Topic: PoW vs PoS - page 5. (Read 893 times)

Part of the problem here is the assumption that energy usage Is the problem.   That is the re framing the question by people who want to continue to control all money.  < Thats a complicated topic by itself.  Most people wont even see it due to the fact that they just repeat the question.  Once you are just repeating the question you've lost control of the topic. 

POS systems are inherently centralized systems.  Thus very few people are in control of the system.  The less people in control those systems means the human factor which is inherently flawed will at some point cause it to break or corrupt in some manner. 

POW systems tend to be A Lot less centralized and the human factor Tends to be less of a problem.  But its not a perfected system. Case in point would be Vitaliks reversal of a large transaction a few years ago. Despite ETH being POW Vitalik has centralized control. He doesn't exercise it but its there. The fact that its there proves that the human corruption faction is Very possible with ETH.  ETH moving to POS simply increases that problem.

Bitcoin Has No single person or small group able to do such a thing, thus its value.  At some point in the future due to Pareto distribution problems there will be in my opinion too few people in control of bitcoins processing power thus it might as well be centralized.  But that day hasn't arrived and cannot be worried about a problem that hasn't occurred yet.

I am very sure lots of people smarter then me are thinking about this problem.

actual relations with china are not bad at all. its the media perception thats bad.
did you know that while media news were screaming that china is an enemy. THOUSANDS of businesses were shaking hands with china.
yep right now this second there are mcdonalds, kfc, nike, and pepsi and thousands of brands happily working in china. the media perception does not like US business going to china, but they cant stop it. so instead media presents china as a bad place to go to. yet business sees a new customer base of 1.3 billion people and if they can just earn $10 per person they can earn $13billion from china.

US media has been screaming WW3 with china for longer then most of us have been alive. yet everyday we all trade and work with the chinese.


large asic farms can afford to move. its the residential hobby miners that are stuck. they are the ones told to just stay in place but shut down and stop working in mining coin

Good point! Still, it's important to always make a distinction between the people and the governments. The relationships between those in power are bad, but unfortunately, it's the little guy who suffers the consequences. Those appointed to make decisions impose sanctions that don't affect them that much.

The averagely intelligent and educated American don't see the Chinese people as their enemies, and vice versa. Negative thoughts are born when your existence and job security is threatened. Based on recent events, Chinese miners can't and shouldn't have positive things to say about the actions of their government.   

as for the shift in price.

imagine it this way

take it as a percentage
say 40% was in china at $0.04
say 10% was in khazahkstan at $0.05
say 20% was in america was at $0.12
say 30% was in europe was at $0.18

the average would be 9.9cents per %
now lets take out china

say 40% was in khazahkstan at $0.05
say 30% was in america was at $0.12
say 30% was in europe was at $0.18

the average would be 11cents per %
so although this is demo numbers and % per region is not accurate(random demo numbers). it just demonstrates the average is now 11cent

what you actually find out is this though
instead of 40% (chinese) willing to sell coin based on a low cost of $0.04% . meaning 40% would sell bitcoin real cheap if the price was to crash.
now its a situation of in this demo only 30% willing to sell at the next price point as the MINIMUM anyone willing to sell

so the situation is simple. if we imagine that the thousands of asics needed to mine in china led to say a combined cost of hardware, facility, labour of say $20k. ($4k being electric)

khazahkstan would become the next lowest cost. whereby facility, labour hardware is $22 and electric $5k makes the lowest cost mining now $27k instead of $24k

and as said instead of china 40% willing to at worse case sell down to $24k..
the newer situation in this demo. now has the lowest sentiment now being only 30% wanting to sell down to $27k worse case

Very good points indeed.
Another important factor that has been overlooked is that the US-China relations are terrible, they are even speaking of world war 3 these days! Why would Chinese miners migrate to US in this situation when there are closer countries some of which are China's allies.

You are forgetting countries such as Russia or Kazakhstan. Some miners surely migrated there as we can see from the increase in hashrate in those territories. It's closer to them than USA is and presents a decent alternative.

Packing up and leaving the country and the continent to go to the US to mine Bitcoin isn't as straightforward as many think. They are people with families and children who live and work in China. It's not that easy to leave all that behind. You need to purchase or rent a location from where you will mine in a brand-new country with unfamiliar laws and language (maybe). The equipment that consists of thousands of miners has to be packed up and shipped overseas. This is also expensive and requires additional paperwork and time.

The key difference between Proof of Work and Proof of Stake
Proof of Work = miners are like a notary witness a transaction and sign it
Proof of Stake = is like banks, money transmitters, receiving a payment and routing it to the receiver ('touch' it for a split second)

The key difference between Proof of Work and Proof of Stake consensus is that miners in PoW are to confirm transactions and add to blockchain this way they get rewards while validators in PoS are to lock up (stake) their coins and they get reward for this in coins that they stake. The more you stake, the more you earn. And in terms of PoW, who has solved the problem first gets rewards.

It is like saying "if enough consensus gathers we will censor bitcoin"!
There are certain principles in bitcoin that will never change, one of the most important ones is security which will be removed if PoS replaces PoW.
All you could say is that if PoW becomes problematic a new but better algorithm will replace it but it definitely won't be PoS.

I still haven't seen any proof of this apart from what the news sites said and a single study with unverifiable data. I'm not saying this is or isn't true, but we simply have no evidence.

US isn't so friendly to bitcoin either. I'm sure that if it continues to grow and specially start threatening US dollar they will start cracking down hard.

It wasn't since then though. US and Europe have been having some energy problems and with increasing gas prices the electricity cost has been rising for some time now.
In fact this is one of many reasons why I have trouble believing that Chinese miners moved from Asia (that has a lot of countries with super cheap electricity and friendly to bitcoin) to US (that has higher electricity price that is increasing and is not as positive towards bitcoin).

Nobody "had to" sell bitcoin, and it wasn't miners. It was traders and weak hands and they panic sold which is part of market manipulation that happens every now and then for different reasons!

Let bitcoin be used in a couple of big international trades replacing USD and the US miners will see what "legal insecurity" really means when they get raided in the name of "national security"

Blockchain has trilemma in terms of scalability, security and decentralisation. If we talk about PoW, then it has performed well under the umbrella of BTC. It has scalability issues but its secure and ensures decentralisation of btc. While we have yet to see PoS working under a decentralized coin like Ethereum.
After the last btc will be mined, there will be a fee that will be paid to miners as reward. Like I said PoW has scalability issues but still with this issue btc manage to grab over 1 trillion usd cap. I m very much sure PoW can manage the load after last btc is mined as its tested under extreme load.

Proof of Stake works in a different manner than Proof of Work. Yes it is a much efficient energy-wise and a much faster system for large-scale cryptocurrencies like bitcoin, but it would also require the consensus of multiple computation systems that will be unified under one single server. If everyone would be willing to chip in some of their computational power and unify it through the cloud, then proof of stake would work. Proof Of Work eliminates the middle man by allocating a dedicated computational system where transactions will be facilitated, this is of course only applicable for small forms of cryptocurrency with little potential for scalability.When the last bitcoin is mined/bought, it would be harder for everyone to facilitate transactions more so afford them because the system will be overloaded and as a countermeasure, will charge higher fees and would slow the process down for the rest in queue. The thing about POS is it ensures efficiency of service and the price of each transaction which in theory should work, especially for coins with high potentials for scalability like bitcoin and ethereum, with these two being the most common victims of the shortcomings POW has.

Its not like that PoS doesn't take any energy. So while it may not be a PMM, they surely are centralized when it comes to being crypto. All of this talk about "validators" happens because ultimately, you need computing power to bundle transactions into blocks and propagate them. That is why all the so-called "PoS nodes" have requirements like 64 GB RAM, Multi-core processors etc etc. A lot of them are even permissioned in the sense that you have to contact some central authority to run the nodes.

I see them not as cryptocurrencies but simple blockchain based databases that are run by certain corporations. Whenever transactions rise, the corporation simply buys up more cloud servers or just set up dedicated hardware of their own. Quite clearly, the people who want to use smart-contracts for lending and borrowing don't mind this as long as they get returns fuelled by speculation and Bitcoin's bullrun.

PoS has a market now and i think it'll have a purpose until regulation reins them in and only Banks can run these services. Bitcoin's PoW ensures that it just remains to be money and the only truly uncensorable exchange medium on the internet.

PoW vs PoS thread number 5234, same arguments
Peercoin the oldest PoS coin is a dead fish in the water
Blackcoin the oldest PoW->PoS is even worse currently trading at $0.06 with an all time high of over $1
If someone wants to prove his stake he was able to do so for the last few hundred years, just needs to buy some shares and he is proving his stake

Peercoin has been staking since 2012 at a 1% reward.
What does it mean in real life, well it inflated at over 3% (average 3.11% past 7 years, from 2014) that is even worse than fiat.

Year	Total Supply	New Coins	Inflation	new % per year
2012	15094912	15094912		100%
2013	20982872	5887960	22,77%	39,01%
2014	21971814	988942	3,82%	6,55%
2015	22867470	895656	3,46%	5,93%
2016	23738826	871356	3,37%	5,77%
2017	24544131	805305	3,11%	5,33%
2018	25116222	572091	2,21%	3,79%
2019	25854837	738615	2,86%	4,89%
2020	26634490	779653	2.93%	5,17%

Bitcoin halves supply every 4 years so energie consumption halves with it as unprofitable miners are forced to shut down.
Bitcoin now at about 1,6% coin emission rate, 0,8% next halving......

Research what a Perpetual Motion Machine is, that’s what Proof of Stake truly is. Plus the mere possibility of considering that Proof of Stake could replace Proof of Work, is someone who has not truly taken the time to understand how Bitcoin’s incentive structure works, and WHY it works.

That's also what I am starting to think lately. Why waste so much electricity when you can just have the same security with PoS? If the issue is centralization, there it is already here with the miners. One way or another there will always somebody/some entity will control the majority of the chain. You can't really prevent this.

Bitcoin too is doing fine with PoW, it ensures security and robustness of BTC blockchain. The issue of too much power consumption by bitcoin is as old as hills and IMO its just over hyped. Eth has not switched over to PoS yet as,
Altair, Ethereum 2.0’s first hard fork, is expected to come into effect by the end of the month —  the point where the original proof-of-work Ethereum blockchain will transition to Ethereum 2.0’s proof-of-stake consensus mechanism. Source

Whether its PoW or PoS, they both are same way of climbing the same mountain. As PoW is centralized along miners that can afford expensive mining equipment and electricity bills, in PoS those who can stake huge amount of coins will grab the major share of mining.

The thing with PoS is, it promotes hoarding and lets the few people with huge number of coins control the blockchain. It requires little to no electricity in generating a block, yes, but the security of the network lies on the hands of the few people having tons of coins on their disposal. For PoW, complicated mathematical algorithms ensure that the network's security is always at its prime, and in order to beat the algorithms in place and rewrite even a small portion of the blockchain, one must have spent an immense amount of resources (electricity, time, and money) before they can achieve it.

Bitcoin IMO will not switch to such an algorithm any time soon. It will still keep PoW as it remains to be the most ideal algorithm in terms of security for bitcoin.

Proof of Work                                        Proof of Stake

Proof of Work secures the                Proof of Stake is a
network and generates new             consensus mechanism
coins as rewards.                               that locks up crypto to
                                                              secure the network. It
                                                              ensure only legitimate
                                                              transactions are added
                                                              the block.

It is powered by peer operated        Validators lockup the
nodes around the world with no     crypto. They're then
central authority.                                chosen at random to
                                                              verify transactions and
                                                              receive associated fees

POW requires miners to use            In POS miners dedicate
hardware resources to secure        their crypto to secure
the network.                                       the network.

POW is high energy consuming.     More projects are now
Bitcoin blockchain is upon POW.    following POS.


Source : Google Search

It's not just some countries, there are miners spread practically all over the world, if you mean that only in some countries there is a significant percentage of miners, I would agree.

And I would qualify the second part of what you say as well. The migration of miners from China mainly to the US was not because in the US electricity was cheaper than in China, it was because of a political issue. Since then, the price of energy there has been rising in the US. I suppose some will be considering going elsewhere if it continues to rise, but there are many factors to take into account:

1) Moving mining has a monetary and time cost, as well as an effect on the market. When the miners left China many had to sell Bitcoins they had been holding and there was a downturn in the market.
2) They cannot move to a place where the energy is cheaper but there is legal insecurity that makes it possible for the government of the day to prohibit mining in a few months, in addition to confiscating equipment and other measures.
3) The remaining countries with relatively cheap energy are either because they have a lot of nuclear power plants or because they do not comply with the CO2 emission agreements, and there are fewer and fewer of these available, especially if we take into account that they have to meet other requirements, such as legal certainty, etc.

I say this because with your sentence it seems that it is an easy thing, that if energy becomes expensive they leave and that's it, and first it is not so easy, and second it also has a cost, for themselves and for the market.

Why wouldn't it happen? If enough consensus raises, anything can happen.

Most of the major updates weren't in the whitepaper and they happened anyway.

You know what they say, never say never.

If PoW becomes unsustainable, I am pretty sure PoS will be the next step but that's one big if.