Topic: Proof of Stake from an austrian school perspective (Read 2843 times)
I like how you link the technological value of bitcoin to the financial incentive to alter it, this is a generic way to evaluate the technological value of a blockchain. And it takes into account other usage than purely monetary. Your explanation stays relevant whatever we consider PoS or PoW or monetary usage versus technological usage (colored coins or proof of publication)
So your say the use value of bitcoin is driven by its monetary use...
Indeed, interesting point of view, again one more thing that never happened for any money in history. Does a PoS have the same problem ?
Indeed, interesting point of view, again one more thing that never happened for any money in history. Does a PoS have the same problem ?
In a way, yes. This is the funny thing with the block chain: it needs something monetary to be technologically valuable. The blockchain without a monetary incentive to have high (and distributed) difficulty has not much technological sense, because who would have a stake at securing the block chain with high difficulty, if it is not exactly the kind of person or organisation that has also a stake in compromising it ?
Block chain technology without monetary incentive is in-existant. This is why I don't understand people who say that bitcoin as a currency is shit, but the block chain is valuable. No, the block chain gets its technological value (that is, the "graving in stone") from the fact that there is a monetary and distributed incentive to secure it, larger than any other stake to modify it.
If you would like to use the block chain to "grave in stone" things of which there would be a financial incentive to alter that, which is larger than the (cumulated) financial incentive to do the PoW to secure the chain, then obviously it would be financially interesting for the party who has a stake in it, to deliver the larger PoW to alter the chain.
So or you use the block chain simply as the ledger for bitcoin itself, and then its technological value is of course limited to the financial value of bitcoin itself. Or you use the block chain for other applications (such as registering your will, or historical events or whatever) which has itself (financial) value, but then the block chain becomes insecure from the moment there are higher financial stakes to alter this, than the price of the PoW (which is derived from the bitcoin price) to mine the coins....
Example: suppose that Bill Gates has engraved his will in the block chain at date X, and Joe will inherit all his fortune. Now, imagine that Jack could also have been the beneficiary of the will. So Jack has a financial stake in altering the chain from moment X onward, with a new (fake) will of Bill Gates, which is essentially worth Gates' fortune. He's willing to spend half of that on altering the chain to modify Bill Gates's will. If bitcoin is worth only $0.01 then it will not be difficult to pay for sufficient hashing power with half of Gates' fortune to redo the chain from moment X onward, right ? It may take a year or so. It doesn't matter. Jack will buy up enough hashing asics and will be willing to use sufficient power to redo the chain. He will not make public that fork until when he has almost catched up, so the financial mining incentive of the bitcoin miners who only do it for about $0.01 a coin, is no game for the financial muscle of Jack. If Jack's a nice guy, he includes most of the transactions that people had already placed on the block chain in order not to crash the trust in bitcoin entirely (otherwise his engraved modified will will also be worthless if the block chain is given up as a whole).
People will see of course that the block chain is altered in some way for about a year. But if the protocol is to take the longest chain, no matter what, the new chain will have the go of the miners.
So the technological value of the block chain is linked to the price of the coin it handles, because that determines the financial cost of the PoW that is put into maintaining the integrity of the block chain.
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With paper fiat bank notes, it has about the usage value of toilet paper, which is also not strictly zero
Well, it makes good combustion also ! very useful for surviving zombie apocalypse ! 
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Proof: look at the "value" of the blockchain of any shitty altcoin with no value. That chain is just as valueless as its coin. You cannot trust the irreversibility of that chain. Nevertheless, technologically, it is the same !
So your say the use value of bitcoin is driven by its monetary use...Indeed, interesting point of view, again one more thing that never happened for any money in history. Does a PoS have the same problem ?
USA (and other countries) have a powerful army they use to back fiat.
I never understand what people mean by that. Can I bring my note to the bank and they will give me a soldier?
The army is a huge cost to an average fiat holder/user, not a benefit.
Well the military of Germany, which was maybe the best between the wars, did not help the value of their money. One example is enough to defeat that argument.
General trust in the power of the managers of some fiat is of course important for the speculators (which basically are everybody), but oversupply of money can take any currency down.
To wage a war, which is extremely costly, a government has to confiscate a large portion of the productive workers for soldiers, turn much of the rest of the economy towards war production, confiscate private assets that can be used in the war, loan the financial wealth of the citizens in the land through war bonds, confiscate the value in the cash holdings of the citizens through money printing. Basically, they take everything. No wealth, no investments, bad productivity, poverty. Running a big war machine will make people poor and in the end crush the money system. So I would not bet on the military to keep the money afloat.
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The opposite transition is also possible: usually this is called hyperinflation, after which the former monetary item is reduced to something like toilet paper (that is, takes on its former simple usage price).
Which I think why Austrians argues that having a use value is important. If you have a use value, then it can't disappear like toilet paper, despite market manipulation/volatility, which is very important to establish durable trust in the asset.Well, if the monetary value is what comes on top of the usage value, and is large compared to the usage value when the asset becomes money, then hyperinflation just brings the monetary part down to 0, and what remains is the usage value. But the monetary part of the asset value is still 0. Of course, it kind of "limits the damage".
Let us look at gold. Let us say that the monetary value of gold is $1200.- and the usage value is $10.-.
If ever there were a hyperinflation of gold, so that nobody kept gold as a speculative (monetary) asset to "hold value" but only to USE it, then gold would go down from $1200.- to $10.-
People using gold would still buy it at $10.- to make some jewellery and to make certain electronic components. Nobody would buy gold to hold it to re-sell it for value (which was the demand that made the price go up to $1200.-).
So the "worst case" devaluation of gold would be something like a factor 120 then, while with pure money, it is infinite.
With paper fiat bank notes, it has about the usage value of toilet paper, which is also not strictly zero :-)
But the monetary part is just as well gone, whether it was in addition to some usage value or not.
Concerning bitcoin, I don't understand the argument, because I think it is backward. Of course, the blockchain is a valuable "store of irreversibly registered data" ... on the condition that bitcoin is expensive !
Because if bitcoin is not expensive, then the difficulty will be very low, and the security of the blockchain will be very low too. So the value of the blockchain is derived from the price of bitcoin, and not the other way around !
If, for one or other reason, tomorrow, a coin is traded $0.000001 and remains there for a few years, then with all the hashing machinery that is lying around, I can, at a certain cost, corrupt the blockchain, because difficulty will have gone down with a factor a billion or so.
With all that hashing machinery I would be able to redo the blockchain from a certain point onward, and the "value" of the graving in stone of the blockchain would totally evaporate.
So it is the price of bitcoin that keeps the value of the blockchain causally, and not the other way around.
Proof: look at the "value" of the blockchain of any shitty altcoin with no value. That chain is just as valueless as its coin. You cannot trust the irreversibility of that chain. Nevertheless, technologically, it is the same !
USA (and other countries) have a powerful army they use to back fiat.
I never understand what people mean by that. Can I bring my note to the bank and they will give me a soldier?
The army is a huge cost to an average fiat holder/user, not a benefit.
You are forced to pay taxes in fiat. USA (and other countries) have a powerful army they use to back fiat. States offers financial titles and other stuff. Fiat is backed by many ways.
So you say that the "use value" of fiat is that USA accept it as payment of taxes, but this is an "exchange value" not a use value.
Fiat has no use value, unlike gold and bitcoin.
Once the population discredit their own government and stop to pay taxes because they become persuaded of the immorality of their government, then your fiat lose this value.
This can't happen with Bitcoin nor Gold.
Which is why I think there is more chance that Euro fall than Bitcoin.
With the Blockchain, as services develops on top of it everyday for other thing than monetary use, you are sure you'll be able to sell your Bitcoin because people will always need to insert in the blockchain.
As with Gold, that can always be used industrially or for jewel.
Such use value is very important because despite of the volatility or manipulation of the market, you know that what you have will be useful anyway, independently of its exchange value.
Fiat money started out in another way: it started out as a "proof of holding gold or silver" or was "backed" in some or other way. But now, fiat money stands on itself, as a state-issued token, printed on paper, or even just acknowledged in a computer account.
You are forced to pay taxes in fiat. USA (and other countries) have a powerful army they use to back fiat. States offers financial titles and other stuff. Fiat is backed by many ways.
My point is that a monetary asset is just an asset of which enough people think it is a monetary item. How that collective belief is established, is in fact somewhat irrelevant.
This is problematic, as you are merely creating a ponzi scheme.
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The opposite transition is also possible: usually this is called hyperinflation, after which the former monetary item is reduced to something like toilet paper (that is, takes on its former simple usage price).
Which I think why Austrians argues that having a use value is important. If you have a use value, then it can't disappear like toilet paper, despite market manipulation/volatility, which is very important to establish durable trust in the asset."Inserting in the blockchain" is freaking useful. Even if Bitcoin has not started with a use value, we can't deny it has one now.
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So the monetary value has nothing to do with the use value (and can be much larger - that is even the case for gold whose shear usage value is in fact pretty low). But Austrians started from the idea that in order for an intermediate good to *become* money, it needed to be a highly marketable (and hence valuable) asset.
yes, this is what I understood from Mises.
So did Bitcoin started from nothing ? or can we consider its first purpose when started (buying illegal stuff) could be considered "use value" and not "monetary value" ?
If so, the use value of today is very different from what it was in the beginning. But the "insert into blockchain" I described can't be considered as the first "use value" that made it highly marketable.
Well, my idea is that the kick-off from a highly marketable (useful) asset to a monetary asset is only just one way to get a monetary item. It could just as well start out as something else. If the pure Austrians don't agree with that, then I'm not following them there.
Fiat money started out in another way: it started out as a "proof of holding gold or silver" or was "backed" in some or other way. But now, fiat money stands on itself, as a state-issued token, printed on paper, or even just acknowledged in a computer account.
My point is that a monetary asset is just an asset of which enough people think it is a monetary item. How that collective belief is established, is in fact somewhat irrelevant. It could be by the Austrian way. It could be by the fiat way, initially backed and later uncoupled. Or it could be in the bitcoin way. Maybe there are other ways to establish a collective belief that some asset is going to get accepted by others as money. It is a kind of a bi-stable situation: if most people don't believe something is a monetary item, and hence don't accept it as such, then it is not a monetary item. If most people believe something is a monetary item, and hence accept it as such, then it IS a monetary item.
How an asset transits from the non-monetary state to the monetary state is a kind of mystery, and probably there are many ways. We're maybe seeing, with bitcoin, such a transition with our very eyes.
The opposite transition is also possible: usually this is called hyperinflation, after which the former monetary item is reduced to something like toilet paper (that is, takes on its former simple usage price).
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So the monetary value has nothing to do with the use value (and can be much larger - that is even the case for gold whose shear usage value is in fact pretty low). But Austrians started from the idea that in order for an intermediate good to *become* money, it needed to be a highly marketable (and hence valuable) asset.
yes, this is what I understood from Mises.
So did Bitcoin started from nothing ? or can we consider its first purpose when started (buying illegal stuff) could be considered "use value" and not "monetary value" ?
If so, the use value of today is very different from what it was in the beginning. But the "insert into blockchain" I described can't be considered as the first "use value" that made it highly marketable.
It started from nothing and there is no use value. Pure money.
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So the monetary value has nothing to do with the use value (and can be much larger - that is even the case for gold whose shear usage value is in fact pretty low). But Austrians started from the idea that in order for an intermediate good to *become* money, it needed to be a highly marketable (and hence valuable) asset.
yes, this is what I understood from Mises.
So did Bitcoin started from nothing ? or can we consider its first purpose when started (buying illegal stuff) could be considered "use value" and not "monetary value" ?
If so, the use value of today is very different from what it was in the beginning. But the "insert into blockchain" I described can't be considered as the first "use value" that made it highly marketable.
I am making this post, not for starting a debate on whether intrinsic value is important or not, but as an experience of thought about why, from an Austrian school perspective Proof Of Stake can't work.
I do not want to debate whether the austrian school is right or not, I want you to evaluate if, given my premises I reach a coherent conclusion.
When an Austrian is skeptical about Bitcoin, he points out the lack of "intrinsic value" in Bitcoin.
Since I don't like this term that is vague, I will borrow the term "use value" of Mises instead.
An Austrian argues that Rice, Tabacco and Gold have a purpose outside those of a medium of exchange.
You can eat Rice, you can smoke Tabacco, and you can make Jewel with gold.
The use value makes the commodity highly marketable, which develop it as a candidate to become a medium of exchange.
Then, if this commodity is durable, portable, divisible, uniform, non falsifiable knows as "characteristic of money", it develops naturally as a medium of exchange.
I do not want to debate whether the austrian school is right or not, I want you to evaluate if, given my premises I reach a coherent conclusion.
When an Austrian is skeptical about Bitcoin, he points out the lack of "intrinsic value" in Bitcoin.
Since I don't like this term that is vague, I will borrow the term "use value" of Mises instead.
An Austrian argues that Rice, Tabacco and Gold have a purpose outside those of a medium of exchange.
You can eat Rice, you can smoke Tabacco, and you can make Jewel with gold.
The use value makes the commodity highly marketable, which develop it as a candidate to become a medium of exchange.
Then, if this commodity is durable, portable, divisible, uniform, non falsifiable knows as "characteristic of money", it develops naturally as a medium of exchange.
I'm not entirely sure that Austrians want a monetary asset to have "intrinsic value". The theory (essentially Weber's theory of money) of the *origin* of money is based on an asset which has a use value, is highly marketable, and starts to be used as an intermediate asset because of that.
However, as far as I understand, even von Mises acknowledges that the value of an asset used as "money" (that is, as intermediate asset) is much higher than its "use" value, because once it is used as intermediate asset, there's a much higher demand for it than for only its use.
So the monetary value has nothing to do with the use value (and can be much larger - that is even the case for gold whose shear usage value is in fact pretty low). But Austrians started from the idea that in order for an intermediate good to *become* money, it needed to be a highly marketable (and hence valuable) asset.
I am making this post, not for starting a debate on whether intrinsic value is important or not, but as an experience of thought about why, from an Austrian school perspective Proof Of Stake can't work.
I do not want to debate whether the austrian school is right or not, I want you to evaluate if, given my premises I reach a coherent conclusion.
When an Austrian is skeptical about Bitcoin, he points out the lack of "intrinsic value" in Bitcoin.
Since I don't like this term that is vague, I will borrow the term "use value" of Mises instead.
An Austrian argues that Rice, Tabacco and Gold have a purpose outside those of a medium of exchange.
You can eat Rice, you can smoke Tabacco, and you can make Jewel with gold.
The use value makes the commodity highly marketable, which develop it as a candidate to become a medium of exchange.
Then, if this commodity is durable, portable, divisible, uniform, non falsifiable knows as "characteristic of money", it develops naturally as a medium of exchange.
There is no doubt about the "characteristic of money" in Bitcoin, which are higher than any existing alternative.
However, for the Austrian, the lack of "use value" of Bitcoin means that it can't develop as a medium of exchange.
But there is a clear use value of Bitcoin : Bitcoin allows you to insert a row in the Blockchain.
Even if Bitcoin is worth nothing as medium of exchange, inserting a row in a database that is global, can't be censured and can't be altered has a value.
This is the "use value" of Bitcoin.
As you know, such database would offer perspective for multiple industries, not yet exploited but soon will be. (justice, finance, insurance, payment and remittance)
The utility of the blockchain is rarely opposed, but if you admit its value, from an austrian perspective you also give "use value" to Bitcoin, since you can't insert without fees.
Surely enough, individually you can give no fees but if everybody do it, miners would more and more be reluctant to insert you, and this will be even worse when there will be no block rewards.
Even an altrust miner will make you pay the fees, because if he does not, he will loose money and then would not be able to pay the electricity bill.
Meaning that on the whole, fees, and thus use of Bitcoin will be mandatory to make the Blockchain lives.
And if Bitcoin has use value and the characteristic of money, then it will develop as medium of exchange.
So, from Austrian perspective, you can't admit blockchain utility without seeing Bitcoin as an emerging medium of exchange.
If you want to stay coherent and Austrian, either you deny blockchain utility or you accept Bitcoin as a kick ass medium of exchange.
Now, lots have been said about Bitcoin mining being "wasteful", and that Proof Of Stake would be "greener". (see https://en.bitcoin.it/wiki/Proof_of_Stake and http://bitcoinmagazine.com/6528/what-proof-of-stake-is-and-why-it-matters/)
I argue that from Austrian perspective, if a crypto is not "wasteful" (implying Proof Of Work), it can't have any "use value" and thus thrive as a medium of exchange.
Let's imagine a currency like NXT on Proof Of Stake. (It should be noted that I know nothing technically on NXT, but I just need a plausible name for sake of clarity)
You will mine a block with a % of your holding. IE, if you hold 1% of all NXT, you'll have 1% of mining the block.
Like Bitcoin, you would earn a block reward + transaction's fees.
Now my question is : why would a payer include a fee in its transaction ?
If there is no cost in inserting a transaction in the blockchain, an altruist miner would accept to process all transactions without fees. (for the benefit of the network and for protecting his stake)
If such is the case, there is no "use value" for NXT, thus (from austrian perspective again) it would not develop as a medium of exchange.
In turn, the "Stake" of miners would not worth anything, collapsing the network.
However when mining is costly (proof of work), if the miner want to survive without block reward, fees will be mandatory to pay the bills.
As the payer, Bitcoin is useful because it is needed to insert in the blockchain. As the miner, it is needed because it cost them real work to insert in the Blockchain.
Note that this explanation is also coherent with the labour theory of value of Marxians, which argues that gold is valuable because it requires work to extract.
I do not want to debate whether the austrian school is right or not, I want you to evaluate if, given my premises I reach a coherent conclusion.
When an Austrian is skeptical about Bitcoin, he points out the lack of "intrinsic value" in Bitcoin.
Since I don't like this term that is vague, I will borrow the term "use value" of Mises instead.
An Austrian argues that Rice, Tabacco and Gold have a purpose outside those of a medium of exchange.
You can eat Rice, you can smoke Tabacco, and you can make Jewel with gold.
The use value makes the commodity highly marketable, which develop it as a candidate to become a medium of exchange.
Then, if this commodity is durable, portable, divisible, uniform, non falsifiable knows as "characteristic of money", it develops naturally as a medium of exchange.
There is no doubt about the "characteristic of money" in Bitcoin, which are higher than any existing alternative.
However, for the Austrian, the lack of "use value" of Bitcoin means that it can't develop as a medium of exchange.
But there is a clear use value of Bitcoin : Bitcoin allows you to insert a row in the Blockchain.
Even if Bitcoin is worth nothing as medium of exchange, inserting a row in a database that is global, can't be censured and can't be altered has a value.
This is the "use value" of Bitcoin.
As you know, such database would offer perspective for multiple industries, not yet exploited but soon will be. (justice, finance, insurance, payment and remittance)
The utility of the blockchain is rarely opposed, but if you admit its value, from an austrian perspective you also give "use value" to Bitcoin, since you can't insert without fees.
Surely enough, individually you can give no fees but if everybody do it, miners would more and more be reluctant to insert you, and this will be even worse when there will be no block rewards.
Even an altrust miner will make you pay the fees, because if he does not, he will loose money and then would not be able to pay the electricity bill.
Meaning that on the whole, fees, and thus use of Bitcoin will be mandatory to make the Blockchain lives.
And if Bitcoin has use value and the characteristic of money, then it will develop as medium of exchange.
So, from Austrian perspective, you can't admit blockchain utility without seeing Bitcoin as an emerging medium of exchange.
If you want to stay coherent and Austrian, either you deny blockchain utility or you accept Bitcoin as a kick ass medium of exchange.
Now, lots have been said about Bitcoin mining being "wasteful", and that Proof Of Stake would be "greener". (see https://en.bitcoin.it/wiki/Proof_of_Stake and http://bitcoinmagazine.com/6528/what-proof-of-stake-is-and-why-it-matters/)
I argue that from Austrian perspective, if a crypto is not "wasteful" (implying Proof Of Work), it can't have any "use value" and thus thrive as a medium of exchange.
Let's imagine a currency like NXT on Proof Of Stake. (It should be noted that I know nothing technically on NXT, but I just need a plausible name for sake of clarity)
You will mine a block with a % of your holding. IE, if you hold 1% of all NXT, you'll have 1% of mining the block.
Like Bitcoin, you would earn a block reward + transaction's fees.
Now my question is : why would a payer include a fee in its transaction ?
If there is no cost in inserting a transaction in the blockchain, an altruist miner would accept to process all transactions without fees. (for the benefit of the network and for protecting his stake)
If such is the case, there is no "use value" for NXT, thus (from austrian perspective again) it would not develop as a medium of exchange.
In turn, the "Stake" of miners would not worth anything, collapsing the network.
However when mining is costly (proof of work), if the miner want to survive without block reward, fees will be mandatory to pay the bills.
As the payer, Bitcoin is useful because it is needed to insert in the blockchain. As the miner, it is needed because it cost them real work to insert in the Blockchain.
Note that this explanation is also coherent with the labour theory of value of Marxians, which argues that gold is valuable because it requires work to extract.
Interesting question, here is my take:
I think for the austrians, which I agree with, the interesting point is the bitcoin and the bitcoin fractions and the relatively fixed amount of bitcoins in existence. Not the number of bitcoins, that number is arbitrary. The question is, can we be sure that the actual number is static, or in the case of gold, the fact that the production is small relative to existing monetary gold, and independent of governments. In case of gold, we can not know the volume, only that it is relatively stable.
From a money policy point of view, the mining is not interesting, it is enough to know that the blockchain guarantees that the bitcoin number can not increase. It is also good to know that there is a minining reward that makes sure the miners keep running without the need for a central manager.
The problem for austrians have been that the value has to start with the use value of a commodity, and gracefully transform into money. In case of fiat, the last transformation is from the gold backing that existed long ago, to the current free floating fiat. The rule is the Mises' regression theorem.
I think we have shown with the practical experiment that is bitcoin, that this theorem is wrong, because bitcoins have value and it started from nothing. Some might disagree.
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1 Nxt is negligible so we can consider it zero fee.
No.
At the moment we have 5-10k Nxt transfer fees per day. It is simply not zero.
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I argue that from Austrian perspective, if a crypto is not "wasteful" (implying Proof Of Work), it can't have any "use value" and thus thrive as a medium of exchange.
No. The assumption of this argument is questionable. Wastefulness is not a necessary condition for utility or "use value".I bought a physical item with a PoS currency, how is this possible if it has no use value?
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from an austrian perspective you also give "use value" to Bitcoin, since you can't insert without fees.
Same for PoS. There is no PoS that I know of where you can transfer coins without a fee.Quote
why would a payer include a fee in its transaction ?
Because he has to. In Nxt, the minimum transaction fee is 1 Nxt. You can't make a transaction with zero fees.My point was that if inserting a transaction in a blockchain has no cost, then the currency used for paying miners don't have use value. (follow the reasoning I gave to reach the conclusion)
The only argument in this thread that led me to say : "yes, POS has a use value" is the argument of stdset which brought "the cost of protection" into the game which is real for POS currency.
Let me attempt a parphrasing of the OP:
Proof of stake currencies have zero cost of production and therefore don't have the appeal to Austrian school economics and Marx school of value followers that Proof of Work currencies do.
Good summary, but again the reasoning is important, and stdset have pointed out the "cost of protection", which can appease Austrian school objections. But not Marx followers. Proof of stake currencies have zero cost of production and therefore don't have the appeal to Austrian school economics and Marx school of value followers that Proof of Work currencies do.
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it's impossible to mine NXT without at least minimal exposure to risk of being hacked, your wallet must be online, your privkeys must be unencrypted somewhere in memory
That is interesting. Funny to see that the risk of hacking can be seen as a feature from austrian perspective.
I disagree.
If you do it right, there is zero risk of getting hacked, meaning that the hacker can't steal all your coins.
Nxt has a feature called "Leased forging"
This means:
I have an account with lots of Nxt, and an empty account.
Now I lease the forging power of my large account to my empty account.
(The privkeys of the large account are never online, because I can sign the lease transaction offline. If I'm extra paranoid, I put a faraday cage around this offline device
)Only the account that is empty is now online. If a hacker steals my privkeys, he can steal 0 Nxt.
Let me attempt a parphrasing of the OP:
Proof of stake currencies have zero cost of production and therefore don't have the appeal to Austrian school economics and Marx school of value followers that Proof of Work currencies do.
Proof of stake currencies have zero cost of production and therefore don't have the appeal to Austrian school economics and Marx school of value followers that Proof of Work currencies do.
Actually they have. To generate a PoS block, you have to spend a certain amount of CPU cycles.
The production cost is minimal, but it's there.
But it doesn't make sense to me that a currency has to be wasteful to have use value.
If a PoS currency: Can't be faked, can be transferred easily, has a production cost (even if minimal), and is scarce, it is usable to me.
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I argue that from Austrian perspective, if a crypto is not "wasteful" (implying Proof Of Work), it can't have any "use value" and thus thrive as a medium of exchange.
No. The assumption of this argument is questionable. Wastefulness is not a necessary condition for utility or "use value".I bought a physical item with a PoS currency, how is this possible if it has no use value?
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from an austrian perspective you also give "use value" to Bitcoin, since you can't insert without fees.
Same for PoS. There is no PoS that I know of where you can transfer coins without a fee.Quote
why would a payer include a fee in its transaction ?
Because he has to. In Nxt, the minimum transaction fee is 1 Nxt. You can't make a transaction with zero fees.
Let me attempt a parphrasing of the OP:
Proof of stake currencies have zero cost of production and therefore don't have the appeal to Austrian school economics and Marx school of value followers that Proof of Work currencies do.
Proof of stake currencies have zero cost of production and therefore don't have the appeal to Austrian school economics and Marx school of value followers that Proof of Work currencies do.
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