Proof of stake is bad and why bitcoin is the only crypto I would trust

BitDane

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Quote from: headingnorth on January 15, 2023, 09:50:05 PM

Why I think proof of stake is bad and bitcoin is the only true decentralized crypto. Everything else is a scam as we have seen with so many major altcoins imploding over the years. Anyone else agree?

There are probably many other reasons why I believe proof of stake is terrible but these are a few I can think of right now.

You can also add the flaws of POS why they are considered centralized

Wealth centralization - this means the more coins the holder has the more power he has on the system which can lead to a concentration of wealth and power among small group of people.
Limited Validator Set - With the limited validator this can lead to centralization
Limited Participation - PoS typically requires a certain amount of assets to participate as a validator, which can limit the number of potential participants and lead to centralization.
Sybil attack Vulnerability - PoS systems is vulnerable to sybil attack, where attacker can create multiple identities to gain control of a large portion of network.
Higher Barrier to entry - new participants may have a difficulty participating because of the higher entry requirement to be a validator which leads a centralization among the existing participants.
Governance Centralization - PoS systems are often controlled by a small group of individuals or entities, giving them a disproportionate amount of control over the network's governance and decision-making processes.

Sources:
https://medium.com/stakin/centralization-of-stake-in-pos-f7ccb8f8254
https://www.quora.com/Why-does-proof-of-stake-invite-centralization
https://www.reddit.com/r/ethereum/comments/6d1mca/proof_of_stake_leads_to_centralization_with_worse/

goldkingcoiner

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Quote from: headingnorth on January 15, 2023, 09:50:05 PM

Why I think proof of stake is bad and bitcoin is the only true decentralized crypto. Everything else is a scam as we have seen with so many major altcoins imploding over the years. Anyone else agree?

1. Proof of stake tokens such as ethereum can be generated out of thin air in unlimited amounts. The creators can give themselves as much as they want and dump it onto the market whenever they want. Proof of stake is no better than the fiat money system where money can be printed by the central bank in unlimited amounts.

2. As we have seen over the years maybe 90 to 95% of crytpo scams have been perpetrated on the ethereum blockchain.

3. That is why proof of work is so much better. It takes a lot of work and effort to mine the bitcoins. Bitcoin cannot be simply generated out of thin air like ethereum and other sh*tcoins. Ethereum and 99% of altcoins are unregistered securities. The SEC and CFTC have both stated bitcoin is the only digital asset recognized as a commodity in the United States. Everything else are unregistered securities.

4. Bitcoin is the only crypto I can think of that doesn't have a leader or small group of people controlling it, which makes bitcoin perhaps the only digital asset that is really trustless. Ethereum has Vitalik Buterin, Cardano has Charles Hoskinson, Terra Luna had Do Kwon, etc. You have to trust that these people will not one day decide to steal all your money and run.

There are probably many other reasons why I believe proof of stake is terrible but these are a few I can think of right now.

Proof of stake isn't necessarily bad. Its just bad for Bitcoin. PoS would not only centralize Bitcoin but it would take away everything that makes Bitcoin Bitcoin. Now for altcoins, sure PoS can work quite well because thats what was envisioned. That does not make every PoS altcoin a scam. But it makes it possible for any PoS to become a scam. But nobody envisioned Bitcoin to be Proof of Stake. And I am strongly against PoS for Bitcoin. It is not an improvement and the only motivation for implementing PoS is the negative impact on the environment as the byproduct of electricity generation. And PoW needs a lot of electricity.

Some people point the finger at mining because it consumes electricity, which pollutes our planet, the more we generate it. But the real problem is the dirty way we generate our electricity, not the amount of electricity miners require.

headingnorth

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Quote from: savetheFORUM on January 18, 2023, 07:21:31 AM

Quote from: NotATether on January 17, 2023, 08:20:05 AM

Quote from: tbct_mt2 on January 17, 2023, 06:04:17 AM

Who are rich enough to derail Proof of Stake PoS coins?

Founder teams
Developer teams
~~~
Exchanges.

99% of the time, the dev teams of such Proof of Stake coins are so greedy that they try to get the lion's share early, just like that. Before the coins even gets to the exchanges. Most of the time it hardly works for them though. Exchanges (the less ethical ones) as I mentioned get far less of these kind of rug-pulls, but when they do, they usually identify those coins accurately and milk them out.

The day project developers realized that they could make money from creating a coin/token is the day new coins died for me. There is absolutely nothing in the world that could convince me otherwise, all the coins that we see today are ones that were created to make the owner richer. Including but not limited to even BNB which CZ created to make more money for Binance, hence himself.

So, there is absolutely no coin at all that could be considered as legit or decentralized anymore, they are all terrible and should be avoided at all costs. This is not really that much of a trouble of course if you end up with just bitcoin because it doesn't have a team at the top or an owner or project developer like that.

Agree 100%. Ethereum had a huge pre-mine where 70% of the tokens were given to devs and venture capital insiders.

The other major use case for ethereum, other than the founders openly stating they want it to become the premiere platform for CBDCs--is to further enrich the devs and VC insiders who have dumped their pre-mined coins onto naive retail investors after manipulating the price. Ethereum is the biggest pump and dump scam in crypto. Why this VC scam coin hasn't yet been declared an obvious security and stopped by the SEC remains a mystery, but perhaps the SEC was bribed to remain silent about it. But let's hope strong pressure from the Congress and public pressure will eventually force them to do the right thing.

savetheFORUM

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Quote from: NotATether on January 17, 2023, 08:20:05 AM

Quote from: tbct_mt2 on January 17, 2023, 06:04:17 AM

Who are rich enough to derail Proof of Stake PoS coins?

Founder teams
Developer teams
~~~
Exchanges.

99% of the time, the dev teams of such Proof of Stake coins are so greedy that they try to get the lion's share early, just like that. Before the coins even gets to the exchanges. Most of the time it hardly works for them though. Exchanges (the less ethical ones) as I mentioned get far less of these kind of rug-pulls, but when they do, they usually identify those coins accurately and milk them out.

The day project developers realized that they could make money from creating a coin/token is the day new coins died for me. There is absolutely nothing in the world that could convince me otherwise, all the coins that we see today are ones that were created to make the owner richer. Including but not limited to even BNB which CZ created to make more money for Binance, hence himself.

So, there is absolutely no coin at all that could be considered as legit or decentralized anymore, they are all terrible and should be avoided at all costs. This is not really that much of a trouble of course if you end up with just bitcoin because it doesn't have a team at the top or an owner or project developer like that.

klidex

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Quote from: Gallar on January 16, 2023, 11:11:28 AM

sometimes something that has ownership rights or someone who is responsible will surely be trusted and in the interest of many people.
but what happens in the world of crypto and bitcoin or digital assets, on the contrary, those with ownership rights are very prone to fraud.
then bitcoin is indeed the right choice in choosing digital assets to invest.
but I hope that other crypto assets will also be trusted in the future and there will be no fraud.

Basically someone who owns or stores Bitcoin crypto assets, especially in large quantities, he will not tell anyone and always recovers his ownership to avoid fraud.
If there is a world billionaire who says that he has adopted a large number of Bitcoins, then believe that he has really kept his assets safely or even used someone else's identity to buy and store these Bitcoin assets so that he is not tracked that he really has adopted Bitcoin. in bulk.
All crypto assets have the opportunity for theft or fraud what else in the future where technology will become more sophisticated and it will be easy for a hacker to be able to hack into investors' wallets and steal them.
One of the most effective ways is not to let other people know about large amounts of crypto adoption information.

Despairo

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Quote from: headingnorth on January 16, 2023, 11:55:48 PM

CBDCs has all the drawbacks of fiat money, which is what bitcoin was made to avoid. The main drawback being governments can print an infinite supply of government digital coins which devalues your fiat holdings over time, CBDCs are highly centralized and controlled by the whims of a handful of politicians or bureaucrats, among other problems. Money printing is the biggest source of massive inflation in the US in recent years. If the major use case of ethereum is just to be a platform for CBDCs then why the hell would anyone want to use it? Just stick with the fiat money system you have no reason to be involved with anything crypto.

It's true there's no reason fiat money to be involved with crypto, but they wouldn't care with those criticism and will try to make their CBDC looks new and claim to be have many improvement from the old fiat money. Many Average Joe doesn't really understand and not doing any deep research, so they will support the idea of this CBDC, again you can't force the government to not create CBDC.

Sure a true Bitcoin maximalist will hold most of their funds in Bitcoin, but it doesn't make them to not use fiat money or CBDC (if it's already adopted).

franky1

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doesnt need big money to derail ethereum

ethereum is the so called "biggest" PoS coin, right?
meant to have had the most independent markets and utility and soo many different subnetworks of utility, right?

yet even basic overview of ethereum market shows it has little to none of its own community..
if it had its own massive utility separate from bitcoin. it would have its own culture and sentiment where people would view ethereum market as a separate independent price discovery market, unlike bitcoin.

yet it 99.9% shadow traces bitcoins market. or more precisely bitcoins arbitrage is majority of all ethereums movements.

the markets wiggles of price movements although at a different value price ratio. wiggle in the same pattern

so here is the 5 day chart of both btc and eth

can you tell which one is ethereum

what about this last week(and ill add more hints this time)

NotATether

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Quote from: tbct_mt2 on January 17, 2023, 06:04:17 AM

Who are rich enough to derail Proof of Stake PoS coins?

Founder teams
Developer teams
~~~
Exchanges.

99% of the time, the dev teams of such Proof of Stake coins are so greedy that they try to get the lion's share early, just like that. Before the coins even gets to the exchanges. Most of the time it hardly works for them though. Exchanges (the less ethical ones) as I mentioned get far less of these kind of rug-pulls, but when they do, they usually identify those coins accurately and milk them out.

tbct_mt2

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Quote from: Kakmakr on January 17, 2023, 12:42:15 AM

I think my main issue with "Proof of Stake" is this :

People with a lot of money, can derail a whole project ...if they use that toilet paper (Fiat) to get a big enough Stake.. to influence the outcome of decisions that are made with that project.

It gives Fiat rich people or governments an easy opportunity to attack that technology. It is way more difficult to convert FIAT into a whole mining operation and to pay for the electricity to get enough hashing power to do the same with Bitcoin. Wink

Who are rich enough to derail Proof of Stake PoS coins?

Founder teams
Developer teams
Exchanges. Newbies can surprise if they know exchanges derail PoS coins a lot with their staking pools. The fiasco of FTX exchange, Terra Foundation Guard, Celsius, Three Arrows Capital and some big projects, ventures in 2022 are very red flags for PoS coins and risk of their centralized powers in operations of exchanges.

With centralized power, Terra team successfully biased the vote for community to reach a solution for their fork from Terra to Terra Classic and now we have LUNA and LUNC.

Even big altcoins like Ethereum and BNB (Binance token) are centralized too.

Undoubtedly the only one cryptocurrency that has decentralized network is Bitcoin.

Kakmakr

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I think my main issue with "Proof of Stake" is this :

People with a lot of money, can derail a whole project ...if they use that toilet paper (Fiat) to get a big enough Stake.. to influence the outcome of decisions that are made with that project.

It gives Fiat rich people or governments an easy opportunity to attack that technology. It is way more difficult to convert FIAT into a whole mining operation and to pay for the electricity to get enough hashing power to do the same with Bitcoin. Wink

headingnorth

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Quote from: Despairo on January 16, 2023, 11:26:36 PM

Quote from: headingnorth on January 16, 2023, 10:57:37 AM

To me this is scary but if you like government CBDCs then ethereum is the blockchain for you.

It's scary, but I guess everyone are forced to use it because CBDC will replace paper fiat.

To be fair, I think CBDC is better than unregulated stable coin e.g. USDT, USDC, BUSD etc since the government might have an insurance funds to recover CBDC losses from error, hack or any other thing.

Both of them are centralized, KYC, and have same value, but CBDC can offer many better features than stable coin.

CBDCs has all the drawbacks of fiat money, which is what bitcoin was made to avoid. The main drawback being governments can print an infinite supply of government digital coins which devalues your fiat holdings over time, CBDCs are highly centralized and controlled by the whims of a handful of politicians or bureaucrats, among other problems. Money printing is the biggest source of massive inflation in the US in recent years. If the major use case of ethereum is just to be a platform for CBDCs then why the hell would anyone want to use it? Just stick with the fiat money system you have no reason to be involved with anything crypto.

Despairo

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Quote from: headingnorth on January 16, 2023, 10:57:37 AM

To me this is scary but if you like government CBDCs then ethereum is the blockchain for you.

It's scary, but I guess everyone are forced to use it because CBDC will replace paper fiat.

To be fair, I think CBDC is better than unregulated stable coin e.g. USDT, USDC, BUSD etc since the government might have an insurance funds to recover CBDC losses from error, hack or any other thing.

Both of them are centralized, KYC, and have same value, but CBDC can offer many better features than stable coin.

franky1

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Quote from: headingnorth on January 16, 2023, 10:57:37 AM

Joseph Lubin is one of the founding members of ethereum. His company Consensys runs Infura which provides the main node service for ethereum.
Lubin praises government CBDCs and actually wants CBDCs to run on the ethereum blockchain in the US and elsewhere.

From Lubin and his Consensys website:

To me this is scary but if you like government CBDCs then ethereum is the blockchain for you.

But what if i told you the CBDC origins is in the "hyperledger" projects. by which even bitcoin blockstream devs have been part of(aswell as the ethereum elites)

where the terms "layer 2" buzzword origined from hyperledger. not the open crypto community
yep bitcoin is being the sandbox test of many CBDC future code.. in regards to its mainnet(reserves chain) and subnetwork(user payments) network

but governments dont want to use existing mainnets as their base reserves platform. they just want to take working open code. and adopt it into their own new genesis beginning networks

as for PoS
its fatal flaws are these 2 things

a. lack of underlying cost of coin creations means lack of underlying value. thus the market price speculates at a higher multiple compared to its small value(and can/will correct just as massively)
meaning value security is null and void

b. thresholds of being validators ends up pooling/syndicating the small shrimp amount holders. into large custodians. the shrimp then wont want to oppose their custodian because if they do oppose it. their stake is gone. thus they end up foolishly accepting whatever their custodian proposes, even if its a bad idea

NotATether

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Quote from: Edwardard on January 15, 2023, 11:05:11 PM

Proof of stake has its own advantages too like greater scalibility, flexibility, faster operations, cheap, energy efficient, etc.

"Scalability"

If you want that, you should be running your own blockchain using Hyperledger Fabric which uses its own consensus mechanism which is faster than PoS/PoW (Kafka orderers) and thus the most scalable and risk-free in terms of economics (there are no economics!), but it provides 0% decentralized trust.

PoS in large coins has a bigger problem; it pretends to be trustworthy, but the large exchanges and pools who are the top stakers are not, so the whole crypto just provides false trust.

Gallar

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sometimes something that has ownership rights or someone who is responsible will surely be trusted and in the interest of many people.
but what happens in the world of crypto and bitcoin or digital assets, on the contrary, those with ownership rights are very prone to fraud.
then bitcoin is indeed the right choice in choosing digital assets to invest.
but I hope that other crypto assets will also be trusted in the future and there will be no fraud.

headingnorth

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NO SHITCOIN INSIDE

Joseph Lubin is one of the founding members of ethereum. His company Consensys runs Infura which provides the main node service for ethereum.
Lubin praises government CBDCs and actually wants CBDCs to run on the ethereum blockchain in the US and elsewhere.

From Lubin and his Consensys website:

Quote

Why Blockchain and Ethereum for CBDC

Blockchain technology bring unique advantages to a CBDC. Ethereum in particular is the most production-ready blockchain to support CBDC requirements in terms of scalability and privacy.

System trust. A blockchain-based CBDC enables central banks to control the currency while protecting the privacy and independence of the CBDC’s use to the end users. We believe it is critical that users are not locked in by intermediaries so that they trust and use the CBDC.
Programmability. CBDC rules can be hard-coded in the protocol to facilitate compliance, i.e. wallet thresholds or third-party access to the system.
Data availability. Distributed systems such as blockchains ensure data availability and resilience, in addition to trust and transparency around transaction history. Ethereum has proven its capacity to support very large networks with 10k+ nodes and hundred thousands of users.
Innovation. A blockchain-based CBDC benefits from the innovative products and services that are being built across the open source blockchain ecosystem, including non-custodial wallets, zero-knowledge cryptography, and decentralized finance. Ethereum is the largest blockchain ecosystem in the world, with over 350,000 developers.

https://consensys.net/solutions/payments-and-money/cbdc/

To me this is scary but if you like government CBDCs then ethereum is the blockchain for you.

kryptqnick

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While I do support proof-of-work and agree that proof-of-stake is an inferior mechanism, I didn't think of the easy-to-raise supply as a reason. I guess I thought it was more limited than central bank policies for fiat, assuming that there was a predetermined set condition of how much is accumulated under which conditions with proof-of-stake, but after this thread, I read more and realized that it's technically true but the policies are way more flexible than I thought. To me, a big point against proof-of-stake was ideological: it's literally a system that makes the rich even richer and doesn't give anyone else a decent chance. Mining equipment and maintenance costs money, but at least we have separate categories of miners and richest hodlers, and how rich you are doesn't directly determine your further profit. I am happy that Ethereum is finally not proof-of-work, though, as the GPU market was crazy when people used them for mining ETH.

pooya87

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Using these two very unrelated topics together (PoS and bitcoin) is pretty weird!

Quote from: headingnorth on January 15, 2023, 09:50:05 PM

Everything else is a scam as we have seen with so many major altcoins imploding over the years.

Altcoins "imploding" is not always because they were "scams". They die only because they are useless.

Quote from: headingnorth on January 16, 2023, 03:34:31 AM

Well I liked ethereum a lot better when it was using PoW.

Then you do not know what Ethereum is!
Ethereum is a centralized shitcoin with a gigantic premine and a mutable blockchain where they can roll back blocks if they wanted to and a severely flawed protocol that can easily be exploited. The only usage it has is creating tokens to scam people with.
You see, none of these things had anything to do with PoS! Ethereum switching to PoS was adding yet another flaw on top of their pile...

The only reason this shitcoin got any big was 2 part:
1. It had a pretty strong pumping team with millions of dollars to waste.
2. It provided a fantastic environment to scam people very easily and without any cost which also attracted a lot of gamblers who invested in those scams.

Flexystar

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In addition to this anyone holding more than enough tokens in stakes can control the fate of that token in terms of pricing. It's easy to say that these systems are well planned etc but they could cause the problems in long term. We have seen this happening with xrp in the initial days and now with ETH same thing is happening. In fact many project owners will distribute only some amount of token for staking thus keeping the large chunk at their wallets for later usage. I never liked PoS. Bitcoin is just so perfect in all the senses. I love to see the PoW because it is real, there is energy involved, there is actual hard and smart work is underway which makes it perfect.

Aanuoluwatofunmi

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stead.builders

The more reason why bitcoin can never turn to proof of stake is because of centralization, anything that has to do with central authorities bitcoin cannot cope or allign itself together with such system, the more reason also that has presented bitcoin as the only decentralized and most preferred digital currency, if people truly understand the process that entails proof of stake they wouldn't have recommended it at all as a suggestion for bitcoin to turn into because the decentralization is part of what's being enjoyed through bitcoin.

Topic: Proof of stake is bad and why bitcoin is the only crypto I would trust (Read 329 times)