Topic: Annual 10% bitcoin dividends if mining were Proof-of-Stake - page 8. (Read 16688 times)

No, it's distributed. (Unless you think Bitcoin is also mined centrally, due to a few mining pools having a virtual monopoly.)

Is there any economic benefit at all to the network from such a mining? The transactions are practically handled centrally, like in banks(?)

I don't understand the question. Coins can be exchanged for goods and services in the usual way. Doing so resets their age to zero, so the receiver can't use them as mining stake for a while.

for = is there anything that I can spend them on?

Thanks for the reply itod. I'm starting to understand it a little better.

You vote with coin-days.

What are the things that I pay for / vote for?

Generally with PoS you pay with "coin-days". The longer you hold coins, the more weight they carry for voting, but the act of using them to vote resets their age to zero. So that's what you lose; not the actual coins, but the coin-days. But you do lose something, something that is unavoidable expensive to acquire (you have to buy the coins and then hold them for a time). So it is not like voting with company shares. As you say, that is essentially free once you have the shares; you can vote the same shares multiple times.

One concern is that a 51% attack could be launched by a privileged player. For example, by an ASIC manufacturer. A lot of ASICs are made in China, a country with a rather anti-Bitcoin stance. The Chinese government could compel chip foundries to cooperate. Or terrorists could, by applying extortion to the chip foundry staff.

You don't even need to be that privileged. You can ask a chip foundry to manufacture some chips just for you, even when that foundry doesn't normally deal in Bitcoin ASICs, and as they'd be new chips they wouldn't affect the general market. That's pretty much what happened when the first Bitcoin ASICs got developed: so that, but as a commercially-secret agreement. (Compare with how PS4 and XBox One contain custom chips.) The chip foundry can't tell the difference between an honest miner and one planning an attack (and they probably wouldn't care anyway). If you are, say, Saddam Hussain planning to attack financial infrastructure as an alternative to developing nukes or other weapons of mass destruction, you might need to conceal your identity through fronts.

It's easier if you can prevent new ASICs being supplied to honest miners, though. I don't follow what you mean by "respond in kind". Try to bid up the price? Where would the money come from? Kidnap the children of the staff of the chip foundry? Become the Chinese government?

I have read the thread, and there was a convincing differentiation of shares vs. coins.

With shares, you vote without working, according to how much you have at stake from previous investment.

With coins, you must pay for every vote you want.

The first one is scarcely suitable to be a basis for a monetary system, because there is no anchor, no cost that "keeps people honest" like in gold standard vs. fiat standard.

Switching back to fiat after just 5-8 years of enjoying the renewed benefits of gold would be sad.

PoS is no more inflationary than PoW. Go re-read the first post in this thread. The idea is that exactly the same number of coins gets created in each block, presumably with the same block-reward halving schedule.

We do need to reward the work, to keep miners mining, so that transactions keep getting validated and coins keep flowing. However, the deeper motivation for PoS or PoW is as a solution to the Byzantine Generals Problem. Basically, in a distributed system, conflicts are resolved by majority vote, and voting has to be made expensive to prevent stuffing the ballot-box. Proof-of-work is one way to make it expensive. Proof-of-stake is another.

Yes. And I think that's going to be immensely difficult. The spin-off idea helps, but (in my view) not enough. I doubt Bitcoin will ever be superseded by an altcoin unless some disaster happens to Bitcoin (like a massive, sustained 51% attack).

Are we rewarding from the work, or just instituting inflation? If latter, what was the point exactly..

This is hard to arrange. A rich miner with 10,000 coins could split their holding into 10,000 wallets of 1 coin each, and present to the network as 10,000 poor miners, and there-by get 10,000 times the reward.

If we assume that an other system (except mining/PoW) can more efficiently conduct the exact same work, and therefore the cost of maintaining the network would be lower, would this lead to an increase or decrease of Bitcoin market cap?

Hint: If there is a way to do it for free, what would happen to Bitcoin in this scenario?

And for starters, try to remember that changing the number of coins is irrelevant - only market cap matters and it can be divided to whatever number of coins we wish, by changing the decimal place or doing more complicated things.

To be honest, it doesn't. Only work that is rewarded in Bitcoin is maintaining the integrity of a blockchain. That's exactly what mining does. It doesn't mean that we can not find additional uses for the system, but they have nothing to do with it's core components.

Would it be possible to tie Proof of Storage to a gps coordinate for example? If as a miner, I could register an IP address to a physical and known location, earning trust over time (it's centralization - but there could be competition, anyone can register w/gps and documented physical address depending on regulators or trust of your location by the outside world) then work could be defined as transporting to and from storage, getting resources to the most effective location, addressing. It seems to me that work might be defined as almost any human endeavor that can be agreed upon by the block chain. If there is litter on the ground, and that litter can somehow be identified as lost, and it is then registered that I've moved the litter to a waste receptacle, then I've proven work. To me, bitcoin is about rewarding more people for the work they do every day. There should at least be enough coins to measure every keystroke that has ever landed on the internet - if that makes any sense.

The problem with that calculation is supply and demand.   It's simply not possible to simply double the hashrate of the network by buying it all at once.  The supply is not there.   If you were to monopolize the output of ASIC  manufacturers in an attempt to double the network hashrate, the rest of the bitcoin community would see it coming, and respond in kind.

500 millions for miners ? i think this number is  getting lower with time

No it could be limited to IP address or any other computer operation (all can be digitally reproduced). Satoshi discussed it here on Bitcointalk and argued that it was the hardest process to fake, in that one had to invest economic resources to do it and in so doing that would introduced risk and competition and efficiency, optimizing the distributing of coins.

If you can do Proof of Storage that would be a more effective distribution method than PoS. Some proposals but not invented yet. CloudCoin comes to mind as 1 of 3 attempts I know of.