Topic: It's about time to turn off PoW mining - page 30. (Read 39732 times)

Forging a POS coin allows for easier wealth accumulation than with PoW as existing ASIC manufactures have to take risks with investments and reinvest their gains in new equipment and miners are forced to spend a majority of their profits on new equipment and electricity. POS and DPOS is essentially a framework where large stakeholders collect usury off the network and even if you have a very fair initial distribution model you will have unequal wealth accumulation over time because most of the profits are compounded instead of reinvested at a loss.

With PoW you can easily know in realtime if there is a mounting risk from a mining pool, ASIC manufacturer, or miner. With POS or DPOS one individual can slowly buy up a 51% stake under many Pseudonames with no one noticing. Governments cannot build a large mining factory without leaks as evidenced by the high  amount of top secret intelligence constantly leaking. Some people mistakenly assume that Snowden was the first leaker of the NSA programs when people in the IT field where knowledgeable of many of these programs shortly after 9/11 and all Snowden revealed was further details.  The bitcoin community would find out about any special program and react just like we constantly do when a mining pool gets near 50%.

 

I'd argue PoS miners are much more security minded, since they have to pretty much keep the wallet hot (online), even if briefly, in order to mine with it (though I believe in DPoS system you don't have to, since mining is delegated to the delegates, you can put your funds in cold storage). Also they are very much de-centralized, instead of concentrated in a pool, can you imagine how hard it is to obtain the identity of 10,000 PoS miner, their IP address, and then some how access their mining PC etc...

I'd be much more worried that discus fish and ghash.io getting hacked simultaneously (imho a much more likely scenario) and the attacker instantly gain 51% in Bitcoin.

Okay - am coming around to your point of view now - but one point still bothers me which is the *hacking point*.

With PoW you can't *hack the proof* you have to "do the work" (unless a fundamental flaw is found with SHA256 which would probably screw up all cryptos that exist at the moment).

It may be much easier to *attack the wallets* of stake holders (via keyloggers, etc.) in order to gain the stake without having to spend "astronomic amounts" of money (might only require a few million to recruit a team of black hats and exchanges would be a major *weak point* with this vector).

It's no more far-fetched than they spending astronomical amount of money to attack a PoS system (and without guaranteed success, like attacking a PoW).

Australia could do it if they could do it economically and with a competitive price. They can't make money from it is the only reason they are not doing it. But if like you said, when the government don't care about printing more money, then they could easily do it. China is not some technologically advanced country, in fact all their chip maker machines are imported from ASML, which is an European company. China have cheap labor, that's about it.

So they are going to somehow set up a "major manufacturing plant" to create ASIC that *no-one knows about* in order to attack Bitcoin?

Seems a little far-fetched to me (western governments are not so good at hiding stuff like eastern ones are).

Because it's cheap, not because the US or Europe don't know how to manufacture ASIC.

Hmm... then why are the vast majority of ASIC manufactured in China?

(the hurdles are perhaps more economic as well as social)

I am pretty sure Australia (the first world country that I come from) could *not* do this as they don't manufacture nearly *any electronics* nowadays.

Bitcoin is still experimental with a market cap of 6-10 billion. Nxt has a market cap of only ~36 million for less of a history than Bitcoin which makes your claim laughable. Whether or not an successful attack has been made against a PoS coin doesn't address the valid security criticisms of the framework and is false as well:

http://www.cryptocoinsnews.com/mintpal-gets-hacked-pos-vericoin-fork-result/
http://coinjoint.info/navajo-suffers-double-spend-attack/

Additionally, any bugs or flaws within a POS or DPOS exploited by a single hacker can be used to attack the network regardless of the intentions of delegates or the distribution of the POS pool. with PoW there are real resources being used so even if a vulnerability is exploited to hijack a miner they will quickly correct the issue because they are losing money and hijacking miners all around the world that use different equipment , different pools, and different uplinks is a whole lot more difficult than finding a flaw within a wallet of hijacking a few large stakeholders computers.

Yes, they can just buy from existing miners, with a bit of a premium if they want the equipment fast. Also any first world government can easily mass produce ASIC equipment if they wanted to do it, there's no technical hurdles.

Too quick on the reply - the "resource needed to gain >50% is ASIC" and they are in short supply - so a government would have to set up manufacturing at least as good as the world's best (and keep it secret) to do so.

Of course they could just try and "purchase" existing ASIC so that would depend upon the pools as to how easily they can be *bought out* (and whether people notice this going on).

In that case, it will cost the "government" much less to destroy a PoW chain. Also it might not even be possible to buy up 51% in a PoS chain if the coin is simply not for sale. But it's ALWAYS possible to get 51% in a PoW chain.

"In PoW even if a government wants to spend billions to kill of Bitcoin they just don't have the ASIC equipment to do so."
Why wouldn't they have the ASIC equipment? what's keeping them from obtaining ASIC equipment? I can see a variety of ways for them to obtain the equipment. If they want them fast, they can just offer to buy the equipment from current miners at a premium. If they have time, they can mass manufacture the equipment, easily.

From a "normal person's" point of view I'd agree - but from a "government's point of view" things change (as they can just print their own money as long as they wish).

So if a government wants to "destroy" a PoS chain then they can just buy up (paying more and more as they print more and more) and they will succeed (the cost is always *zero* for them at least in terms of the "fiat").

In PoW even if a government wants to spend billions to kill of Bitcoin they just don't have the ASIC equipment to do so.

Except Ghash mostly owns the hardware and can do as they like with them, cloud mining is getting more and more popular in PoW mining.

I've already explained in the previous pages, for an attacker that is starting from scratch, it's MUCH cheaper to attack PoW system. It's nearly impossible to 51% attack a PoS system unless you spend an astronomical amount of "real money".

Now if you are constructing a scenario where the attacker already owns a substantial amount of the PoS currency, then it's no different from a PoW attacker that already owns a substantial amount of the network mining power, of course it's much easier for them to attack, PoW has no advantage here neither. On the other hand, in the PoS system, the attacker would be also attacking himself, since he has an extremely large stake in the eco-system, costing the attacker large amount of "real money". So PoS system would again win in this scenario.

I feel this "nothing at stake" argument is being used without proof of its existence. Even though theoretically it's possible, but it also goes against human nature and logic. Why would you attack and destroy the reputation/value of the currency, that you hold an extremely large stake in? it makes no sense to attack yourself and destroy your own wealth.

Those aren't miners but mining pools. Mining pools have historically grown and faded over time and miners can switch pools and often do instantly.

The beauty with bitcoin is I don't need to directly trust the intentions of people or delegates. Trust is built upon the fact that there are great incentives to play honest and it costs real money to make an attack. With DPOS or POS their is only the first and not the second, thus Bitcoins weakness is also its strength as an added layer of security.

Whether or not one person can be trusted as a respectful member of the community or not should should not be the concern. We should focus on decentralizing bitcoin to a point where trusting a small group of humans isn't needed as all.

Delegates can have the best of intentions and be corrupted over time, by special interests(lobbyists), misguided decisions, changes in character, or simply being a target by a hacker who holds them hostage or gains access to there vote through compromising their systems.  

Okay - got it - you like the Peercoin approach that "starts with PoW' then turns into PoS (just wanted to be clear about that).

You can make another thread for fair distribution discussion, it has no relevance to this discussion. Also I already told you, you CAN use PoW to distribute in a PoS system, so unless you are calling PoW distribution unfair, otherwise this discussion is over.

2 miner (discus fish and ghash.io) controls 40%-60% of the Bitcoin network, how is it easier to collude with 51 delegates?

Delegates are usually highly reputable members of the community, they also earn a small amount of fees for being a delegate, and at the first sign of dishonesty, they will be voted out. If they can't be trusted, why would you ever trust an anonymous miner who possibly have 0 stake in the eco-system?

It seems we are arguing in circles now - so how do we get the "fair distribution" for your PoS without using the Bitcoin blockchain nor an IPO nor anything anonymous?

http://bitshares.org/delegated-proof-of-stake/

Delegating voting to  representatives does not address the "Nothing at stake" weakness. It simply makes it easier to collude with fewer delegates than gaining a consensus of miners. There is no electrical cost and/or equipment cost with an attack in a POS or DPOS framework.

Your fears with PoW and its current pool centralization, limited ASIC manufactures, and limited miners is valid, but what we should be addressing are these problems directly and not codifying centralization through delegates into the framework as that represents one step forward and two steps backward in time.

What we should focus on to improve bitcoin is
1) Encourage the use of decentralized p2p mining pools
2) crowdfund a company to create ASIC appliances. Would be better if the ownership of this ASIC manufacturer was controlled and owned by a large pool of bitcoin users.