You are missing the point of PoS. The point of PoS is not to be better at achieving decentralized consensus than Proof Of Waste. The point of PoS is to achieve sufficiently decentralized consensus without wasting a ton of electricity, therefore harming the environment, and/or wasting a ton of processing power that could be used to benefit society in one way or another. If you insist on PoW, then make the PoW beneficial to society like Primecoin or curing cancer... otherwise it is a waste of energy and processing power.
PoW coins can not use computations that are otherwise useful. If the computation is otherwise usedful, it can be pre-computed: weakening the security PoW is supposed to provide.
1. The creation of money. Anyone can create money by broadcasting the
solution to a previously unsolved computational problem. The only
conditions are that it must be easy to determine how much computing effort
it took to solve the problem and the solution must otherwise have no
value, either practical or intellectual. The number of monetary units
created is equal to the cost of the computing effort in terms of a
standard basket of commodities. ...
Edit: Interesting to note that Bitcoin does not follow this algorithm long-term because, as
CoinHoarder points out, money creation eventually ceases.
I understand it is not an easy thing to do as it must be hard to figure out but easy to verify. However, I think Primecoin has proven that PoW processing can benefit society in some way by advancing mathematical research by finding long chains of prime numbers. I have faith that a "better" use case will pop up sooner or later.. surely finding chains of prime numbers is not the only use case of useful PoW.
Furthermore, it is unclear whether Proof Of Waste will work once the block reward halvings stop and no more currency will be printed. Currently PoW coins are diluting their shareholders to pay for miners to secure their block chains.
This dilution helps spread coins around to new users.
I agree, however PoS coins can be diluted as well via interest with serves a similar purpose. The only truly deflationary coins I have seen are PoS, as with PoW the miners need to be paid. Personally for a store of value, I would prefer a truly deflationary coin.
It lowers the barriers to entry if some organization manages to take control of the majority of the coins/hash-power for some reason.
I'm not sure I agree with this. It is possibly a deterrent from those thing happening, but it would not affect someone that was determined enough to do so and had deep pockets.
Put another way, scarcity will make the price rise, which will encourage somebody, somewhere to plug in a miner.
Not necessarily. That's why it's called supply and demand, and not simply supply.
In a PoS coin, I am not sure why anyone would sell enough stake to lose control over the "forging". The whole point is that stake costs almost nothing to maintain.
In some versions of PoS I agree with this point.. when stake is generated proportional to the amount of coins you own. However, in DPoS (and possibly others) this is a non issue. All stakeholders benefit equally from securing the block chain as no interest is paid. Fees are destroyed in the PoS process, thus increasing everyone's buying power equally. It is one of the few truly deflationary coins I have seen. Bitshares just implemented dilution.. but it is so the block chain can hire employees and improve upon itself through funding development, marketing, etc.. otherwise DPoS has the potential to be truly deflationary as it has been since its launch.
I agree the question of miner fees for securing the network is an open one. As somebody in another thread pointed out: we can switch to PoS if it becomes clear that fees are not sufficient to secure the network. That won't happen for decades.
Yes, it may not even happen in our lifetimes if at all, but I see it as being a possibiliy. There are some ALT coins that have quicker emission curves, so we will see how they are able to deal with it. We all know how Dogecoin went.. Monero is another one with a fast emission curve. If the crypto markets crashed really hard it could happen sooner than you'd think. I realize a PoW coin can switch later, but I think it is important that PoS be tweaked and improved upon now rather than later. That way if Bitcoin does have to switch it can switch to the best possible solution that has been "battle tested".
Edit: Ideally, once coin creation ceases, mining fees will settle on an amount sufficient to secure the network. It is not clear that there is any stable feed-back mechanism to ensure this. Limited block-size may have to act as an approximation.
I'm not sure what you're getting at here. I think it depends on the value of the PoW coin on the free market and the amount of transactions that are occurring on its block chain. If the value isn't high enough and there aren't enough transactions then the network will possibly not be very secure as people will shut down their equipment. Someone could probably buy up that equipment for pennies on the dollar and mount a 51% attack on the less secure network. There are a lot of entities that would have incentive to do this.. banks, central banks, competing cryptocoins, governments pissed at dark markets and tax evaders, etc..