Ethereum staking – More sustainable crypto(ethereum.org)
ethereum.org
Ethereum staking – More sustainable crypto
https://ethereum.org/en/eth2/staking
85 comments
I wonder if we’ll actually see flight from PoW cryptocurrencies to PoS at rates sufficient to reduce the current environmental impact. Anecdotally, a lot of the people I know who were early in Bitcoin are talking more about PoS coins as the natural progression and PoW as doomed tech. But until I actually see the transition happen, I remain (optimistically) skeptical.
Agreed. However it still is dominated by the "haves" vs the "have nots". Proof of stake is awarded to those with the largest stakes, which favors state-sponsored miners and works against decentralization.
I like how Monero's RandomX is designed to level the playing field: ASIC miners don't significantly improve over CPU mining so more people can participate in mining. Of course, this doesn't address pools, but it is a start.
Yay proof of stake!
I like how Monero's RandomX is designed to level the playing field: ASIC miners don't significantly improve over CPU mining so more people can participate in mining. Of course, this doesn't address pools, but it is a start.
Yay proof of stake!
I would argue that under both proof of stake and mining your income is always directly proportional to the amount invested, either in equipment or stake.
The main difference is the minimum barrier to entry, however under PoS you have access to various pooling services, which simulate consumer scale mining (complete with the associated inefficiency).
The main difference is the minimum barrier to entry, however under PoS you have access to various pooling services, which simulate consumer scale mining (complete with the associated inefficiency).
Except under mining, increased investment opens up access to better equipment like ASICs, access to cheaper energy agreements, etc. But no amount of $ unlocks the ability to validate faster (per unit staked).
And then everyone gets their hands on this tech so the mining difficultly goes up and you are back to square one.
History of stuff like Antminers has been stages of private access, high end market, then low end ...
But while products are moving down those stages, more wattage-efficient ones are entering at top.
I think you're right that ROI curve will get closer to linear (utility costs aside), but I don't think it's going to be a very fast progression.
But while products are moving down those stages, more wattage-efficient ones are entering at top.
I think you're right that ROI curve will get closer to linear (utility costs aside), but I don't think it's going to be a very fast progression.
To clarify: I don't think proof of stake is perfect.
I think the original pie in the sky dream, as hinted at in the Bitcoin white paper, was for decentralization through anyone (all the way to students in their dorms) being able to participate in consensus.
I don't think proof of stake gets things all the way there, but I think it does get closer to a linear ROI curve, compared to how proof of work is right now.
I think the original pie in the sky dream, as hinted at in the Bitcoin white paper, was for decentralization through anyone (all the way to students in their dorms) being able to participate in consensus.
I don't think proof of stake gets things all the way there, but I think it does get closer to a linear ROI curve, compared to how proof of work is right now.
>However it still is dominated by the "haves" vs the "have nots". Proof of stake is awarded to those with the largest stakes, which favors state-sponsored miners and works against decentralization.
where is the difference to mining? To mine you need GPUs and electricity which you can equate to $$$, just like capital you lock up under PoS. it effectively makes no difference.
and everyone earns the same percentages, whales only earn more in absolute terms.
where is the difference to mining? To mine you need GPUs and electricity which you can equate to $$$, just like capital you lock up under PoS. it effectively makes no difference.
and everyone earns the same percentages, whales only earn more in absolute terms.
The percentage is based on hardware invested or capital staked.
I don't think it should be. That is just lazily giving a pass to whales to dominate what is supposed to be decentralized. Totally counter to the spirit of cryptocurrency.
I don't think it should be. That is just lazily giving a pass to whales to dominate what is supposed to be decentralized. Totally counter to the spirit of cryptocurrency.
In PoS everybody gets the same rate of return. On Ethereum it's currently about 8% annualized, regardless of how much you have staked.
On Bitcoin everybody gets about the same rate of return, but major operations can generally get first access to the newest ASICs or special deals for electric power, so their rates are better.
No cryptocurrency has found a way to give the exact same rewards to every human participating. That'd require some kind of verified identity. It's always going to be a rate of return times amount invested in hardware/stake.
On Bitcoin everybody gets about the same rate of return, but major operations can generally get first access to the newest ASICs or special deals for electric power, so their rates are better.
No cryptocurrency has found a way to give the exact same rewards to every human participating. That'd require some kind of verified identity. It's always going to be a rate of return times amount invested in hardware/stake.
> No cryptocurrency has found a way to give the exact same rewards to every human participating. That'd require some kind of verified identity.
Proof of Humanity recently launched and claims to have solved this https://www.proofofhumanity.id/
Proof of Humanity recently launched and claims to have solved this https://www.proofofhumanity.id/
That is crazy. Thanks for the link!
The difference is in the real resources used. If energy and hardware are used, that's a real cost incurred on society. If only currency is locked up, that only puts a cost on the stakers. As far as the rest of society is concerned, the supply went down, so the value went up, and there's no difference.
> Proof of stake is awarded to those with the largest stakes, which favors state-sponsored miners and works against decentralization.
Hopefully it won't be too bad. Here you can see the current involvement from different parties in the beacon chain https://beaconcha.in/charts
Currently "others" is ~52%, Kraken is 2nd with ~17%
I'm trying to understand a similar graph for Cardano (another PoS chain), but not sure I can tell anything from it about the distribution. https://cardano.bytemaniac.net/istoria/
Hopefully it won't be too bad. Here you can see the current involvement from different parties in the beacon chain https://beaconcha.in/charts
Currently "others" is ~52%, Kraken is 2nd with ~17%
I'm trying to understand a similar graph for Cardano (another PoS chain), but not sure I can tell anything from it about the distribution. https://cardano.bytemaniac.net/istoria/
it's also important to note that stakers can not withdraw yet. once withdrawal functionality is enabled I expect many more folks to stake their ETH because the uncertainty will be gone.
I am a solo staker and its been a blast learning about PoS and participating in the community. Right now you can earn ~7.8% rewards if you lock up your eth on your own validator. Once EIP1559 goes live (July) and the full transition to PoS merge around the end of the year there are some folks on the ETH research team who see rewards conservatievly going to ~25% [1]
[1] https://twitter.com/drakefjustin/status/1384124998084792324?...
[1] https://twitter.com/drakefjustin/status/1384124998084792324?...
What does the process for staking actually look like? I remember setting up lightning a bunch of years ago and ended up losing some fractions of BTC by messing things up along the way.
Is there something foolproof for staking right now, or is it a lot of "git clone this repo, copy this address to a config file" etc.
Is there something foolproof for staking right now, or is it a lot of "git clone this repo, copy this address to a config file" etc.
Here is a easy wizard for staking eth2 https://launchpad.ethereum.org/en/
How do the rewards APR change with the more validators there are?
The staking base rewards will go down as more stakers stake eth, however, after the merge to PoS (End of year target) fee revenue will be awarded to stakers in addition to the primary staking rewards.
Reading through the FAQ on staking it says you will get penalties for being offline and the network eats through 800mb/hour which comes out to around 576gb/month.
Is this practical to do at home? Or are pools the way to go for people on consumer home internet?
Is this practical to do at home? Or are pools the way to go for people on consumer home internet?
Great question!
The penalties for being offline are equal to the rewards you would have earned. It is okay to be offline if you have minor outage for few hours or if you're moving and will be offline for a few days. You simply would need to go back online for the same amount of time to make your rewards back.
I am a solo staker. My machine churns through about 800 gb/month. I am a huge advocate for solo staking if you have the hardware and have technical ability. I work in finance not software engineering, and i was able to set a machine up with no issue.
Check out the link below if you would like more resources or if you have any questions!
https://www.reddit.com/r/ethstaker/
The penalties for being offline are equal to the rewards you would have earned. It is okay to be offline if you have minor outage for few hours or if you're moving and will be offline for a few days. You simply would need to go back online for the same amount of time to make your rewards back.
I am a solo staker. My machine churns through about 800 gb/month. I am a huge advocate for solo staking if you have the hardware and have technical ability. I work in finance not software engineering, and i was able to set a machine up with no issue.
Check out the link below if you would like more resources or if you have any questions!
https://www.reddit.com/r/ethstaker/
Thanks I'll check out the subreddit to keep learning about this. Been putting it off for months.
I don't think I can do staking at home because Comcast would shut me down if I start using 800gb/mo
I don't think I can do staking at home because Comcast would shut me down if I start using 800gb/mo
If you have a gaming desktop and do a complete system wipe, you will be downloading several terabytes of data in backups and games.
Most AAA games these days are in 100GB range, and a steam library of my friends occupies a couple of TB. Also Dropbox / Onedrive give you 1TB of space, and is easy to fill it up with videos and photos.
A continous stream of 1.7 megabits, seems reasonable on both FTTC and FTTH, and maybe even on a xDSL. Definately more systainable than GPU mining
Most AAA games these days are in 100GB range, and a steam library of my friends occupies a couple of TB. Also Dropbox / Onedrive give you 1TB of space, and is easy to fill it up with videos and photos.
A continous stream of 1.7 megabits, seems reasonable on both FTTC and FTTH, and maybe even on a xDSL. Definately more systainable than GPU mining
I believe you need a minimum of 32 eth so unless you're confident in your internet connection and have ~$80,000 in eth, you're better off with a pool.
This is the website it links to if you chose <32ETH route to join pools. https://beaconcha.in/stakingServices
If I have 32ETH but don't want to run this on my home internet, how do you compare pools because the fees are all over the place?
If I have 32ETH but don't want to run this on my home internet, how do you compare pools because the fees are all over the place?
Can someone who knows more about Eth tell me if this staking is a 100% guaranteed to happen? Is there a chance that miners rebel or a fork is made?
It's pretty much guaranteed at this point. The staking network has been running since Dec. 1, with over 3% of all ETH staked so far. The initial migration is simple to implement and a high priority for the devs. Community support is very high, and once everybody switches to the new fork the miners have no influence.
The miners could keep running the old PoW chain but it's unlikely to have significant value. Exchanges will support the PoS chain and some are already offering staking services. Tokens collateralized by off-chain assets will use the PoS chain. Etc.
With the PoW chain having little value, miners will be deeply unprofitable and most of them will have to quit. Moving to other chains isn't much of an option because other GPU chains have little aggregate value.
The miners could keep running the old PoW chain but it's unlikely to have significant value. Exchanges will support the PoS chain and some are already offering staking services. Tokens collateralized by off-chain assets will use the PoS chain. Etc.
With the PoW chain having little value, miners will be deeply unprofitable and most of them will have to quit. Moving to other chains isn't much of an option because other GPU chains have little aggregate value.
Is there a limit to the number of staker-spots available? I'm wondering about inflation if too many people join the party.
The more people join, the lower the rate of return[1]. The max inflation is about 1.71% annually, if 100M ETH stakes. Total supply right now is only 115M.
Net issuance will be lower than that because some transaction fees will get burned. It's possible that the supply will actually decrease.
There's no limit to the amount of stake other than the ETH supply, but they're talking about setting a limit of 32M ETH, just because it'd be more efficient and they don't really expect it to get that high anyway. Under that plan the validators get automatically rotated if >32M stakes.
[1] https://docs.ethhub.io/ethereum-roadmap/ethereum-2.0/eth-2.0...
Net issuance will be lower than that because some transaction fees will get burned. It's possible that the supply will actually decrease.
There's no limit to the amount of stake other than the ETH supply, but they're talking about setting a limit of 32M ETH, just because it'd be more efficient and they don't really expect it to get that high anyway. Under that plan the validators get automatically rotated if >32M stakes.
[1] https://docs.ethhub.io/ethereum-roadmap/ethereum-2.0/eth-2.0...
There is a high likelihood of a fork, but forks aren't necessarily harmful to Eth. The "rebelling" miners can't actually do anything to the proof of stake system.
The real people who decide what fork wins are the exchanges and users, and those people have no real reason to stick with PoW.
The real people who decide what fork wins are the exchanges and users, and those people have no real reason to stick with PoW.
Miners will rebel and continue mining, some will mine on an ETH fork and others switch to other coins. GPUs will not be returned to gamers anytime soon.
Theoretically the ETH PoW fork will drop in value relative to the original ETH. That would decrease the mining reward and result in less mining (and more GPUs returned to gamers).
You cant kill a PoW chain, see Dogecoin. Sad but it is what it is.
The goal isn't to "kill" the coin entirely, the goal is to reduce the amount of mining by 99% or more. And that's an easily achieveable goal. See Ethereum Classic which only uses 1% of the resources of Ethereum because of how low its price is.
Staking requires putting aside 32 ETH for something around 2 years. That's a tad prohibitive at current prices.
Staking can be pooled just like regular POW mining pools. However unlike POW mining pools you have to give the majority of your funds to a trusted party whereas with POW mining the maximum you can loose is the unpaid balance between payouts which is usually some days worth of mining.
there will be decentralized & trustless staking pools such as RocketPool, where even if a loss of funds occurs the loss is subsidized through the entire protocol.
You can stake with Avalanche (AVAX) today for a smaller price which will be decreased in near future. ETH like all other classical nakamoto algorithms have a limit on number of participants in consensus. Avalanche has no such limit on decentralization without sacrificing security or throughput.
Yeah, i'm working on multichain stuff now, and i've pretty much dropped geth/ganache for avalanchego for running simulations… really can't compete with the innovation on the consensus layer… and all the security tradoffs put forth in the eth l2's can be done with coreth for even more "scalability".
With the fracturing taking place now in the eth ecosytem, its only a matter of time avalanche sees more adoption just purely on the technical capability basis.
With the fracturing taking place now in the eth ecosytem, its only a matter of time avalanche sees more adoption just purely on the technical capability basis.
You may earn up to 7.8% APR (currently) on your stake.
Why would you stake at 7.8% when you can earn 10% on celsius ATM? Honest question.
It's not all about the amount of APY, also which ecosystem you want to belong to and who you trust will improve over time too. Ethereum vs Celsius is a no brainer at the moment.
So the bet is that Ethereum has a lot of room to grow, and you want to be in that space, right?
For me it's more about existing developer activity. In my bubble, 90% of the people are building with/on Ethereum or Polkadot. I usually build things together with others, not by my own, so having a large ecosystem is a requirement and so far, Ethereum is the only community that really fulfills that.
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if staking with a pool. if you run your own validator you currently receive about 7.8%
https://launchpad.ethereum.org/en/
https://launchpad.ethereum.org/en/
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Is there a way for stakers to safely pool?
Coinbase will manage it for you unless you are in NY
https://help.coinbase.com/en/coinbase/trading-and-funding/st...
https://help.coinbase.com/en/coinbase/trading-and-funding/st...
pooling
Can someone better inform me how POS actually works? Can you actually have proof of any arbitrary (but consistent) action?
Seems like it, here's Algorand's Pure Proof-of-Stake approach as an example https://algorand.foundation/algorand-protocol/about-algorand...
Etherscan.io shows all the transactions being POW. When will we start seeing POS transactions?
Here you can see the POS blockchain https://beaconcha.in/
Until ETH2.0 comes online you won't see it...it will be at least another 18-24 months till the transition is completed.
there is in fact a fast-merge proposal that has community & dev support with a preemptive date of October 2021, if we're conservative February 2022. Once the merge happened PoW will be shut down and all transactions will be validated by the Proof of Stake consensus.
Ethereum staking
Still will have high gas fees.
Still will have high gas fees.
it's not like solutions are heavily being worked on: https://ethereum-magicians.org/t/a-rollup-centric-ethereum-r..., https://vitalik.ca/general/2021/04/07/sharding.html, https://ethresear.ch/t/complete-revamp-of-the-stateless-ethe...
> Rewards are given for actions that help the network reach consensus. You'll get rewards for batching transactions into a new block or checking the work of other validators because that's what keeps the chain running securely.
The unstated gotcha here is that the chain operates through a variation of BFT agreement where staked coins vote for new blocks. All the usual BFT constraints apply -- namely, if fewer than 66% of the staked coins can reach a quorum, the chain stalls. This would mean that the network is only as resilient as the nodes that contribute the least-resilient 33% of the coin votes.
I bring this up because it has some pretty terrible resiliency implications below.
> Although you can earn rewards for doing work that benefits the network, you can lose ETH for malicious actions, going offline, and failing to validate.
If the coin is successful, then this really serves to incentivize DDoS attacks.
PoS is fundamentally a "rich-get-richer" system -- the means of making new coins tomorrow are intrinsically tied to owning coins today by the protocol itself. There's no way around this. This intrinsic coupling has two significant economic implications, which in turn impact the chain's resiliency:
* The price of coins is a function of their expected future revenue from staking. If you want to become a staker, the expected value you'll pay for your coins will include not only the spot price of the token, but also all the future (but time-discounted) revenue that coin will earn you from staking it. This is the lower-bound case, too -- if there's something even more profitable than staking you could be using the coins for, then the expected price of the coin will reflect that activity instead of staking.
* Coins minted from staking would need to be continuously re-staked in order to maintain current profitability relative to your competitors. Stakers can't afford not to do this, unless there's a buyer (or use-case) that can give an even higher ROI than all future ROI from staking block rewards.
This impacts chain resiliency as follows:
* There will never be any spare capacity for fail-over, since staking your coins will always be more profitable than keeping them on stand-by in order to recover from failed block producers. If the chain encounters a liveness failure (e.g. more than 33% of the staked coins go offline), new block producers can't just step in and take over without buying the coin first (and the more successful / long-term-valuable the coin is, the higher that price will be). The price of the token would either need to first come down to whatever level the highest-bidding poor but honest block producer can afford, or the protocol would need to slash a portion of the 33% of offline coins until quorum can be met. Neither of these things is instantaneous, so you'd be looking at a dead chain for some non-negligible amount of time. (Note that this is not true for PoW -- mining rigs can lie dormant until the difficulty falls to the point where it's profitable to turn them on, thereby ensuring that a liveness failure in the profitable block-producers does not lead to an overall liveness failure for the chain).
* It's very costly for new honest block-producers to join the network, which will make the network brittle. As the token becomes more successful and its long-term value realized, honest block producers will have to pay more and more up-front capital costs to start participating. The only people who can sell them coins to stake are their competition, so there's little seller information asymmetry to exploit here -- the seller knows exactly how much these coins are worth to the buyer for staking, so they will always price that in. This is a direct consequence of the means of coin production being tied to coin ownership.
* If the coin is successful, then there will reach a point where the cheapest way for a block producer to grow their revenue from staking is to knock other staking nodes offline (or hack them and cause their coins to be slashed from bad behavior). There's no fail-over capacity to take over block production if the staking coin quantity decreases, so the attacker only needs to succeed once in getting their competition slashed. Then, their fraction of all coins staked will increase due to other coins getting slashed. (Contrast this to PoW, where the attacker not only needs to knock the competing block-producer offline, but keep it offline indefinitely).
It would be a mistake to say that Ethereum 2.0 is in any way similar to Ethereum today. The economics of its PoS system make it more brittle, less resilient, and less egalitarian than Ethereum 1.0. Moreover, it would be misleading to say that Ethereum 2.0 is an open-membership system -- the economics make it so newcomers can't compete with the initial block-producers unless the price of the token always goes up faster than the initial block-producers believe it will.
The unstated gotcha here is that the chain operates through a variation of BFT agreement where staked coins vote for new blocks. All the usual BFT constraints apply -- namely, if fewer than 66% of the staked coins can reach a quorum, the chain stalls. This would mean that the network is only as resilient as the nodes that contribute the least-resilient 33% of the coin votes.
I bring this up because it has some pretty terrible resiliency implications below.
> Although you can earn rewards for doing work that benefits the network, you can lose ETH for malicious actions, going offline, and failing to validate.
If the coin is successful, then this really serves to incentivize DDoS attacks.
PoS is fundamentally a "rich-get-richer" system -- the means of making new coins tomorrow are intrinsically tied to owning coins today by the protocol itself. There's no way around this. This intrinsic coupling has two significant economic implications, which in turn impact the chain's resiliency:
* The price of coins is a function of their expected future revenue from staking. If you want to become a staker, the expected value you'll pay for your coins will include not only the spot price of the token, but also all the future (but time-discounted) revenue that coin will earn you from staking it. This is the lower-bound case, too -- if there's something even more profitable than staking you could be using the coins for, then the expected price of the coin will reflect that activity instead of staking.
* Coins minted from staking would need to be continuously re-staked in order to maintain current profitability relative to your competitors. Stakers can't afford not to do this, unless there's a buyer (or use-case) that can give an even higher ROI than all future ROI from staking block rewards.
This impacts chain resiliency as follows:
* There will never be any spare capacity for fail-over, since staking your coins will always be more profitable than keeping them on stand-by in order to recover from failed block producers. If the chain encounters a liveness failure (e.g. more than 33% of the staked coins go offline), new block producers can't just step in and take over without buying the coin first (and the more successful / long-term-valuable the coin is, the higher that price will be). The price of the token would either need to first come down to whatever level the highest-bidding poor but honest block producer can afford, or the protocol would need to slash a portion of the 33% of offline coins until quorum can be met. Neither of these things is instantaneous, so you'd be looking at a dead chain for some non-negligible amount of time. (Note that this is not true for PoW -- mining rigs can lie dormant until the difficulty falls to the point where it's profitable to turn them on, thereby ensuring that a liveness failure in the profitable block-producers does not lead to an overall liveness failure for the chain).
* It's very costly for new honest block-producers to join the network, which will make the network brittle. As the token becomes more successful and its long-term value realized, honest block producers will have to pay more and more up-front capital costs to start participating. The only people who can sell them coins to stake are their competition, so there's little seller information asymmetry to exploit here -- the seller knows exactly how much these coins are worth to the buyer for staking, so they will always price that in. This is a direct consequence of the means of coin production being tied to coin ownership.
* If the coin is successful, then there will reach a point where the cheapest way for a block producer to grow their revenue from staking is to knock other staking nodes offline (or hack them and cause their coins to be slashed from bad behavior). There's no fail-over capacity to take over block production if the staking coin quantity decreases, so the attacker only needs to succeed once in getting their competition slashed. Then, their fraction of all coins staked will increase due to other coins getting slashed. (Contrast this to PoW, where the attacker not only needs to knock the competing block-producer offline, but keep it offline indefinitely).
It would be a mistake to say that Ethereum 2.0 is in any way similar to Ethereum today. The economics of its PoS system make it more brittle, less resilient, and less egalitarian than Ethereum 1.0. Moreover, it would be misleading to say that Ethereum 2.0 is an open-membership system -- the economics make it so newcomers can't compete with the initial block-producers unless the price of the token always goes up faster than the initial block-producers believe it will.
> the means of making new coins tomorrow are intrinsically tied to owning coins today by the protocol itself.
It's not a shocking economic situation that you can use capital to acquire more capital. I don't know exactly what equilibrium the long term staking rewards will tend to, but it's not very different from interest - where for nearly no risk your capital lodged with a bank increases. The other side is that in a healthy financial system, locking money up has a cost too, so it's appropriate to recompense those who do.
It's not a shocking economic situation that you can use capital to acquire more capital. I don't know exactly what equilibrium the long term staking rewards will tend to, but it's not very different from interest - where for nearly no risk your capital lodged with a bank increases. The other side is that in a healthy financial system, locking money up has a cost too, so it's appropriate to recompense those who do.
I'm talking about the impact of tying coin ownership to coin production on the chain's resiliency, not the morality of earning interest.
And you don't accept the argument that it increases resiliency?
I found Vitalik's arguments quite persuasive.
https://vitalik.ca/general/2020/11/06/pos2020.html
Another angle is that with the arrival of hashrate markets, a PoW miner can attack a blockchain that they have negligable investment in. In PoS that's not possible. You can't attack a PoS chain without a large investment locked into it.
You seem to be warning of various bad effects that we haven't seen in fiat currencies, despite the fact that interest is analogous to staker rewards. For example, the fact that I don't sell someone with EUR my USD without taking into account the interest that EUR can earn vs USD has not directly led to either currency becoming unreasonably expensive to acquire.
I found Vitalik's arguments quite persuasive.
https://vitalik.ca/general/2020/11/06/pos2020.html
Another angle is that with the arrival of hashrate markets, a PoW miner can attack a blockchain that they have negligable investment in. In PoS that's not possible. You can't attack a PoS chain without a large investment locked into it.
You seem to be warning of various bad effects that we haven't seen in fiat currencies, despite the fact that interest is analogous to staker rewards. For example, the fact that I don't sell someone with EUR my USD without taking into account the interest that EUR can earn vs USD has not directly led to either currency becoming unreasonably expensive to acquire.
I see that Vitalik conveniently left out the part where PoS breaks down if you hack a staker's node and destroy their coins (either by knocking it offline or by forcing it equivocate -- both are slashable offenses). That is far, far, FAR cheaper than trying to buy your way in.
> You seem to be warning of various bad effects that we haven't seen in fiat currencies, despite the fact that interest is analogous to staker rewards.
Except, I'm not. PoS and fiat currencies have very little in common. If PoS was a fiat currency, then the people who staked more of it would not only get more interest yield, but also get to collectively decide who else gets to spend their money, how much they receive, and when (i.e. by deciding which transactions get included and which do not). This is a far, far worse outcome.
> You seem to be warning of various bad effects that we haven't seen in fiat currencies, despite the fact that interest is analogous to staker rewards.
Except, I'm not. PoS and fiat currencies have very little in common. If PoS was a fiat currency, then the people who staked more of it would not only get more interest yield, but also get to collectively decide who else gets to spend their money, how much they receive, and when (i.e. by deciding which transactions get included and which do not). This is a far, far worse outcome.
> Coins minted from staking would need to be continuously re-staked in order to maintain current profitability relative to your competitors
Everybody gets the exact same rate of return regardless of how much they have staked. Each validator has 32 ETH and gets the same amount of reward. You can take your profits and make a new validator or use them for something else, either way your existing validators will have the same profitability as everyone else.
Everybody gets the exact same rate of return regardless of how much they have staked. Each validator has 32 ETH and gets the same amount of reward. You can take your profits and make a new validator or use them for something else, either way your existing validators will have the same profitability as everyone else.
> Everybody gets the exact same rate of return regardless of how much they have staked.
I don't think that's true. The amount of ETH created per block is determined independently of the amount of ETH staked. So if you stake 100 ETH and I stake 100 ETH, and we're the only stakers, then the protocol gives us each 50% of the ETH minted. But if someone else comes along and stakes 200 ETH, then you and I only get 25% each.
This means that staking rewards are zero-sum. If the total reward stays constant, then my rewards per block increase if your stake decreases and mine stays the same (or if mine increases and yours stays the same). Therein lies the problem -- if I'm going to remain competitive with you, then I need to re-stake as much of my ETH block rewards as you do in order to keep receiving ETH at the same rate as you.
I don't think that's true. The amount of ETH created per block is determined independently of the amount of ETH staked. So if you stake 100 ETH and I stake 100 ETH, and we're the only stakers, then the protocol gives us each 50% of the ETH minted. But if someone else comes along and stakes 200 ETH, then you and I only get 25% each.
This means that staking rewards are zero-sum. If the total reward stays constant, then my rewards per block increase if your stake decreases and mine stays the same (or if mine increases and yours stays the same). Therein lies the problem -- if I'm going to remain competitive with you, then I need to re-stake as much of my ETH block rewards as you do in order to keep receiving ETH at the same rate as you.
The total ETH created does depend on the amount staked. Here's a table[1] and formula[2]. The total reward doesn't go up linearly with the number of validators, but it does go up. Lowering the incentive for attacks like you mention is a reason for that.
And while having fewer validators gives you a somewhat higher reward per validator, it's still that case that all validators get the same reward in any given block. Everyone is equally competitive. Someone who reinvests will get higher absolute rewards than they got before, but they pay the price of locking up more capital.
In the same way, a miner could reinvest profits into more mining equipment, but that doesn't make them more competitive, just bigger. Their profit margin will be the same (barring economies of scale that don't exist in staking).
[1] https://docs.ethhub.io/ethereum-roadmap/ethereum-2.0/eth-2.0...
[2] https://github.com/ethereum/eth2.0-specs/blob/dev/specs/phas...
And while having fewer validators gives you a somewhat higher reward per validator, it's still that case that all validators get the same reward in any given block. Everyone is equally competitive. Someone who reinvests will get higher absolute rewards than they got before, but they pay the price of locking up more capital.
In the same way, a miner could reinvest profits into more mining equipment, but that doesn't make them more competitive, just bigger. Their profit margin will be the same (barring economies of scale that don't exist in staking).
[1] https://docs.ethhub.io/ethereum-roadmap/ethereum-2.0/eth-2.0...
[2] https://github.com/ethereum/eth2.0-specs/blob/dev/specs/phas...
> The total ETH created does depend on the amount staked. Here's a table[1] and formula[2].
Thank you! I was unaware of this. I stand corrected.
However, my original point stands under the added constraint that we don't have enough tokens to alter the yield (i.e. staking our tokens won't push the total staked quantity across a "yield boundary"). The difference in participation between two different yields is considerable, so I would expect this to be the common case.
> Everyone is equally competitive. Someone who reinvests will get higher absolute rewards than they got before, but they pay the price of locking up more capital.
Joining later puts you at a disadvantage, because you have to buy coins off of people who could be staking them. That's problematic from a resiliency perspective, because it makes it harder for new block-producers to come online. It also means that there's no "reserve capacity" in the system to tolerate the sudden loss of a large number of staked coins. This isn't true in PoW, because obsolete miners that aren't profitable to run today could be brought online in a pinch if enough profitable ones were to suddenly go offline.
> In the same way, a miner could reinvest profits into more mining equipment, but that doesn't make them more competitive, just bigger.
These aren't comparable. I could come up with a better, more efficient way to generate PoW outside of the protocol. But in PoS, the protocol mandates that I only use staking to increase my coin income. Per my original point, what this means in practice is that there will come a point where it's cheaper to increase my staking yield by DDoS'ing staking nodes, who will be slashed as a result (the link you gave indicates that the slashing begins after 25 minutes of over 33% of the staked tokens being knocked offline).
Thank you! I was unaware of this. I stand corrected.
However, my original point stands under the added constraint that we don't have enough tokens to alter the yield (i.e. staking our tokens won't push the total staked quantity across a "yield boundary"). The difference in participation between two different yields is considerable, so I would expect this to be the common case.
> Everyone is equally competitive. Someone who reinvests will get higher absolute rewards than they got before, but they pay the price of locking up more capital.
Joining later puts you at a disadvantage, because you have to buy coins off of people who could be staking them. That's problematic from a resiliency perspective, because it makes it harder for new block-producers to come online. It also means that there's no "reserve capacity" in the system to tolerate the sudden loss of a large number of staked coins. This isn't true in PoW, because obsolete miners that aren't profitable to run today could be brought online in a pinch if enough profitable ones were to suddenly go offline.
> In the same way, a miner could reinvest profits into more mining equipment, but that doesn't make them more competitive, just bigger.
These aren't comparable. I could come up with a better, more efficient way to generate PoW outside of the protocol. But in PoS, the protocol mandates that I only use staking to increase my coin income. Per my original point, what this means in practice is that there will come a point where it's cheaper to increase my staking yield by DDoS'ing staking nodes, who will be slashed as a result (the link you gave indicates that the slashing begins after 25 minutes of over 33% of the staked tokens being knocked offline).
Not sure if this is what you meant but there's no actual "yield boundary," it's a continuous function. The table just gives examples of the function outputs.
I think you're overestimating the amount of ETH that will stake. Right now it's just 3%, and they think it's unlikely to go over 30% or so. ETH is used for a lot of stuff besides staking, with major uses so far including collateral for stablecoins and other defi, NFT purchases, and trading. The daily ETH trading volume right now is $34 billion, which is more than triple the staked amount.
Also, while losing over 1/3 results in a loss of finality, we'd be losing something that doesn't exist in PoW networks in the first place. The network continues to run[1], with a nonzero but low chance of reverted blocks, while the quadratic inactivity leak burns away stake until 2/3 of remaining stake is active again.
DDoS that knocked out over a third of the network, running on ISPs and hosting services all over the world on various independently-developed clients, would be quite a feat, and not likely to be sustained for very long. Since there will likely be plenty of non-staking ETH, more stake will be deposited after the attack, bringing the network back to the equilibrium of satisfactory returns. Or, if the attack were so severe it scared people off, then the price of ETH would also be affected, reducing the value of the attacker's stake.
[1] https://ethresear.ch/t/explaining-the-liveness-guarantee/422...
I think you're overestimating the amount of ETH that will stake. Right now it's just 3%, and they think it's unlikely to go over 30% or so. ETH is used for a lot of stuff besides staking, with major uses so far including collateral for stablecoins and other defi, NFT purchases, and trading. The daily ETH trading volume right now is $34 billion, which is more than triple the staked amount.
Also, while losing over 1/3 results in a loss of finality, we'd be losing something that doesn't exist in PoW networks in the first place. The network continues to run[1], with a nonzero but low chance of reverted blocks, while the quadratic inactivity leak burns away stake until 2/3 of remaining stake is active again.
DDoS that knocked out over a third of the network, running on ISPs and hosting services all over the world on various independently-developed clients, would be quite a feat, and not likely to be sustained for very long. Since there will likely be plenty of non-staking ETH, more stake will be deposited after the attack, bringing the network back to the equilibrium of satisfactory returns. Or, if the attack were so severe it scared people off, then the price of ETH would also be affected, reducing the value of the attacker's stake.
[1] https://ethresear.ch/t/explaining-the-liveness-guarantee/422...
> Not sure if this is what you meant but there's no actual "yield boundary," it's a continuous function. The table just gives examples of the function outputs.
Yes, I see that now. Thanks again for the clarification (honestly, I wish they just put out a graph like literally everyone else does). Let me see if I can formulate my point now with their continuous function:
You had said up-thread:
> And while having fewer validators gives you a somewhat higher reward per validator, it's still that case that all validators get the same reward in any given block. Everyone is equally competitive. Someone who reinvests will get higher absolute rewards than they got before, but they pay the price of locking up more capital.
First, I think you meant "it's still the case that all staked coins get the same reward in a given block" (emphasis mine). The system doesn't know how many distinct validators exist, since a single entity can just simulate a bunch of entities.
Second, the fundamental issue here is that you have to do something that's at least as profitable (in ETH) as re-staking your coins to remain competitive with other stakers. Because staking ETH is intrinsically tied to block production, this has an impact on the system's overall resiliency with respect to how quickly new honest block producers can be brought online: honest block producers need to buy their way in. The higher the yield on ETH, the higher the barrier to entry for new block producers -- the equivalent to "difficulty adjustments" in PoW would be the price and yield of ETH crashing.
From a resiliency perspective, that's pretty bad -- the only way for new honest block producers to be able to afford to enter the system is to either (1) wait for the system to shit itself so badly that the market devalues it to the point where they can afford to join, or (2) amass enough wealth that they can buy the coins. Part (2) is problematic because this wealth threshold can easily be higher than the wealth threshold required to attack the network itself. For example, it could be cheaper to just steal coins, or bribe other people to cause competing block producers to get slashed.
Which brings me to your point here:
> Also, while losing over 1/3 results in a loss of finality, we'd be losing something that doesn't exist in PoW networks in the first place. The network continues to run[1], with a nonzero but low chance of reverted blocks, while the quadratic inactivity leak burns away stake until 2/3 of remaining stake is active again.
First, "loss of finality" here is the same as a liveness failure. A distributed system that implements a consensus algorithm using decisions made by fewer than 2/3 of the decision-making participants (staked coins in this case) cannot be BFT, by definition. You can't put a probability on finality here either (i.e. "low chance of reverted blocks" is a nonsensical statement), because if over 1/3 of the staked coins are malicious and under the control of an adaptive adversary, then the adversary always has a way to stop the remaining 2/3 from ever reaching agreement. Your only recourse here is to declare out-of-band that these coins are bad, manually and permanently slash them via a code patch, and restart the network by decree (at which point, what's the point of having a blockchain?)
Second, this means that there does not exist a BFT agreement algorithm that removes votes from the system with less than 2/3 of the original votes. Like, how do nodes even agree in a BFT way on who to slash? How do they even agree in a BFT way that it's been long enough for them to carry out a slashing? Again, because the over-1/3 of the coins are not participating honestly, and because the system must be BFT, this means that there's always a way for that over-1/3 coins to prevent the under-2/3 coins from deciding these things.
Now, it doesn't have to be this way. The problem of recovering from BFT liveness failures has been investigated before [2], even before Bitcoin existed, and one approach to recovery is to cause the system to permanently split into two systems (i.e. fork), with 2/3 votes on one side and 1/3 on the other. Maybe this is what Ethereum 2.0 will do? But if so, that kinda breaks the promise of finality -- it's up to each use to choose which fork represents the fork that did _not_ get compromised, and without PoW, it's really one validator set's word against another's (of course, both forks' sets will insist up and down that the other is the corrupted fork -- they're financially incentivized to do so).
> DDoS that knocked out over a third of the network, running on ISPs and hosting services all over the world on various independently-developed clients, would be quite a feat, and not likely to be sustained for very long.
Maybe this data is out of date by now, but as of September 2019 over half of ETH nodes run in datacenters (and of those datacenters, most run in Amazon) [1]. If these datacenter operators kill VMs or delay their network traffic (and to be clear, accidental outages do happen), then the coins staked on these VMs will get slashed. Also, the question to ask here what the distribution of distinct network paths that exist between staked coins looks like. If there are not many distinct network paths between staked coins -- i.e. if there are a few "choke points" in the network -- then these become the points of failure in the entire system. A BGP prefix hijack or a cut cable can lead to liveness failures, and whatever slashing behavior takes place from that.
> Since there will likely be plenty of non-staking ETH, more stake will be deposited after the attack, bringing the network back to the equilibrium of satisfactory returns.
If over 1/3 of the staked coins go offline, there's no way for the network to agree in a BFT manner on anything. That includes deciding to admit new ETH to staking.
> Or, if the attack were so severe it scared people off, then the price of ETH would also be affected, reducing the value of the attacker's stake.
If the attacker only cares about causing a liveness failure, the value of the ETH is presumably unimportant. The goal has been met.
[1] https://thenextweb.com/news/ethereum-nodes-cloud-services-am...
[2] https://www.usenix.org/conference/nsdi-07/beyond-one-third-f...
Yes, I see that now. Thanks again for the clarification (honestly, I wish they just put out a graph like literally everyone else does). Let me see if I can formulate my point now with their continuous function:
You had said up-thread:
> And while having fewer validators gives you a somewhat higher reward per validator, it's still that case that all validators get the same reward in any given block. Everyone is equally competitive. Someone who reinvests will get higher absolute rewards than they got before, but they pay the price of locking up more capital.
First, I think you meant "it's still the case that all staked coins get the same reward in a given block" (emphasis mine). The system doesn't know how many distinct validators exist, since a single entity can just simulate a bunch of entities.
Second, the fundamental issue here is that you have to do something that's at least as profitable (in ETH) as re-staking your coins to remain competitive with other stakers. Because staking ETH is intrinsically tied to block production, this has an impact on the system's overall resiliency with respect to how quickly new honest block producers can be brought online: honest block producers need to buy their way in. The higher the yield on ETH, the higher the barrier to entry for new block producers -- the equivalent to "difficulty adjustments" in PoW would be the price and yield of ETH crashing.
From a resiliency perspective, that's pretty bad -- the only way for new honest block producers to be able to afford to enter the system is to either (1) wait for the system to shit itself so badly that the market devalues it to the point where they can afford to join, or (2) amass enough wealth that they can buy the coins. Part (2) is problematic because this wealth threshold can easily be higher than the wealth threshold required to attack the network itself. For example, it could be cheaper to just steal coins, or bribe other people to cause competing block producers to get slashed.
Which brings me to your point here:
> Also, while losing over 1/3 results in a loss of finality, we'd be losing something that doesn't exist in PoW networks in the first place. The network continues to run[1], with a nonzero but low chance of reverted blocks, while the quadratic inactivity leak burns away stake until 2/3 of remaining stake is active again.
First, "loss of finality" here is the same as a liveness failure. A distributed system that implements a consensus algorithm using decisions made by fewer than 2/3 of the decision-making participants (staked coins in this case) cannot be BFT, by definition. You can't put a probability on finality here either (i.e. "low chance of reverted blocks" is a nonsensical statement), because if over 1/3 of the staked coins are malicious and under the control of an adaptive adversary, then the adversary always has a way to stop the remaining 2/3 from ever reaching agreement. Your only recourse here is to declare out-of-band that these coins are bad, manually and permanently slash them via a code patch, and restart the network by decree (at which point, what's the point of having a blockchain?)
Second, this means that there does not exist a BFT agreement algorithm that removes votes from the system with less than 2/3 of the original votes. Like, how do nodes even agree in a BFT way on who to slash? How do they even agree in a BFT way that it's been long enough for them to carry out a slashing? Again, because the over-1/3 of the coins are not participating honestly, and because the system must be BFT, this means that there's always a way for that over-1/3 coins to prevent the under-2/3 coins from deciding these things.
Now, it doesn't have to be this way. The problem of recovering from BFT liveness failures has been investigated before [2], even before Bitcoin existed, and one approach to recovery is to cause the system to permanently split into two systems (i.e. fork), with 2/3 votes on one side and 1/3 on the other. Maybe this is what Ethereum 2.0 will do? But if so, that kinda breaks the promise of finality -- it's up to each use to choose which fork represents the fork that did _not_ get compromised, and without PoW, it's really one validator set's word against another's (of course, both forks' sets will insist up and down that the other is the corrupted fork -- they're financially incentivized to do so).
> DDoS that knocked out over a third of the network, running on ISPs and hosting services all over the world on various independently-developed clients, would be quite a feat, and not likely to be sustained for very long.
Maybe this data is out of date by now, but as of September 2019 over half of ETH nodes run in datacenters (and of those datacenters, most run in Amazon) [1]. If these datacenter operators kill VMs or delay their network traffic (and to be clear, accidental outages do happen), then the coins staked on these VMs will get slashed. Also, the question to ask here what the distribution of distinct network paths that exist between staked coins looks like. If there are not many distinct network paths between staked coins -- i.e. if there are a few "choke points" in the network -- then these become the points of failure in the entire system. A BGP prefix hijack or a cut cable can lead to liveness failures, and whatever slashing behavior takes place from that.
> Since there will likely be plenty of non-staking ETH, more stake will be deposited after the attack, bringing the network back to the equilibrium of satisfactory returns.
If over 1/3 of the staked coins go offline, there's no way for the network to agree in a BFT manner on anything. That includes deciding to admit new ETH to staking.
> Or, if the attack were so severe it scared people off, then the price of ETH would also be affected, reducing the value of the attacker's stake.
If the attacker only cares about causing a liveness failure, the value of the ETH is presumably unimportant. The goal has been met.
[1] https://thenextweb.com/news/ethereum-nodes-cloud-services-am...
[2] https://www.usenix.org/conference/nsdi-07/beyond-one-third-f...
> if over 1/3 of the staked coins are malicious
So now you've escalated the attack to be a 33% staker, which I don't think you'd mentioned before. I'll note that 33% of stake is likely to cost more than 50% of mining hardware, and certainly would at the high levels of staking you're concerned about.
> The system doesn't know how many distinct validators exist
Each validator has 32 ETH. If you want to stake more, then you run more validators.
The system does continue running with a split chain, each side apply the leak to the other side. Seems to me if the network reconnects, the side with the most stake would automatically be chosen as the winner, and if somehow the network never reconnects, then a working chain in each might be what you want.
To the extent that social decisions are necessary, this 2014 post on "weak subjectivity" is the first to address your objection to that sort of thing:
https://blog.ethereum.org/2014/11/25/proof-stake-learned-lov...
At this point, I'm going to just suggest learning more about how the system actually works. A good starting point is these papers:
Casper FFG: https://arxiv.org/abs/1710.09437
Combining GHOST and Casper: https://arxiv.org/abs/2003.03052
So now you've escalated the attack to be a 33% staker, which I don't think you'd mentioned before. I'll note that 33% of stake is likely to cost more than 50% of mining hardware, and certainly would at the high levels of staking you're concerned about.
> The system doesn't know how many distinct validators exist
Each validator has 32 ETH. If you want to stake more, then you run more validators.
The system does continue running with a split chain, each side apply the leak to the other side. Seems to me if the network reconnects, the side with the most stake would automatically be chosen as the winner, and if somehow the network never reconnects, then a working chain in each might be what you want.
To the extent that social decisions are necessary, this 2014 post on "weak subjectivity" is the first to address your objection to that sort of thing:
https://blog.ethereum.org/2014/11/25/proof-stake-learned-lov...
At this point, I'm going to just suggest learning more about how the system actually works. A good starting point is these papers:
Casper FFG: https://arxiv.org/abs/1710.09437
Combining GHOST and Casper: https://arxiv.org/abs/2003.03052
> So now you've escalated the attack to be a 33% staker, which I don't think you'd mentioned before.
I mentioned it in my original comment, reproduced below:
"The unstated gotcha here is that the chain operates through a variation of BFT agreement where staked coins vote for new blocks. All the usual BFT constraints apply -- namely, if fewer than 66% of the staked coins can reach a quorum, the chain stalls. This would mean that the network is only as resilient as the nodes that contribute the least-resilient 33% of the coin votes."
Also, as mentioned before, the cost attacking the network is not the cost as buying 33% of the staking coins. The cost to attack the network is the minimum of either buying 33% of the coins, or compromising 33% of the staked coins' nodes and forcing them to misbehave. Either way, you get a liveness failure.
> The system does continue running with a split chain, each side apply the leak to the other side
It may, but it is definitely not operating in a BFT manner at that point any longer. There is no in-band recovery from an attacker that compromises 33% or more of the staked coins, since they can forever stall the network. Contrast this to PoW, where an attacker that controls 33% or more of the mining power can be dislodged by the honest participants acquiring more mining power (since hashes/sec, not coins, determines who can produce blocks).
> To the extent that social decisions are necessary, this 2014 post on "weak subjectivity" is the first to address your objection to that sort of thing:
In other words, you have to trust somebody to resolve forks for you out-of-band. Note that PoW does not have this deficiency -- when presented with two conflicting chains, the one with the highest cumulative PoW is the "true" chain.
> At this point, I'm going to just suggest learning more about how the system actually works. A good starting point is these papers:
I've read both, and there's nothing special about them that invalidates anything I've written above.
The points I raised in this thread are distributed systems 101 material. Maybe the Ethereum team should pick up a textbook.
I mentioned it in my original comment, reproduced below:
"The unstated gotcha here is that the chain operates through a variation of BFT agreement where staked coins vote for new blocks. All the usual BFT constraints apply -- namely, if fewer than 66% of the staked coins can reach a quorum, the chain stalls. This would mean that the network is only as resilient as the nodes that contribute the least-resilient 33% of the coin votes."
Also, as mentioned before, the cost attacking the network is not the cost as buying 33% of the staking coins. The cost to attack the network is the minimum of either buying 33% of the coins, or compromising 33% of the staked coins' nodes and forcing them to misbehave. Either way, you get a liveness failure.
> The system does continue running with a split chain, each side apply the leak to the other side
It may, but it is definitely not operating in a BFT manner at that point any longer. There is no in-band recovery from an attacker that compromises 33% or more of the staked coins, since they can forever stall the network. Contrast this to PoW, where an attacker that controls 33% or more of the mining power can be dislodged by the honest participants acquiring more mining power (since hashes/sec, not coins, determines who can produce blocks).
> To the extent that social decisions are necessary, this 2014 post on "weak subjectivity" is the first to address your objection to that sort of thing:
In other words, you have to trust somebody to resolve forks for you out-of-band. Note that PoW does not have this deficiency -- when presented with two conflicting chains, the one with the highest cumulative PoW is the "true" chain.
> At this point, I'm going to just suggest learning more about how the system actually works. A good starting point is these papers:
I've read both, and there's nothing special about them that invalidates anything I've written above.
The points I raised in this thread are distributed systems 101 material. Maybe the Ethereum team should pick up a textbook.
Ah, well if a PoW chain, let's say Bitcoin, relies entirely on hashpower and not at all on social consensus, then I have an attack. First I accumulate >51% hashpower. Then I run my own hard fork which awards 10X block rewards to all blocks produced by me. It also makes all transactions valid if signed by me, so I fill my blocks with transactions taxing 10% from other addresses. I post my forked code on github and tell everybody it's an upgrade.
Eventually people buy and set up enough hardware to get me below 51%. They won't like my chain and their old software won't consider it valid, but so what? Bitcoin doesn't rely on social consensus so opinions are irrelevant. My chain has the most accumulated work. Until other miners catch the old chain up to mine, I control the real Bitcoin.
Or maybe everybody would ignore my rule-breaking chain because Bitcoin relies on social consensus after all.
Eventually people buy and set up enough hardware to get me below 51%. They won't like my chain and their old software won't consider it valid, but so what? Bitcoin doesn't rely on social consensus so opinions are irrelevant. My chain has the most accumulated work. Until other miners catch the old chain up to mine, I control the real Bitcoin.
Or maybe everybody would ignore my rule-breaking chain because Bitcoin relies on social consensus after all.
> Then I run my own hard fork which awards 10X block rewards to all blocks produced by me.
Since your blocks violate my and everyone else's nodes' block validation rules, which among other things stipulate a fixed minting schedule (which you did not adhere to), your blocks are never accepted -- they are treated as invalid and dropped. QED your attack fails.
I honestly thought you knew better before I saw your reply.
> I post my forked code on github and tell everybody it's an upgrade.
Since I'm intending to install "Bitcoin," it is a reasonable assumption that I know what "Bitcoin" is. So, it's possible for me to read your code, and determine that it is, in fact, not Bitcoin, because it does not have the same minting schedule.
Note that knowing that the software I'm running adheres to the rules that make up "Bitcoin" is sufficient for me to bootstrap my node and validate the Bitcoin chain, assuming I am able to connect any/all public Bitcoin nodes (regardless of which fork they see). Even if I join the network while the network is partitioned, my node will eventually determine which of the partitions' forks is the canonical fork all by itself, because the rules of Bitcoin stipulate that the valid chainstate with the highest cumulative PoW is the canonical fork.
However, this is not sufficient for PoS, because in PoS, someone must also tell me out of band which fork is the canonical PoS chain, should the network ever partition into two competing networks. This is because there is no way to examine the chainstate itself and determine which conflicting PoS fork is the canonical fork, even if I can reach all public PoS nodes for all forks. Each partition can plausibly claim that the other fork was rightfully slashed for being offline for a time before my node joined. Because I didn't personally see the offline behavior, I have no way of knowing which partition to trust, if any -- someone who was there to see it must tell me. That's "weak subjectivity" for you.
Since your blocks violate my and everyone else's nodes' block validation rules, which among other things stipulate a fixed minting schedule (which you did not adhere to), your blocks are never accepted -- they are treated as invalid and dropped. QED your attack fails.
I honestly thought you knew better before I saw your reply.
> I post my forked code on github and tell everybody it's an upgrade.
Since I'm intending to install "Bitcoin," it is a reasonable assumption that I know what "Bitcoin" is. So, it's possible for me to read your code, and determine that it is, in fact, not Bitcoin, because it does not have the same minting schedule.
Note that knowing that the software I'm running adheres to the rules that make up "Bitcoin" is sufficient for me to bootstrap my node and validate the Bitcoin chain, assuming I am able to connect any/all public Bitcoin nodes (regardless of which fork they see). Even if I join the network while the network is partitioned, my node will eventually determine which of the partitions' forks is the canonical fork all by itself, because the rules of Bitcoin stipulate that the valid chainstate with the highest cumulative PoW is the canonical fork.
However, this is not sufficient for PoS, because in PoS, someone must also tell me out of band which fork is the canonical PoS chain, should the network ever partition into two competing networks. This is because there is no way to examine the chainstate itself and determine which conflicting PoS fork is the canonical fork, even if I can reach all public PoS nodes for all forks. Each partition can plausibly claim that the other fork was rightfully slashed for being offline for a time before my node joined. Because I didn't personally see the offline behavior, I have no way of knowing which partition to trust, if any -- someone who was there to see it must tell me. That's "weak subjectivity" for you.
Everything you described about Bitcoin is social consensus on the rules of the game. That consensus changes with any hard fork. Whether that consensus includes a block hash is a detail.
Thank you for this interesting comment. Are there any places on the internet where you can find worthwhile discussions about this stuff?
Who gets rich when people buy the “coin”?
This is one story you won't see show up on toxic-Bitcoin-Bro-loving Slashdot.
Why wait for ETH when we already have a better sustainable currency, more secure and which supports ETH contracts out of the box? Avalanche.
network effects. integrations. ecosystems. its why any big consumer app isn't easily displaced.
Same can be said why ETH PoW wont be displaced. Too much is already invested in it. Move to a different project altogether, if you want a sustainable future.
Ethereum has hard-forked a couple times a year since inception, carrying the ecosystem along with it. Switching to PoS is just another fork.
> Validators don’t need energy-intensive computers in order to participate in a proof-of-stake system – just a laptop or smart phone. This will make Ethereum better for the environment.
To me, this is the biggest win of proof-of-stake over proof-of-work.