Topic: rpietila Altcoin Observer - page 232. (Read 387493 times)

CPoS certainly fixes that.

DeathAndTaxes is probably the clearest writer on this topic.  

The attacker needs 51% of coins the existed at some point in the past.  He can attack the network with 0% of the coins that are currently considered as valid. That's why it's called "nothing at stake": he can attack the network using coins that were already spent!

Can you provide technical explanation of this attack?

You misunderstand.  The risk isn't that someone could attack the network, it is that they could attack the network with no cost.

Imagine bitcoin worked using a PoS.  An early adopter had acquired 1M BTC at one time in the past but over time he lost/sold/spent/transferred them.   Today he has no bitcoins but the blockchain contains a history of a time when he did have 1M BTC.  If the amount of the stake being used is <1M BTC he could rewrite history not by using coins he has today (a real cost), not by buying millions of mining rigs (a real cost) but by using the history of the coins he once had (no cost).  He has absolutely nothing at risk and nothing to lose.   If he and potentially others decided to attack the network they would rewrite the blockchain starting from when they had a larger stake, creating a parallel history where they didn't lose/sell/spend/transfer the coins.  

They can attack the network based on what they had (but no longer do) in the past.  There is nothing at risk and no cost to the attack.  THAT is the PoS problem.  


Sure they can, however there is a cost to that attack and there is something at risk which they lose if they fail.  With PoS you can attack the network for "free" using something you had but no longer do.  It is very hard to secure against an attack where the attacker can do so at any time without any cost and without any risk.

The attacker needs 51% of coins the existed at some point in the past.  He can attack the network with 0% of the coins that are currently considered as valid. That's why it's called "nothing at stake": he can attack the network using coins that were already spent!

There is no "nothing-at-stake" problem. No entity can ever buy 51% of the coins in existance.

Because there are no decentralized PoS coins that are alive.

The developers of PoS coins either sign blocks as valid (e.g., Peercoin) or create new "updates" with checkpoints (e.g., Nxt).  In other words, they solve the history-rewrite problem by acting as a central authority. 

Coins are a stake.  Coins are not nothing when they have purchasing power.  Is your concern that it is too easy to dominate purchasing power for a small currency?  That makes sense when the market cap is low, but if you boostrap with PoW, to achieve market cap which is indefeasible in practice, then the problem is solved, is it not?

I believe it might be solvable.  Satoshi relies on the idea of the majority of people being "honest miners" for the system to function.  

If the cost to secure the network tends to zero, then the cost to attack the network tends to zero is well. 

The is the essence of the "nothing-at-stake" problem with PoS that, despite claims to the contrary, remains unsolved (and IMO very likely unsolvable). 

So why is this not already happening?

If you know how to kill it why don't you do so?

Honest questions..

No one has proven that it is possible to solve the "nothing-at-stake" problem.  In fact it is becoming clear that any PoX-type system can be attacked if the attacker holds 51% of the critical resource X (X = W for PoW and X = S for PoS).  It is easy to calculate the cost of an attack on PoW (it is the cost to acquire 51% of the hash power).  But what is the cost to attack a PoS system?  

Do you understand the "nothing-at-stake" problem (aka the "history re-write" problem)?

In PoS every currency unit is a small mining rig, and they are all created at Genesis block and it costs nothing. You don't have to make new regular capital investments into hardware, at least not significant ones, as for PoS any old computer will do that can run a wallet and the currency units inside the wallet do the mining. So the cost of securing the network is minimal, not zero, but perhaps 1-2% of the cost of the PoW network.

Cost of the attack of the PoS network is larger than cost of the attack on PoW network, as it's easier to buy hardware than to buy 51% currency units in existance in a PoS system, as that would drive the price billions and billions high.

The is the essence of the "nothing-at-stake" problem with PoS that, despite claims to the contrary, remains unsolved (and IMO very likely unsolvable).  

If the cost to secure the network tends to zero, then the cost to attack the network tends to zero is well. 

The is the essence of the "nothing-at-stake" problem with PoS that, despite claims to the contrary, remains unsolved (and IMO very likely unsolvable). 

If mining goes to PoS the cost tends to zero.  

A kill switch would never be used.  Centralization will not be used as a kill switch, but rather to force the network to an evolved protocol which serves the interest of the central entity.  There is essentially no probability that the interests of the centralizer would be optimized by killing a dominant coin.

In the long run PoW just will not work, for that reason, if that outcome is deemed a failure mode.  SlipperySlope's CPoS is the best alternative I've seen so far.  I also like that scheme because it should be pretty straightforward to refactor the block chain storage format to distribute it, in that scheme, which would solve the scalability issue.  It would not require much bandwidth, if the refactor kept transaction threads confined to cliques.  Then you could keep a full node on a cellphone.

Then the end result is still the same. It is the same if you have a deflationary currency as if you have a inflationary currency.

If you have large stakeholders with lots of wealth to protect then just like in the real world, people have to pay a "vault fee" to keep their gold secure. Say this is 1% per year to keep it in some vault. So large stakeholders either become miners and paying an amount of electricity equal to the vault fee or pay someone else to secure the network for them, which again would be equal to the vault fee.

But if you have an inflationary currency where there is a percentage increase or as some have proposed a fixed subsidy for miners, then the large stakeholders will lose some percent per year due to inflation, in an ideal situation, this would likely be the same as the vault fee. So stakeholders will still lose say 1% of their holdings per year, equal to the "vault fee" but this would just be inflation.

So either way, you still lose. As others like to say, there is no such thing as a free lunch.