making an effort to be polite, 'Luddite' remarks are not appreciated and I feel that you are better than that.
However, here is what I see...there are already PoS coins available on the toy exchanges, some of which will provide a much higher stake than the 10% which is being discussed. I don't see why PoS should be introduced into Bitcoin, when one can simply exchange their Bitcoin for say; Peercoin, or TEKCoin, hold it for a year until suitable stake is accumulated and cash it back to Bitcoin. I do also; however, agree that Bitcoin is evolutionary, and without trying to sound like one of the greedy large farming operations myself; you'd have a shitstorm from ASIC manufacturers if this was to go ahead.

So, may I ask, is the true purpose of PoS, to reduce electricity use? to bring down mining difficulty? and make the rich, richer?

I concede, it would do all of the these three things but really, none of these are in the best interest of Bitcoin. We would see value plummet and BTC price hit the floor.
If it were to be accomplished, it certainly should not be in the near future; having had only one block halving, in mining terms, we are still early adopters and Bitcoin is still very young. I feel we would be forcing our cryptocurrency to 'grow up' before it's time.

PoS? well maybe, yes, but only after all 21million coins have been mined. 

You may be right.  The truth is I just don't know.

The only thing that is clear right now is that we DON'T have consensus

Well, if there is a risk of large and unexpected consequences, wouldn't it be better to make a more simple change rather than a more complex one? It seems to me that a complete shift to PoS would be simpler than merging PoW and PoS, though that is just my intuition, I have no technical knowledge of cryptocurrency.

I want to know that too.

well mostly because of this:

That seems more complicated and I don't understand why it would be better.

Lets talk as miners then, as my very first posts on this forum concerned mining. Here is a photo of one of my three mining rigs. This open design rig has 6 x 5770 cards that hash at a total 0.98 MH/s performing altcoin scrypt-mining for renters. They pay me in bitcoin, which indeed subtracts from the altcoin economy and adds to our Bitcoin economy. These cards despite their age, mined tens of bitcoins for me back when BTCGuild was just getting started. I abandoned mining when SHA-256 ASICs arrived to begin the exponentially soaring difficulty that continues to this day. I did not then, and will not now pre-order ASIC rigs whose return on investment is so uncertain. I will migrate the litecoin-compatible scrypt-mining rigs to Vertcoin-compatible scrypt-N when scrypt-ASICS arrive this year. I will keep running those loved rigs for a long time when I move them to Colorado to heat my mountain home.



I ask you, as a small scale bitcoin miner, have you run the numbers to determine whether you would be better off simply holding bitcoin instead spending cash on  ASIC rigs?

But I think your main objection is belief that bitcoin values will drop if PoS is introduced into Bitcoin. In the best possible world, PoS adds great value to bitcoin as less of daily mining reward gets sold to pay for power and new rigs. Holders are motivated not to sell and that lifts prices. Interest will heighten, especially when 401-K investment funds observe that not only does bitcoin appreciate, it also pays high dividends.

I would rather see a blend of PoW and PoS.

Use PoS to improve security while leaving
PoW that people are used to and trust.

I think you misunderstand the proposal. The proposal is to shift Bitcoin entirely to PoS, not merge PoS and PoW. In a PoS system there is no mining and no reason for massive mining operations to exist. 

I totally understand you and I respect and admire what you have done. Bitcoin would not be where it is today without you. All I am saying is that if there are major improvements that can be made to Bitcoin, it should be done. I do not believe in tradition for the sake of tradition. Bitcoin is in a much different place today than it was a few years ago.

In future when majority of the coins were mined, people might consider switching to a POS system, since the incentive to mine will get less (if a very low fee is still preferred by users) and the system will become vulnerable. But that is not going to happen in decades

Then you clearly misunderstand why people become Bitcoin enthusiasts (at home miners).

I became interested in mining bitcoin because I am a tech geek. My wife works in a bank and If it were the accrual of funds that I wanted, I could easily get a valuable fiat product, which could would be monitored and tracked and would pay me (some form of) stake/interest. Now, although I am a very small investor (as would be the same case with Bitcoin) I see many massive investors high above me, accruing their own share of ~whatever 10% will accrue them.

lets take ABC Mining Farm (fictitious name) for example - to add PoS into the Bitcoin framework, you are not actually making it less worthwhile for ABC to exist, and build bigger datorhalls, but you are providing more of an incentive to those massive operations, to become bigger. This is already proved in my case above; massive fiat banking investors become richer, small investors become poorer (the financial divide becomes greater).

The only thing a PoS system in Bitcoin would do, is widen the gap.

The price will immediately crash to the coin's production cost, since miners have the motivation to immediately cash out large gains

Answer this question - how many coins did you spend on your mining operation in the past 12 months, including equipment, energy, labor, and everything else, and how many coins did you mine?

The difference is that you would be getting 10 percent more coins, not 10 more fiat. I don't think fun has anything to do with this.

Sorry, but that isn't adding any value to the conversation.

I'm not saying I "want a PoS" necessarily.  Some are saying that.  
At the very least, there are real reasons why PoS merits discussion for Bitcoin.

Even Peter, who is pro PoW, is interested in the conversation and seeing
what would happen with PoS.

I value your opinion too, but I would like to hear the arguments against PoS,
not just "move to an alt coin".

or I could go buy an ISA from my bank; but that's NO FUN, is it?

The point of PoS is that mining is unnecessary. You seem to making a Luddite argument. Instead of investing hundreds of thousands or millions into a massive mining operation, you could just buy a lot more coins and spend your time relaxing on the beach sipping your favorite beverage while you collect 10 percent each year rather than spending time and effort every day maintaining your mining operation.

https://bitcointalk.org/index.php?topic=320404.0;topicseen

please move over to a PoS coin, if you want a PoS coin and leave Bitcoin as it is.