So i told him that BTC is only pegged to USD in order to trade and make money. But the value will always be 1 BTC = 1 BTC. As long as you hold BTC, you owe that much BTC.
Bitcoin is paired to USD but not pegged to it. Stable coins are pegged to assets to retain their value, Bitcoin is not a stable coin, but is paired with different fiat currencies to show its value. 
Topic: My arguement with a friend who likes POS instead of POW. - page 2. (Read 199 times)
PoW
if someone has 1000 asics (140peta(0.14exa)
if the network is 280exa they will get ~ 0.05% of rewards
if someone has 100 asics (14peta(0.014exa)
if the network is 280exa they will get ~ 0.005% of rewards
if someone has 10 asics (1.4peta(0.0014exa)
if the network is 280exa they will get ~ 0.0005% of rewards
you dont need to have big horsepower
what hash you put in results in same ratio of reward out
someone paying 1000x input gets 1000x output
someone paying 1x input gets 1x output
thus if someone with 1asic is getting 0.00000312 a block average
thus if someone with 1000asics is getting 0.00312000 a block average
the result is then when looking at the bitcoin price they both make the same % of profit/loss
PoS is where someone locks up value (their stake) and gets free money for doing no work
when locking value into central custodian, that custodian if it has enough stake can change rules
and users wont want to reject that custodians changes because rejecting it means losing their own stake(stake penalty).
ethereum for the last year has not allowed people to un-stake from their custodian thus they cant jump to a different custodian to then reject a change without penalty. thus being locked to a custodian makes that custodian have power
PoW is where people can move to a new pool in under 3 seconds, meaning a pool has to stay honest or lose its workers(hashrate)
as for the environment /eelctric debates:
PoW even if the pool stratum server is in texas or iceland or thailand.
if you have XXXX asics you dont need to have them locked to one pool/stratum nor the same location as the pool
you dont even need your asics in one physical warehouse
you can have XX shipping containers with XXX asics each spread out in different neighbourhoods/states/countries linking to pools in other locations
many large asic farms are set up in regions of renewable area's doing private contracts with energy companies for supplies of excess renewable cheap energy
oh also tell your friend this warning
ethereums base mining cost bottomline(cheapest mining) was ~$800/eth when ethereum was PoW
the market above that speculated at a ~1.5x-6x
when it changed to PoS that bottomline cost(stake cpu cost of masses) become ~$40
the market for ethereum is now speculating at >35x
this is too high. the reason why ethereum has not had its price correction yet is due to staking being stuck in locks with no way YET to unlock stake for ethereum to sell their proceeds
its been held artificially at pre PoS levels due to other market arbitrage factors
as soon as un-staking is possible expect your friend to see the correction from a 35x+ speculation back down to a rational 1-6x speculation
(last year $1.2k-$4.8k) after unstaking is able ($60-$240) is the expectation
if someone has 1000 asics (140peta(0.14exa)
if the network is 280exa they will get ~ 0.05% of rewards
if someone has 100 asics (14peta(0.014exa)
if the network is 280exa they will get ~ 0.005% of rewards
if someone has 10 asics (1.4peta(0.0014exa)
if the network is 280exa they will get ~ 0.0005% of rewards
you dont need to have big horsepower
what hash you put in results in same ratio of reward out
someone paying 1000x input gets 1000x output
someone paying 1x input gets 1x output
thus if someone with 1asic is getting 0.00000312 a block average
thus if someone with 1000asics is getting 0.00312000 a block average
the result is then when looking at the bitcoin price they both make the same % of profit/loss
PoS is where someone locks up value (their stake) and gets free money for doing no work
when locking value into central custodian, that custodian if it has enough stake can change rules
and users wont want to reject that custodians changes because rejecting it means losing their own stake(stake penalty).
ethereum for the last year has not allowed people to un-stake from their custodian thus they cant jump to a different custodian to then reject a change without penalty. thus being locked to a custodian makes that custodian have power
PoW is where people can move to a new pool in under 3 seconds, meaning a pool has to stay honest or lose its workers(hashrate)
as for the environment /eelctric debates:
PoW even if the pool stratum server is in texas or iceland or thailand.
if you have XXXX asics you dont need to have them locked to one pool/stratum nor the same location as the pool
you dont even need your asics in one physical warehouse
you can have XX shipping containers with XXX asics each spread out in different neighbourhoods/states/countries linking to pools in other locations
many large asic farms are set up in regions of renewable area's doing private contracts with energy companies for supplies of excess renewable cheap energy
oh also tell your friend this warning
ethereums base mining cost bottomline(cheapest mining) was ~$800/eth when ethereum was PoW
the market above that speculated at a ~1.5x-6x
when it changed to PoS that bottomline cost(stake cpu cost of masses) become ~$40
the market for ethereum is now speculating at >35x
this is too high. the reason why ethereum has not had its price correction yet is due to staking being stuck in locks with no way YET to unlock stake for ethereum to sell their proceeds
its been held artificially at pre PoS levels due to other market arbitrage factors
as soon as un-staking is possible expect your friend to see the correction from a 35x+ speculation back down to a rational 1-6x speculation
(last year $1.2k-$4.8k) after unstaking is able ($60-$240) is the expectation
So it all started with me sharing a photo of the Bitcoin logo with a friend of mine.
The conversation went like this:
Him: Bitcoin is old stuff, try ETH
Me: Old but Gold, Eth is centralized shit.
Him: Ethereum is better now in terms of sustainability.
Me: (Sent him a voice mail that says): POS AKA proof of stake is centralized, so they know your information and your holdings. On the other hand, POW AKA proof of work is decentralized, as proven by Bitcoin. And it depends on people working on it to earn something. So no one will ever have control over it. But as for ETH, if the government or any developers choose to, they can control it at any time. Because the information about the developers are public information. But till to this day, no one knows who Satoshi Nakamoto is. That makes it safe from being getting centralized. So as long as you keep holding BTC you are safe, your privacy is safe and also your assets.
Him: Still in POW, you can't earn/mine more of it if you don't have enough horsepower, most Bitcoin is mined by big farms, and it is energy hungry.
Me: Mining is not the only way to acquire Bitcoin, you can buy it with fiat and trade to make profits. And one thing to keep in mind that 1 BTC = 1 BTC
Him: Yet you need energy to mine that in the first place. And proof of stake is much more energy efficient. Almost 98%. And when all the BTC is being mined, no one will have an incentive to use so much to run a mining farm to write the blockchain then, how would the transaction be recorded? Each transaction in ETH blockchain is less energy hungry.
Me: People are competing in order to mine BTC for themselves. But when the competition is over, it won't be that much complicated and energy hungry. And development of technology will come up with a solution to tackle that problem. Maybe one automated service powerful enough to write all the records on the blockchain.
So the arguments went on for a long time. I would like to summarize that in some short words.
After that, I told him that even it is very useful and could be use with less energy, you need to think about the centralized matter. No matter how good it is, if it's centralized, anything could happen to it at any time. So I gave him the scam regarding FTX exchange and how bad centralized could get. Also the involvement of governments and the probability of getting hacked.
We went back and forth about many things.
I guess I was able to give him enough information and was able to explain in a way so that he could understand. The fact about high energy consumption and how it will end someday. So in the end he told me that, the word side of crypto is that it's whole existence is fully based on human trust. So i told him that BTC is only pegged to USD in order to trade and make money. But the value will always be 1 BTC = 1 BTC. As long as you hold BTC, you owe that much BTC. So now he thinks that BTC is an asset like house/ land. So I told him that, yes, you can think it that way. As people always says BTC if for future investment. And people only hate BTC because they didn't have the chance to use it in order to know its importance. But at the end he said, "I am still not convinced BTC is perfect."
So I said nothing is perfect, but if you have to choose from one, you should go for BTC.
So that's the whole story. Please point out anything that maybe I am wrong about here, as I don't fully know about BTC myself. And yes, I asked him if I could share this personal conversation and he agreed. And one more thing, I would like to ask the seniors, what kind of examples or information I should provide him in order for him to fully understand it? Share your knowledge here so that I can show him.
The conversation went like this:
Him: Bitcoin is old stuff, try ETH
Me: Old but Gold, Eth is centralized shit.
Him: Ethereum is better now in terms of sustainability.
Me: (Sent him a voice mail that says): POS AKA proof of stake is centralized, so they know your information and your holdings. On the other hand, POW AKA proof of work is decentralized, as proven by Bitcoin. And it depends on people working on it to earn something. So no one will ever have control over it. But as for ETH, if the government or any developers choose to, they can control it at any time. Because the information about the developers are public information. But till to this day, no one knows who Satoshi Nakamoto is. That makes it safe from being getting centralized. So as long as you keep holding BTC you are safe, your privacy is safe and also your assets.
Him: Still in POW, you can't earn/mine more of it if you don't have enough horsepower, most Bitcoin is mined by big farms, and it is energy hungry.
Me: Mining is not the only way to acquire Bitcoin, you can buy it with fiat and trade to make profits. And one thing to keep in mind that 1 BTC = 1 BTC
Him: Yet you need energy to mine that in the first place. And proof of stake is much more energy efficient. Almost 98%. And when all the BTC is being mined, no one will have an incentive to use so much to run a mining farm to write the blockchain then, how would the transaction be recorded? Each transaction in ETH blockchain is less energy hungry.
Me: People are competing in order to mine BTC for themselves. But when the competition is over, it won't be that much complicated and energy hungry. And development of technology will come up with a solution to tackle that problem. Maybe one automated service powerful enough to write all the records on the blockchain.
So the arguments went on for a long time. I would like to summarize that in some short words.
After that, I told him that even it is very useful and could be use with less energy, you need to think about the centralized matter. No matter how good it is, if it's centralized, anything could happen to it at any time. So I gave him the scam regarding FTX exchange and how bad centralized could get. Also the involvement of governments and the probability of getting hacked.
We went back and forth about many things.
I guess I was able to give him enough information and was able to explain in a way so that he could understand. The fact about high energy consumption and how it will end someday. So in the end he told me that, the word side of crypto is that it's whole existence is fully based on human trust. So i told him that BTC is only pegged to USD in order to trade and make money. But the value will always be 1 BTC = 1 BTC. As long as you hold BTC, you owe that much BTC. So now he thinks that BTC is an asset like house/ land. So I told him that, yes, you can think it that way. As people always says BTC if for future investment. And people only hate BTC because they didn't have the chance to use it in order to know its importance. But at the end he said, "I am still not convinced BTC is perfect."
So I said nothing is perfect, but if you have to choose from one, you should go for BTC.
So that's the whole story. Please point out anything that maybe I am wrong about here, as I don't fully know about BTC myself. And yes, I asked him if I could share this personal conversation and he agreed. And one more thing, I would like to ask the seniors, what kind of examples or information I should provide him in order for him to fully understand it? Share your knowledge here so that I can show him.
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