Topic: Why isn't proof of stake more widely supported? - page 2. (Read 4061 times)

Since my post was linked to I would like to clarify a few things.

1) A Pure PoS system is unviable IMHO.  Having 51% of coins ensures you never will lose control.  Having 51% of hashing power ensures control today but doesn't guarantee it in the future.

2) I think there is some value to a hybrid system.  It gains efficiency over a pure PoW system. 
If we imagine all methods of hashing they would be on a scale like this

negligible capital cost                                   extreme capital cost
<------------------------------------------------------>
extreme operating cost                                 negigible operating cost

moving further to the right is better for defenders.  For a given TH/s of hashing power the network is stronger because the cost of defense is lower and the cost of an attack is higher.

A hybrid system moves the network to the right.  Likely limits need to be put into place so that the work portion of proof of work is still significant.  Alternative you could have a system where each block requires both a proof of work and proof of stake signature.   The theory is interesting.  My interest in it is improving the efficiency of securing the blockchain.

3)
That being said I have no interest in forking Bitcoin.  I think any experimenting especially for something this radical needs to be done in alt-chains.  Even if a hybrid system is shown to be an improvement I doubt Bitcoin will ever be forked (or that the hybrid fork will become dominant).  A hybrid system could be viable as a replacement and/or competitor to Bitcoin is development stagnates.

 

I think that there is definitely potential in PoS-based solutions. However, I don't think Bitcoin should in any way be mixed into this, that is a definite no. We're talking about a radical change and as it is now, there is no problem whatsoever with proof of work. There might be a problem in 5-10 years but that is then, not now.

The only solution is to test PoS-based models in alt chains and if proof of work proves to be problematic in the long run, then Bitcoin could try to make that change. Definitely not now though.

I like the discussion about this and we definitely need competing solutions that use PoS. For Bitcoin it's simple: if it's not broken, don't fix it. Currently proof of work is doing more than fine. Bitcoin is not about to do a massive change simply because something might cause issues in 5+ years.

If this proves to be Bitcoin's doom in the future and some other cryptocurrency does it right, then so be it. It's technological evolution.

It's also important to take into account the fact that it's completely possible that there are other solutions for the problems that might arise from proof of work as it is now. There is plenty of time to work on this and applying a proof of stake solution right now would be ridiculous.

Your argument is correct, but I don't think it raises an important concern. However, I agree with you about not supporting pure PoS. As described in the wiki, my proposal is not practical as a pure PoS system (only as a mixed system). I prefer an 80/20 or 95/5 mix, favoring stake.

There is a huge difference.

In a Pos only, once a miner gets more coins than any other miner it could get very difficult for other miners to compete if there is not enough coins to get or when one miner get hold of 51% of the coins, it will be impossible for other miners to even out the power.
With the Pow other miners can add (from the outside) and regain a power balance.

In a Pow, there is allways the possibility for a power battle creating a balance of power.

I´m all for moving to a 50/50...I´m against a Pos only.

But there are to many good points with a Pos system to be ignored.
 
A Pos means that the value of coins increase since they now also are the tokens that hold the right to mine more coins.
Thus the value of Bitcoins would increase with a Pos.

There are two distinct problems:

• After crossing 50%, a miner gains over-proportionate (from practical point of view, full) control of the network. Below 50% the relationship between control and share is linear.
• Transaction fees are per transaction, but mining costs are (mostly) per block. If we eliminate the block size limit, all other things being equal, transaction fees will therefore equilibrate below the marginal cost of mining.

These are both issues that need to be investigated. Maybe there already are phenomena that will compensate for this. Maybe PoS is not an appropriate way of countering either of them. But we need to understand them.

well I still say proof-of-transaction-activity or whatever you want to call my idea is better in every way, and no chain fork

Understand that. But it is important to know whether the primary issue is disagreement in principle or whether people just disagree becomes they prefer the status quo. Apparently, several people (not me) prefer proof-of-stake in principle, but also have a dominant preference for maintenance of the status quo. I wasn't aware that this was an important reason for opposition to proof of stake.

yah and the issues are currently being discussed in the various other threads. didn't really need a new topic was my point.

Anyone is free to contribute to the wiki. If you have some insights, then you can contribute yourself.

I like to keep track of opinions and keep putting information out there so people can make informed decisions.

A big problem is that very few people understand the issues clearly. That can only be resolved through continuing discussion and development of better online sources of information. These are complementary to one another.

D&T did a good job debunking this here: https://bitcointalksearch.org/topic/m.799136
It is also discussed in the proof of stake wiki as the "Monopoly problem"

Main Point: A dominant investment gives you absolute control over either system.  PoS requires a much larger investment to obtain control, PoW requires a smaller investment.

If you have additional questions, I am happy to answer them.

how can you possibly make this thread when you made the wiki page like 2 days ago? jump the gun much?

Just in case anyone missed it.

Maybe we can also start with initial investors, so that 100 people or more all buy in before launch.

The genesis block could have one huge multi-output coinbase transaction in it, issuing coins to the initial stakeholders...

-MarkM-

I still think though that it will be too easy to take over. Look at how large Deepbit always tended to be, from people giving up some of their profit in return for regular payments. I think something like that will happen, with more and mroe of the total nubmer of coins being tied up in that large pool as stake, until maybe only 1/121th of the total coins in existence are circulating, the other 120/121 of them being permanently tied up in maintaining an unbreakable monopoly.

It probably won't actually need 120/121 of the total coins, maybe q mere 51% of all coins will suffice, in which case it will be even easier.

But the more coins permanently tied up, the more the few in circulation should go up in price due to "rarity" maybe? unless just knowing that one pool controls the majority of the coins causes people to flock to yet another different cryprocurrency, one that is not controlled my some monopoly.

In fact the answer every time to monopoly might be simply to make another altcoin. The big players might ignore some of them as too puny to worry about of something, of they could keep quiet, growing across freenet and i2p and Tor, an underground grass roots person to person currency instead of a widely publicised scheme like bitcoin seems to prefer to be.

This is true. The initial miners can reinvest mining profits and obtain a larger and larger share of mining power over time. However, this is also true under the current system. Both systems allow free entry provided that markets for mining inputs are competitive. Just like people purchase GPUs to enter mining now, they would purchase coin to enter mining. The issue you are worried about is that a competitive exchange market may fail to arise, thus limiting entry. However, the initial miners have extremely strong reasons to fund the establishment of a competitive exchange market. The currency won't have any exchange value whatsoever in the absence of such a competitive exchange market. Control over a large volume of coin that is not exchangeable is not profitable.

If coinbase transactions take 120 blocks, lets say, for their outputs to mature, then the first miner won't start being able to put in any stake for the first 120 blocks. Then, however, they can put the full number of coins minted per block in as stake on each of the next 120 blocks.

Basically each stakeholder will only be able to put 1/120th of their stake into each block if they manage to mine 120 blocks in a row.

If someone else gets a block sometime within those 120 blocks, that frees up an extra full block's worth of minted coins to use to increase your stake going forward, but it means there is someone else out there now who can put a full block's worth of coins into the next block they mine. Then 120 blocks after they manage to mine a second block, they'll have twice that amount they can put in.

I suspect it will get very hard very fast for new miners to enter the mining biz with any chance of actually making a go of it.

So it seems likely to degenerate very very fast into a "final outcome" whether that final outcome is Cunicula's (1), monopoly, or his (2), Oligopoly, or his (3), perfect competition. (Of which number three seems very unlikely to me in this scenario.)

-MarkM-

P.S. Maybe not starting PoS until many blocks in, or phasing it in slowly by having it only count fractionally, like multiplied by min(10000/blockheight,1) or something, could help some but maybe not really much. (And if not much then little point adding it to bitcoin either...)

He's talking about pool miners.

About what exactly? http://blockchain.info/ provides data about ip's that relay blocks. In some cases it was done by a pool. In other cases by a private ip. If the relayer was a pool, then the pool in turn knows the ip adresses that was used to connect to it. The pool operates just like a vpn in this case.

This is not a requirement with proof-of-work, merely a convience for pool mining.


There is, but I'm not willing to argue that point.  It's secondary really, anyway.


Speak for yourself.

Anyway, I've made these kind of arguments many times over the past two years, quite literally on both sides of this issue.  What it all comes down to is that PoS doesn't offer an advantage over PoW, but attempts to solve a presumed future problem that I (no longer) agree exists.  I also do see potential problems in it's practical implementations, although those may not be insurmountable.  However, the very biggest problem with PoS is that a major entity could literally come in and buy it out and become a new central bank, as the requirement for having more than the processing power of the whole of the honest network no longer applies to a PoS miner with a large enough of a stake.  Your not going to solve a problem here.

Care to elaborate?

And the current proof-of-work system isn't a tragedy of the commons, it's actually the reverse of same.  I was thinking along these lines early on, and made some of those same very arguments about a year ago, but I accept my error now.  A tragedy of the commons requires that a common resource be consumed by self interested players, but what is really happening is that a common resource (the security of the blockchain) is actually being aggregated.  I've made many counter arguments to my prior position on this since then, particularly centered around the incentive for major future entities in competition investing in exclusive mining agreements.  Think Wal-Mart & McDonalds agreeing to partner on a mining center that makes every effort to exclude the transactions intended for the Target & Burger King alliance.  I.E., companies in different industries have an incentive to work together, but exclude their competitors, as far as that is realistic in order to avoid transaction fees & processing delays.  This adversarial situation benefits the bitcoin consumers collectively, regardless of how each set of mining alliances should treat each other.

Brick & Morter banks would have similar reciprocal processing agreements; in order to get the other bank to process their customers' transactions without a fee & relatively fast, they would have to do the same for their customers.  Such an agreement would benefit both banking institutions, regardless of their relative size.  For example, MEGABitCoinBAnk in NYC has 100,000 customers and a 1000 GPU data center, while LittleFarmersBitcoinTrust near Cincinnati only has 10,000 customers and a 50 gpu data center.  Both banking institutions stand to benefit to some degree, so long as they are not competing in the same local markets, so the agreement happens.  MEGABitCoinBAnk is likely to make dozens of such agreements, leveraging the gpus of those dozens of local banks, even if some of them do compete with each other in the same market.