Topic: Proof of Stake - page 6. (Read 16423 times)

In theory this sounds intriguing, but to me the "Proof of Stake" concept is just another way to introduce the ShitCoin (aka SolidCoin) concept into Bitcoin and attempt to establish a BTC version of the Money Power (like a BTC Rothschild or so). It seems one only has to find the right dialectic to talk people into something that doesn't fully agree with the original mission. Even if you don't immediately go as far as SC and trust the nodes with more coins more than anyone else, that is another logical consequence of the concept, and in the end: Hurray, we took monetary control away from feds and establishment and give it to someone we can trust.

People who own a large amount of BTC will most likely agree with the concept, others that like the dialectic will be sold into it without owning a large stake, and we are back to yet another Money Power controlled currency.

That's like the end of the "Animal Farm" by George Orwell.

Excellent, I put it in the wiki.
I remembered reading earlier about your suggestion, and it makes perfect sense.

Cunicula - any definitive argument why your proposal is better than Meni's?

In Cunicula's system, voting power is determined by combining (multiplicatively) your hashrate and stake. To be effective you need both to be high (which IMO is very problematic because small players cannot contribute effectively. It's not linear.)

In my system, there's a skeleton based purely on hashrate, and superposed on it are occasional checkpoints set by stakeholders. You can contribute PoW without having stake, and you can contribute PoS without having work, and in both cases your voting power and reward is linearly proportional to the resources you have.

P.S.

I did another minor cleanup.
Cunicula, please try not to paste your name that much in the article ... three times within 2 paragraphs is a bit too much IMO, can be interpreted as vanity by some (not saying it is, but the style is not so great IMO). Also, no need to reserve space for questions / critisicim, it's a wiki, let it evolve naturally. Questions are not appropriate within the article itself, they can be asked in the discussion.

Also, can someone please add a tl;dr on what are the key differences between the PoS systems proposed by Meni & Cunicula? I haven't followed this entire discussion. I did place a small placeholder in the wiki for this.

Sure, as soon as I have the time.

Thanks for the cogent argument, d&t. You explained things quite well. I agree with you, though I am somewhat more optimistic about the possibility for change within bitcoin. The first step is a proof of concept alt chain. I am hoping to attract coder interest in this.

With Bitcoin's Pow, at any given time a new enterprise can come online and threaten the integrity of the network. This is a good thing. This will require dillegence to maintain a "balance of power." Collectivist institutions like democracies can choose to forge a coalition to counter-attack anyone that monopolizes the network. If that coalition itself manages to take 51% as well, then political seperation of powers can be installed to mitigate this threat through bicameral legislation. Whenever a dictator or oligarchy upsets the balance, things tend to get noisy.

There is nothing "democratic" about proof of work.  If i am rich enough to buy 10% of the hardware I get 10% of the "vote".  If you are so poor you can't buy 0.1% of the hardware you don't even get 0.1% of the vote.  I doubt proof of stake enhancement is possible in Bitcoin (difficult to make even modest changes) but they both use invested wealth to ensure the dominant chain is supported by the majority of the invested wealth (wealth with conviction).

Not much difference between:
a) I take $100K and buy 1% of the network hashing power
b) I take $100K and buy a combination of (less) hashing power and large enough stake to have 1% of the effective (stake weighted) hashing power

In both cases I am putting $100K at risk and gaining 1% of the network revenue and having 1% of the "vote".  To think one is the Roman Republic and the other is serfdom is naive.


Proof of stake doesn't necessarily mean monopoly or cartel.  Proof of work is no guarantee that there won't be a monopoly or cartel.

If tomorrow Deepbit, Slush, and BTC Guild decided they would only build on their own blocks they would have 100% of the network doubling their revenue overnight.  Since they no longer need any more hashing power they could close the doors to new hashing power and new miners.  If the merged they could gain higher profits by having members turn off hashing power (but having it be hot idle under control of the cartel).  They could operate a modest 1TH/s or so with the ability to engage up to 5TH/s+ if someone tried to break the cartel.  Members could be issued shares and paid dividends from this entity.  In time hardware could be moved to warehouses controlled by the cartel and replaced with more efficient equipment.  As long as they have the ability to deploy more hashing power than any "upstart" they could leave most of it idle further boosting profits.  Their idle hashing power is in effect an indirect form of proof of stake.   On a long enough timeline they would form the basis for the "Bitcoin Regulatory Commission" you fear.   Eventually datacenters full of ASIC processors providing tens of TH/s of on demand hashing power would be the method of control.  As long as their potential hashing power is large enough there is no need to keep it online.   Far more efficient to have it in "reserve" (thus producing no cost) and monitor the network.  Members would simply be shareholders (with shares openly traded anyone could buy a stake) and Bitcoin would be a controlled centralized network.

I am not saying the top 3 WILL do that but the belief that somehow PoW is democratic, free, and open and PoS is closed, centralized, and monopolistic is just naive.  

Naw, this would be more likely nicknamed Serfcoin.

Thanks for checking the formula. I cleared up the hanging parentheses. If you see any additional errors let me know.

Remember that difficulty is just an arbitrary constant that controls the block generation rate. There is no reason to expect a difficulty number that generates 6 blocks per hour in my system to look similar in magnitude to a difficulty number that generates 6 blocks per hour under the current proof-of-work arrangement.


Meni, you might want to consider describing your own system in this wiki as well.

No, the ideas under discussion here have nothing to do with stupid nonsense done by SolidCoin.

Proof of Stake?

Is this SolidCoin ?

Can you clear up your formula bro?

(Aggregate difficulty)^{1/((1-p)}

an error right off the bat, and it is unclear if the rest of the formula is all in the power or if there are two halves that are divided, although on running 1,000 coins*100 confirms both come up with asinine difficulties

I have updated the wiki with a very brief discussion of my proposal. You will see that it is very simple and basically amounts to changing the difficulty criterion for block validity.

https://en.bitcoin.it/wiki/Proof_of_Stake

If you have comments or questions, I will try to answer them in this thread (and also update the proposal regarding if big issues come up).

for once we can agree.

I also agree with the above. However, I do not think your solutions have much relevance to Bitcoin. I like the idea of energy based currency and have written extensively about it in other forums over the years. I do think that Bitcoin will evolve into something like that eventually when energy is no longer a scarcity based commodity.

I agree with the above statement completely.

Huh? I am proposing an alternative to both PoW and PoS. I believe I gave what is probably the best solution possible to the 51% attack. I almost held back from even mentioning it in one of these threads because frankly I don't like bitcoin very much. But to have so much effort wasted on designing PoS when I think there is a much better, much simpler way, the altruistic part of me couldn't remain silent.


This is tangential to the discussion. Increasing fees or making it harder to get your transactions into blocks isn't the answer. Encouraging more and more electricity and hardware resources devoted to securing the network isn't a very good answer either. Why should value be wasted on electric companies when it isn't necessary? Why should the possibility of a sustained 51% attack be left open?

Why must we compromise the democratic liberties of PoW for the security of PoS? Don't close your mind to the possibility that you may have overlooked better solutions to the 51% attack. To dismiss PoW out of fear of a 51% attack is to end the experiment of Bitcoin.

I'm sure there are things that can be done with transaction fees that we have overlooked that will not compromise PoW entirely. Fee demurrage, processing auctions, tax supported miners, agents, etc. There are many, many other ways to look at future money issues. I will stop before I go into a rant about the long history of monopolies holding power through violence.

Etlase2's idea seems to me to be basically an improvement on Cunicula's forumla, where instead of the "days destroyed" (coins*age) in a single transaction included by the miner contributing to the "work", Etlase2 suggests that the "days destroyed" in all transactions included in the block should be.  Seems like a good idea to me, as it incentivises the inclusion of transactions (there is no such incentive at all in the current proof of work system), while disadvantaging DoS attackers.