Topic: POW vs. POS - page 2. (Read 3657 times)

I cannot believe you really believe that. Hahaha.

The worst is you believe that POS will replace POW. Staking is costless, and whoever "maintains" the network can retain that power forever. Why should we give them that right?

In POW, miners' ASICs depreciate, mining have costs, and this gives opportunities to new miners to enter, process, and validate blocks.

All of us are waiting for the SEC to allow ETF. If this happens, bitcoin will become the most liquid crypto currency in the world.
Most of the asics continue to be produced for the bitcoin algorithm.
Competitors:
The ethereum has a lot of problems because of the huge number of tokens, and the process of releasing new updates is constantly postponed.
Ripple was recognized by SEC as securities. Against Ripple filed a class action.
About the TON of little news lately.
I do not understand what crypto currency will be able to take 1 place

It's a bit similar to USD: everyone knows that USD is doomed, but other fiats are depreciating towards it, so you have to use USD if you want to be in fiat.
My feeling is that alts will further depreciate towards BTC as a whole, since there are so many of them, new arrive every day and you cannot predict the winner.
And even though in the end BTC is doomed, there's no safer option than to be in BTC if you are in crypto.

You are completely right. I was having a same discussion with a colleague of mine about this the other day. The thing I see happening is that because bitcoin was the first ever implementation of blockchain technology, it is has gained a lot of fame and money. The fact that there are several coins/tokens out there, far better than bitcoin, people won’t actually want to convert to bitcoin as they have created their own cryptos.

I strongly believe that some other coin will dethrone bitcoin sooner or later. It might not actually dethrone it but it’s impact night greatly impact the value of bitcoin negatively.

I was listening the Epicenter podcast (which I suggest to listen to), Anthony Lusardi of the ETC foundation was talking about this.

Essentially, PoW is a tried and tested concensus mechanism. You just have to look at the security of Bitcoin to know whether it works or not. Are there problems in PoW? Yes. It's inefficient and wasteful in terms of energy consumption and does not align itself with greener and more environmentally friendly drives (this is actually important and for some, crypto in general is just a no-go area simply because of the mining farms). It is however the longest running consensus mechanism and it is supposed to allow natural competition - you can join the network and get mining rewards. Obviously, it comes with its own problems of centralization, mining mostly occurs in China. Why? Because electricity is cheap and they make the miners.

To go back to PoS and to the point made in the podcast (i'm pretty sure it was in the one about ETC). Imagine a scenario where you had a majority stake in the network. Obviously that would also lead to proplems of centralization because of the higher proportion of coins you actually own for a given network. They will be worth a certain amount to the staker so they wouldn't want to give them up. The problem is, they might be worth even more to a potential buyer who wishes to "purchase" the network by purchasing those coins from highest holding staker. It might be less wasteful that PoW but it doesn't solve any problems of potential corruption.

Well, not exactly. Ethereum and many alts are still mined using normal GPUs, also suitable for gamers or genome microbiologists.
I view them as spare liquidity reservoir for Bitcoin.

On PoW/PoS hybrids.
I don't know about Decred (their "foundation tax" from mined coins taken forever seems fishy to me) but in Metro based on NXT plus BitcoinJ-like PoW they seem to have an interesting proposition. NXT is example of PoS system without issuance, but with bad initial distribution since they never had mining, or even an ICO.

PoS-produced blocks of Metro are very frequent, like dozen per minute, so it enables LN-like applications and decentralized on-chain exchange working faster/cheaper than Etherdelta. Whereas PoW blocks are once per 10 minutes like in Bitcoin.
Both Bitcoin (via RootStock, MainNet since Jan 2018) and BitcoinCash (in Jul) already enabled smart contracts on their pegged tokens, thus Metro is able to become a sidechain to them.

Too bad Metro took as their codebase NXT (former BitcoinNext, BCNext) with accounts system like in Ethereum, I guess they would be better off taking BitcoinJ or similar Java implementation of Bitcoin as codebase adding blind shooter PoS algo.
Obviously, Java gives advantage over C++ that programmers are plenty, and NXT has plugins architecture which enables to implement sophisticated additional features, whether in NXT or in it's "clones".

Whether all this will be better, worse or complementing LN, it's hard to say right now.

Bitcoin doesn't eliminate banks. Banks are the ultimate liquidity providers to enable capitalism. FRB evolved because the demand for money exceeded the supply of gold. Should Bitcoin become the dominant currency of the world, banks would need to apply FRB to it as well to help control the price or risk massive waves of bankruptcy in a deflationary event. The alternative is banks won't touch bitcoin. Without demand for bitcoin investment capital, it will likely always remain niche.


While true, there is nothing special about PoW in this regard. Any decentralized currency combats these problems.


Historical savings interest beats inflation. It is only in the last decade or two that basic savings interest has not kept up with or exceeded inflation. The stock market will generally always meet or beat inflation as long as an economy grows as it is automatically indexed to inflation by the investment of inflated currency thereof. The "theft" via inflation is highly dramatized. It is government spending (and other interference) that causes a misallocation of resources, not inflation. In the case of the 2008 crisis, it started as pressure from the US government to the banks to issue more mortgages to less qualified people, distorting the checks and balances of the system.


You mean anyone with custom, production monopoly-prone specialized hardware.

"The future"? Both variants are pretty much standard since 2013 or so

Well, you're of course right, but there are also other examples:

- Google - dominant in its category since the early 2000s (~15-20 years)
- Microsoft/Windows - dominant since the early 1990s at least (~30 years)
- Coca-Cola - dominant since the 1950s ? (~70 years)

Bitcoin is dominant, basically, since 2009. Almost 10 years.  Myspace was dominant only for 5 years, so Bitcoin is already doing better.

The reason why I don't see much competition for BTC, in the short term, is however that almost all other coins are following a centralized or semi-centralized paradigm which won't attract most people attracted genuinely by Bitcoin. (I heard that Dash is about to declare insolvency, for example. That won't happen to Bitcoin )

(And since I heard about the 0,02 USD/kWh solar plants in Mexico I suspect that PoW can be sustainable. It may be not ideal, though.)

Lets not get too complacent.  I remember a time when myspace was the dominant social platform, I remember a time when VHS was the preferred media format, I remember a time when the simpsons was still a good show.

The point is lets not pretend that a new coin won't come along in the future and dethrone bitcoin.

No way. There are exactly 0, zero other coins out there that can outperform Bitcoin's pure PoW approach specially as a store of value, and probably not any of these other projects, be it PoS, or any of the more exotic variations, may not deliver a better solution than a second layer solution on top of Bitcoin's POW blockchain when it comes to day to day payments.

Some are trying hard and they will basically be competing against Bitcoin's LN. Will you trust their project above LN to pay for a coffee? will you even bother going into another token at all? that we'll have to see.

@byteball

Right to the point. kudos  

I have said it more than once:

from http://adamierymenko.com/decentralization.html

I think this reasoning (that is, doubting PoW value like that) is wrong. The problem of "conventional banking" is not in said overhead.
It's wrong to compare an average bank electricity consumption, plus it's workers salary with Bitcoin/PoW alts consumption.
Fractional reserve banking is setting the rules for economy and politics that benefit bankers, and damages everyone in the course of that.
Fiat money exist as debt, so whoever has better "credit rating" can go deeper into debt and benefit from inflation, or from devaluation of his currency towards the reserve currency, currently USD.
So called credit rating is under gross manipulation by powerful interests. This leads to the clusterfucks like in 2008.

Also, debt pays interest, and here we have more manipulation:
https://en.wikipedia.org/wiki/Financial_repression
This siphons money from workers who hold deposits or bonds (e.g. indirectly in pension funds) to the shareholders, who are already rich.

Conventional banking costs humanity much more than meets the eye.

So no, we are not "paying" for PoW factual electricity/equipment amortization more than Bitcoin deserves (that is, spending electricity that could be used to make fresh water out of oceans and for other worthy purposes). We pay exactly as much, taking into account both the real promise and all the hype, which might turn out to be true in the end. PoW draws as much electricity as free market allows, with admittedly some regulation in some places getting in the way.

To illustrate my point, let's go to Western Hemisphere before Columbus.
There were tribes who used cocoa seeds as money, those who used shells of a certain river mollusc as money, and tribes who used a novel form of money, woven baskets.
A physicalist would argue that only cocoa can be money, as you can consume it also as non-money.
When a tribe wants to switch from shells (the phrase to "shell out" is from exactly this history) to woven baskets, some people may argue:
But shells require so much less labour! You just go to specific river and harvest them.

The problem is, the specific specie of shells that is deemed "money" grows on specific river, controlled by specific tribe, in full analogy with banksters.
Whereas PoW baskets can be woven by anyone with free time and necessary skills.

You just cannot argue with this kind of users, they have an agenda, which is to shill whatever coin they bring to the discussion.

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Let me introduce my newest consensus mechanism:
Proof of BullShit (PoBS).
PoBS VALUE is in the amount of BS spread across the bitcointalk forum.

PS: To determine something is secure, it needs to be attacked, or worth to be attacked.

IMO, Bitcoin (POW) "IS" secure because government hasn't really try to take down the network yet. Any hardware related consensus mechanism will be overtaken by government in the future, just because they have the most resources.



What about Proof of Transaction? I am in this new project that created a new consensus mechanism, it seems to be an alternative from POW and POS. For anyone who is interested, there is a Proof-of-Transaction debate bounty, debating to be the best consensus mechanism.

Pos is fundamentally the same as buying a cd from a bank..

And no protections that a bank offers.

So interest is higher for the pos coin then the cd.

Pos = crash and burn

You argue that bitcoin energy waste enhances its security, which we disagree , but not the point I was making in this context.

The Actual Costs required to maintain a Proof of Stake is only the energy cost of its nodes.
Which is less than $1000 per month.

The Actual Costs required to maintain the Bitcoin PoW network , require warehouse rentals or purchase, costs of new asics every 1 - 2 years, and a monthly electricity bill that is in the millions of Dollars range every month.

Proof of Stake costs maintenance is fairly constant where as Proof of Work continues to cost more to maintain.  

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Actually in this , we have an agreement.  
(I would include high inflation PoW coins in the morally unacceptable and economically void statement.)
High inflation or Interest in Proof of Stake coins is a problem, and printing of free money to the few is always a recipe for trouble.
Which is why ZEIT moved to an Ultra Low Inflation rate of only .0005% per year.

Bitcoin makes 1800 new coins per day
ZEIT makes less than 500 new coins per day after the ULI was activated.  
And currently burns the transactions fees.

We made Proof of Stake what it should be, a consensus method only for securing the network, not a free money press like high inflation coins.


FYI:
Inflation rate is determined by design specs and not consensus method, as many PoW coins grow in the millions per day.
IE:  
NewYorkCoin is one example of a PoW coin that inflation rate is destructive.
While PoS coins like Nxt, have zero inflation rates, relying on transaction fees only.

I have refuted this claim more than once. Bitcoin energy consumption is determined by both network hash rate and efficiency of the miners. The latter improves through time because of Moore's law and the first won't grow exponentially because of negative impacts of halving and price corrections that de-incentivize mining.

I could say, in mid-term we would be experiencing a significant drop in electricity usage of bitcoin network and in long term this figure will be many times lower than what it is today because there wouldn't be  enough issuance of new bitcoins.

In the current state of its development, bitcoin network is producing a commodity and like any other production process it consumes resources. In the future when this issuance/production is significantly dropped the energy consumption will drop comparatively.

PoW doesn't require energy explicitly for transaction processing. In my design of PoCW I have inserted a hashcash like feature to the system that allows wallets to take part in the security, such that in each halving this role becomes more important and eventually would be the dominant factor for securing the network. It is just one example of many possible improvements in bitcoin for confronting zero-issuance situation.

PoS alternatives are focused on transaction processing and remain silent about the issuance problem. Inflation in PoS is morally unacceptable and economically void. It resembles fiat money inflation. Even hybrid PoS coins are the same as long as they have issuance of new coins based on stakes.  

A PoS system without issuance is nothing more than a second layer protocol for bitcoin (one may suggest to understand LN as a PoS network on top of bitcoin) and with issuance, it is just a scam no matter how big and popular it is, it is a scam just like USD.

Ethereum community is a good example of how a decent ecosystem could be corrupted by PoS ideas:
Right now their big stake holders (Buterin and his Foundation on top) are imposing their short term interests regularly by adopting frequent hard forks to intervent issuance of ETH.

A coin, more than 75% pre-mined, now is actively politicized by the big shots to bump its price by any means and in the best interests of coin/stake owners.

Now, before PoS, they have trouble with miners because they need security which is still provided by miners. Once this coin is PoSed you will have a mafia on top of the system who is in charge of any critical decision including inflation rate without any objective factor to keep them on the track.

Any honest observer understands what I'm saying about the situation with Ethereum and the misery PoS infection has brought to its community and the inevitable failure of it in the near future. The failure that has been signaled already and is based on the subjective understanding of cryptocurrency that PoS enthusiasts are infected with.

According to this subjectivism, crypto is about solving a problem, monetary system, by means of computer and communication.
A reputation based system is what a junior programmer re-discovers every single day he feels confident enough to tackle this problem. Before bitcoin they were mainstream and now they are back in the name of PoS.

No matter what is the label, they have failed and will fail not because of this or that design flaw but because "monetary system" is not a problem to be solved, it is a socio-economic phenomenon that should be re-built. It is what PoW and bitcoin have managed to do, they have built a new monetary system by consuming energy and resources.

ZEITCOIN , and almost all Proof of Stake coins in 2014 and earlier all started with a month or so of PoW only.
Those coins either dropped PoW completely or stay a hybrid of both.
ZEIT was going to stay a hybrid, however a flaw was discovered running PoW with PoS,
so they just dropped the PoW as it served no real function anymore after the initial birth.  

When the ICO craze started in 2015 , is when new PoS coins fazed out all PoW mining even from coin creation.

The input costs to maintain a PoW network continue to grow at an exponential rate.
Bitcoin requires millions of dollars of electricity to feed it's wasteful energy appetite.

Proof of Stake networks can run on an input cost of less than a few $1000 every month, and our input costs are constant verses PoW wanting more every month.
PoS can match PoW performance without requiring millions of money wasted on energy every month.

Which is why Eth is moving toward PoS and dropping PoW,  
Bitcoin PoW will just continue to centralizes control until it is no different than Government controlled fiat.

Proof of Stake will outlive Proof of Work.
Because it is sustainable and millions of times more cost efficient.  


FYI:
@hv_  you are a bitcoin cash bagholder, so you pointing fingers is silly.

Peercoin started very much like the original Bitcoin.
It is hybrid PoW+PoS. At the start it was even PoW only for a moment, until PoS kicked in (until enough coindays were gathered to start minting)

If you see behind the curtain you d notice that only big bag holders are proposing (their) PoS.

I know not a single (reasonable) PoS that started like the original Bitcoin with PoW.

This is also exactly the thing when you try to get SEC compliant. PoS will stay nichy and go away.

DLTs are the best vector to make any pos redundant.