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Proof of stake creates more problems than it solves.
I would add the following POS attacks to your list:
* Custodial stake
Exchanges and other large services which store user funds in their own wallets gather a very large stake, which often would give them majority power of POS block generation if they were to abuse it.
I would add the following POS attacks to your list:
* Custodial stake
Exchanges and other large services which store user funds in their own wallets gather a very large stake, which often would give them majority power of POS block generation if they were to abuse it.
What we see in practice is that the dominant exchange for NXT (bter before, now poloniex) only have around 5% of the coins in their custody. They need 10 times more to do a 51% attack which is very unlikely to happen.
With Clam it is indeed the case that one successful business does have more than 51% of the coins in custody so it is more centralized than bitcoin. However it has the right design so that over time, if the coins is successful in gaining adoption, more and more people will validate transactions and it will become more decentralised, in contrast to bitcoin that over time becomes more and more centralized.
Also note that eventhough Clam is currently in constant 51% attack vulnerability the likelihood of a 51% attack is much lower than bitcoin as the custodian would harm himself the most of all by destroying this coin where his whole business depends on. Bitcoin however, due to it's high market cap and visibility, has many enemies that could easily invest 100 million in mining equipment or threaten a few mining operators to do a successful 51% attack.
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* Chain freeze
Once a majority stake holder becomes the dominant block producer, they can withhold all blocks forever, bringing the entire chain to a permanent halt, correctable only with a hard fork.
Once a majority stake holder becomes the dominant block producer, they can withhold all blocks forever, bringing the entire chain to a permanent halt, correctable only with a hard fork.
True, as I also explain in my video, once you succeed in a 51% attack with a POS coin and own 51% of the coins, you are unbeatable and can attack the coin continuously without anyone able to stop you. This however I don't see as a big problem. It's inherent to high security, that once it does break, you're fucked. The problem is that bitcoin has way too low security. You only need, not min 51%, but max 5% of the coins in bitcoin (and liquidate them for mining equipment) to do a successful 51% attack.
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* Shorting attack
A whale takes out a large short of a POS coin at the same time he buys an equal portion of stake, such that his overall position is neutral.
He then uses his stake to double spend by creating blocks continuously (whenever he is permitted to do so) thereby driving the price of the currency down until he is ready to close his short in profit.
A whale takes out a large short of a POS coin at the same time he buys an equal portion of stake, such that his overall position is neutral.
He then uses his stake to double spend by creating blocks continuously (whenever he is permitted to do so) thereby driving the price of the currency down until he is ready to close his short in profit.
I can't follow your reasoning here but I do know that to short you need the coins as well. Who is going to lend you 5%, let alone 20% of the coins? Extremely unlikely.
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In addition, I would say the chief disadvantage of POS over POW is that the security model in POS is much weaker than POW; block generation probability/cost is a constant in the amount of stake you own, whereas in POW the cost of block generation is super linear in the number of blocks. This makes attacking a POS chain cost free under the shorting attack described above.
Nice theory but in practice NXT, the first 100% proof of stake coin is rolling for 2 years now and a 51% attack has not even come close to success. In the meantime many other Proof of Work coins have been attacked successfully and even bitcoin is in dire straits.
