Topic: Is PoW Outdated? What are the Essential Advantages of PoW Consensus? (Read 1130 times)

You can't really compare Bitcoin to a product like a computer. This is way more complex than "you have product A, then product B replaces product A because it's faster and more efficient without a security loss".

First of all, you have to point to product B. Where is it?

If it's still not there (it isn't as far as I can tell) what would take for product B to exist?

If product B existed, why would it replace product A?

Bitcoin is all about certainty. You cannot outdo the uptime without 0 hacks of the Bitcoin blockchain. 10 years and counting. Even if in theory you make a better product, Bitcoin is still the most time-tested. Similarly, there are faster stronger ciphers than AES-256, but are less time-tested, so you go with the safe thing. Bitcoin is the safe thing for anyone with enough money to move the market anywhere, if they wanted to diversify in cryptocurrency, everything else is an exercise in insanity.

   Modified your Post , to give you a little history lesson.

They used to say the same kind of nonsense about IBM verses all non-IBM computers.
IBM sold it's 1st PC in 1981.
In 2004, IBM sold all PC manufacturing to a Chinese Company.

IBM gave up, because the clones were better and the Public Knew it.

Now people repeat nonsense thinking Bitcoin will forever be on top.
While it's clones perform more transactions faster and cheaper and just as secure.
Keep believing the nonsense , that a once superior product that refuses to improve , will stay superior.

People that don't study history are doomed to repeat it.  

Any rewarding system, is pleasing to greed but winner-takes-all is too risky and discouraging because most people have a definite chance not to win anything and this makes them hesitant to join, bad for security! Let's go pooling , but wait, it is bad for security too!

Now suppose we use a winner-takes-share approach to PoW in which we accumulate works done in the network and distribute rewards accordingly. No we would have a very low unit of work and low variance consequently and average/small miners would be able to participate in consensus directly.

I know it is very challenging but it is practical and I've made enough progress to be confident about its feasibility. Stay, tuned.

But doesn't the "winner-takes-all" approach is pleasing to greed? But with that, the miners are forced to be honest, because the other path is costly and bad for the miner, and the whole network?

Since Vertcoin has been attacked (see https://medium.com/coinmonks/vertcoin-vtc-is-currently-being-51-attacked-53ab633c08a4 )
We can say that having an exotic algorithm for mining is not something that can protect a blockchain on a long term. One day or another, ASIC having more memory and more storage, the exotic algorithm is solved and can run on these mining gears, opening the door to a 51% attack.

So why then re-creating the wheel with new mining algorithms. To protect a blockchain, there are different solutions apart from changing POW to something else.

My personal opinion is that so far POW is the best, easiest solution. All the problems have been solved and we know the risks. We only need to find solutions. The 51% attack problem can be easily fixed by controlling the maximum hashrate through the pools and lock the new blockchain to a limited pools that are limiting the maximum hashrate of the miners for example. An idea that would need a specific thread to debate.

PoW Unsolved Problems

Pooling :  Increase the odds that a few individuals (4 or less) could collude and 51% attack the network

Energy Waste: Exponentially increasing drain on world's energy supply
1. Increasing Energy Rates for others that have nothing to do with crypto
2. Security Danger, of not being able to hide the locations of warehouses full of asics.

Centralized controlled as only the rich elite can afford to be miners,
and as such eventually enforce censorship on who may transact in BTC.

Increased transaction fees due to developers refusal to increase onchain scaling ,
as their preference for offloading like LN fixes nothing.

Ignoring the problems is not a fix.

Multiple layers of confusions here:

Firstly, Vertcoin is just another ASIC-resistance bitcoin forks, (one of the most decent ones) and has nothing to do with pooling problem.

Plus:

• POW is more than Satoshi Nakamoto and bitcoin. The idea is burning energy to prove responsible behavior in p2p communication. Satoshi added the idea of generating money as an incentive system for participating in such a network but when it came to implementation (detail design), s/he made a mistake by choosing a winner-takes-all approach to this idea which is flawed because of mining variance and its centralization consequences.

Since Vertcoin has been attacked (see https://medium.com/coinmonks/vertcoin-vtc-is-currently-being-51-attacked-53ab633c08a4 )
We can say that having an exotic algorithm for mining is not something that can protect a blockchain on a long term. One day or another, ASIC having more memory and more storage, the exotic algorithm is solved and can run on these mining gears, opening the door to a 51% attack.

So why then re-creating the wheel with new mining algorithms. To protect a blockchain, there are different solutions apart from changing POW to something else.

My personal opinion is that so far POW is the best, easiest solution. All the problems have been solved and we know the risks. We only need to find solutions. The 51% attack problem can be easily fixed by controlling the maximum hashrate through the pools and lock the new blockchain to a limited pools that are limiting the maximum hashrate of the miners for example. An idea that would need a specific thread to debate.

Plus your opinion on Matt Corallo's BetterHash? I believe BetterHash would solve it enough, demoting pools to mere coordinators, and distributors of rewards.

Unfortunately: I'm not as optimistic as you about BlueMatt's proposal, BetterHash.

1-It seems impractical to me for pool operator to accept like millions of different Merkle roots and query them with miners to discover the actual transactions included. Please  note that the operator should do this for each share.

2-Having a coordinator/reward distributor is not a good choice for protocol design. Note again that to have a low variance you need very large pools and no matter what they do they make the network vulnerable to regulatory and censorship for the least.

As of my solution, stay tuned

Plus your opinion on Matt Corallo's BetterHash? I believe BetterHash would solve it enough, demoting pools to mere coordinators, and distributors of rewards.

FYI, I've solved pooling problem like hell and besides budget and the need for contribution it is just because of governance ambiguities that I hesitate to go any further. Anyway, from a pure theoretic point of view, winner-takes-all approach and pooling pressure are not inherent to PoW.

In your Opinion :

In My Opinion,
BTC Currently has the Highest Market Price, (There are no guarantees it holds that position.)

However Value implies utility, and BTC has no use except holding and selling as it's onchain transaction capacity is limited.
Also if one subtracts the energy waste it is causing globally, it's value declines dramatically.
IMO: It's overall costs (including environmental) exceeds it value.

IMO: BTC security is dependent on trusting 4 pool operators while Litecoin is dependent on trusting 4 pool operators.
Security is exactly the same and energy waste is irrelevant , as 4 individuals are all that is blocking a short term 51% attack on both coins.

IMO: Litecoin & Dogecoin are just as reliable , as no one is reporting missing transactions or lost payments.
        Plus they are definitely quicker.

Dude, you have not fixed the PoW pooling problem which you admit is a problem.
Because of it , Litecoin & Bitcoin are the exact same security. Trust of 4 pool operators
(Sad part is even  if you release a fix, the btc community probably won't include it, due to their stance their are no problems.)

Sell Price and True value are not the same, the Tulips revolution should have proven that.

Price fluctuates with public perception it is not the actual value.

The way the Da Beers have manipulated the diamond markets for years , is proof price is not value.


FYI:
Ask yourself this , with no counter viewpoints from individuals that have not drank the bitcoin kool-aid,
and nothing but yes-men like windfury thinking that there are no problems,
set bitcoin up, just like IBM, ignoring problems will eventually cause a market exit.
But I'll leave the topic to the yesmen now, as I have said my peace.  

Yes stupid , it is open to debate in a Free Society.

Just as many people recognize the fall of IBM before it was apparent to the public ,
same thing is happening with Bitcoin.

Compare the following
Is Bitcoin Cheaper to Produce than Alts?                
Does Bitcoin Offer improved performance over Alts?  
Does Bitcoin have a higher Transaction volume than Alts?
Are Bitcoin Transactions faster and cheaper than Alts?
Does Bitcoin Energy Waste really make it more secure than Alts?

The Answer is No to all of the above.

   Modified your Post , to give you a little history lesson.

They used to say the same kind of nonsense about IBM verses all non-IBM computers.
IBM sold it's 1st PC in 1981.
In 2004, IBM sold all PC manufacturing to a Chinese Company.

IBM gave up, because the clones were better and the Public Knew it.

Now people repeat nonsense thinking Bitcoin will forever be on top.
While it's clones perform more transactions faster and cheaper and just as secure.
Keep believing the nonsense , that a once superior product that refuses to improve , will stay superior.

People that don't study history are doomed to repeat it.  

Contrary to the popular belief that keeps getting repeated, mining is getting increasingly decentralized.
Bitmain is no longer the king in town. Jihan Wu thought he was the Caesar, and he ended up kicked.

IBM works, gets IBM PCs secure and continues to do so.
IBM PC Clones haven't been through what IBM has been, so they are objectively inferior and of less value.

All non IBM and non-IBM-PoW is not secure, actually centralized sockpuppetry.

No, most PoS coins don't run a checkpoint server.
Peercoin Hybrid PoW/PoS does,

However the following PoS coins don't run a checkpoint server
Blackcoin, Mintcoin, PandaCoin, Zeitcoin

Show us what you know which coins run a checkpoint server dumbo?

Bitcoin is reliant on just 4 individuals (pool operators) , so your btc security is a issue of pure trust, the energy waste is meaningless.

FYI:
While not running a checkpoint server , your beloved bitcoin does still have checkpoints in the client code.
Maybe you should petition the devs to completely remove them.  

I don't understand how a low difficulty and dividing the block reward will prevent miners from pooling, i.e. low variance. Would it really make a big difference if there is a blockreward divided by 'tens of thousand of shards' or a single block reward, because each of this shards would be treated like small 'blocks' that have a value and big mining farms would mine most of them anyway.

If governments could collude to 51% the network, they also could collude to stop destruction, pollution, war and starvation. The fact, that they can't tells me, that Bitcoin will be safe.

You are welcome.

The ultimate solution to mining variance is low difficulty (and not forming syndicates/pools  because it is the operator who decides about the block contents) and it is achievable by retiring winner-takes-all philosophy and replacing it by a contributor-takes-share alternative.
Youcan imagine several protocols for this but the one I've become totally fascinated by, is when you combine this idea with a sharding algorithm. Principally it is possible because each shard is responsible for a part of the network and you need to distribute both incentives and costs.

It is what I've mentioned earlier in my previous post, both centralization and scaling problems have roots in the same flaw: winner-takes-all. In my design the whole mining job is divided between tens of thousand of shards, each with very low difficulties, so very low variance for small miners and it is how we get both birds, decentralization and scaling, with just one stone.

As of your speculation about governments engaging in mining, I do agree it will be good news for bitcoin but not for centralization because we are talking about very unreliable actors with high possibility of collusion and worst intentions ever, we need small farms, individual miners, hobbyists, ... all over the world to decide about every single block they mine to resists against such possibilities, otherwise it would be easy for governments to push on pool operators and impose censorship on individuals and even nations. The only force which is able to resist such scenarios is free will of small miners who can directly act and decide.