Topic: It's about time to turn off PoW mining - page 34. (Read 39732 times)

Just plain wrong on all accounts.

51% PoS stakeholders have every reason to reverse transactions. Because they use TOR, nobody knows they even have 51%. They can attack transactions to grow their wealth. When they are rich enough, they can sell their stake. With PoW, they have to invest in equipment that is traceable so they can't attack anonymously. When they want to cash out, their equipment is obsolete and worth much less. As far as the value of the ecosystem, 51% is 51%. That means just over half, not "several times the value."

It's only logical that the 51% group of holders will not have bad intentions against a currency that they themselves have a majority stake in.

You have no guarantee in a PoW system neither, since it only needs about 10% of the value of the eco-system to 51% attack. Also the other problem is you don't even need to own the currency to attack it, therefore the attacker have no stake in the system.

To 51% attack a PoS eco-system, you yourself must be an extremely large stake holder in the eco-system, which means you are basically attacking yourself. Not to mention you need extremely large amount of resources, at least several times the value of the eco-system, to achieve 51% in the first place.

It's only logical that the 51% group of holders will not have bad intentions against a currency that they themselves have a majority stake in.

In a PoS currency how do you guarantee that a 51+% stake holder remains a benign actor?

Do you have more info on this?  Are checkpoints made every so often?  If someone had a 51% starting today how long could they go before a checkpoint?

Actually the mining cost of the whole network is what backs bitcoin's value.  Since digital currency is not backed by any government or physical assets, the only thing that can baseline its value is the cost, no cost = no value. I can not think of anything that has value without a cost

Of course the cost means the lowest possible cost, which is already very energy efficient today. If you do those hashes using CPU you will cost millions of times more electricity

My reasoning:
* Each transaction in Bitcoin costs hundreds of time more than a credit card transaction to process. (currently this is subsidized by inflow of capital into the eco-system, so users haven't felt the full effect).

* Hundreds of millions of dollars are paid to mining hardware vendor and electricity company. This will continue year after year, and only will grow more and more as Bitcoin grows bigger. The Bitcoin community is being bled dry. The price action this year shows that even with massive amount of big name adoption and good news, the inflow of capital is having trouble to keep up with the insane surge of mining cost.

* There are better ways to secure the network, for example Bitshares's DPoS system. Money is re-invested into the eco-system and community, instead of paid to hardware vendor and electric company.

* If Bitcoin doesn't drop PoW and embrace the much more efficient DPoS system. I can see Bitshares eventually overtake Bitcoin. Simply because Bitcoin eco-system is bleeding hundreds of millions of dollars each year, and the DPoS re-invests the money and grows the eco-system/community each year.

Btw, you can hold BTC in Bitshares 

1) I'm assuming you're including the block reward as part of the transaction "cost".  That's not a valid comparison, since that is money injected into the network.  Even if it was, upon reduction to negligibility of the block reward, that number will drop dramatically.  The free market will eventually settle on what makes a fair transaction cost is in absence of a block reward.

2) So hundreds of millions of dollars is better paid to people who hoard Bitcoins?  Won't PoS this only increase the problem of hoarding?  And honestly, I don't care if miners have to sell 100% of their coins to make a buck.  So be it - the market will settle on an appropriate price for Bitcoin with the increase of Bitcoin supply on the exchanges, and that will be that.  There's no such thing as "The Bitcoin community is being bled dry", as you would like to suggest.  The price is being held down, perhaps, but is that the only stick with which we should measure success?  To me, it is an excellent thing, because a lower price means a better distribution of Bitcoins among people.  More people holding Bitcoin = better long term success of Bitcoin.  PoS would encourage fewer people to hold Bitcoin (because fewer people would want to sell) = lower long term success.

3) I disagree, for the reasons listed in #2.

4) If Bitshares proves itself to be a better system, then so be it.  The free market will decide.  I don't see any reason to fork Bitcoin away from what it is not to match another system that already exists.  Let each system with its unique variables stand on its own, and we'll see which is the better system simply by watching what the free market decides.

This is very hard and in fact the biggest issue with the approach (how do you know that a group of "large stake holders" haven't decided to collude?).

I think PoW is not going to die any time soon and that PoS approaches can be used to create "other chains" which will probably be "less secure" (but much more energy efficient).

In a PoS currency how do you guarantee that a 51+% stake holder remains a benign actor?

The key to this scenario is that they would need to activity attack the network by secretly mining and then reverse the past transactions (or perform some other attack). If they simply have 51% of the hashpower and do not launch an attack then nothing would happen.

You give a good example of how it would be cheaper for someone to launch an attack, but you fail to mention the fact that if the attack was not launched then the would-be attacker could use their equipment to mine legitimately and earn a lot of bitcoin.

My reasoning:
* Each transaction in Bitcoin costs hundreds of time more than a credit card transaction to process. (currently this is subsidized by inflow of capital into the eco-system, so users haven't felt the full effect).

* Hundreds of millions of dollars are paid to mining hardware vendor and electricity company. This will continue year after year, and only will grow more and more as Bitcoin grows bigger. The Bitcoin community is being bled dry. The price action this year shows that even with massive amount of big name adoption and good news, the inflow of capital is having trouble to keep up with the insane surge of mining cost.

* There are better ways to secure the network, for example Bitshares's DPoS system. Money is re-invested into the eco-system and community, instead of paid to hardware vendor and electric company.

* If Bitcoin doesn't drop PoW and embrace the much more efficient DPoS system. I can see Bitshares eventually overtake Bitcoin. Simply because Bitcoin eco-system is bleeding hundreds of millions of dollars each year, and the DPoS re-invests the money and grows the eco-system/community each year.

Btw, you can hold BTC in Bitshares 

A 51% attack is not just a mining pool getting 51%.  If some entity got 51% and mined secretly all past transactions could be wiped out from the block they started mining.  It could mean weeks or months of transactions could be wiped out.  If someone wiped out the last 6 months of Bitcoin transactions I think that would kill it.  The cost analysis that I have seen calculated a price based on buying equipment from vendors.  A 51% attack like this would mean the entity would make their own hardware.  If they had control of places that manufacture chips that would make a big difference with the cost.  I don't think it would happen but it is not completely out of the question.

Satoshi client have checkpoints, (9.3.1rc at block 295.000 I guess) so you cannot publish 6 months old longest blockchain, most Bitcoin clients will simply reject it.