Cryptocurrency Blockchains Don’t Need to Be Energy Intensive(spectrum.ieee.org)
spectrum.ieee.org
Cryptocurrency Blockchains Don’t Need to Be Energy Intensive
https://spectrum.ieee.org/computing/networks/cryptocurrency-blockchains-dont-need-to-be-energy-intensive
288 comments
To include the whole passage you are talking about:
> The granddaddy of all consensus mechanisms—behind Bitcoin, Litecoin, Monero, and (for the time being at least) Ethereum—is called proof of work. Essentially, PoW makes adding transactions to the blockchain computationally—and therefore financially—very expensive, so as to discourage fraudulent activity. At the same time, users who go to the trouble of creating valid blocks, known as mining, are rewarded with cryptocurrency.
I would say this passage gets the facts totally correct. The author doesn't say that Proof-of-work has to do with the validity of transactions, they say it has to do with the validity of blocks.
Indeed, it can't be easy to make valid blocks or double spending would become a problem as you say. Not sure why you think this reflects the misunderstanding of the inherent costs of consensus systems.
> The granddaddy of all consensus mechanisms—behind Bitcoin, Litecoin, Monero, and (for the time being at least) Ethereum—is called proof of work. Essentially, PoW makes adding transactions to the blockchain computationally—and therefore financially—very expensive, so as to discourage fraudulent activity. At the same time, users who go to the trouble of creating valid blocks, known as mining, are rewarded with cryptocurrency.
I would say this passage gets the facts totally correct. The author doesn't say that Proof-of-work has to do with the validity of transactions, they say it has to do with the validity of blocks.
Indeed, it can't be easy to make valid blocks or double spending would become a problem as you say. Not sure why you think this reflects the misunderstanding of the inherent costs of consensus systems.
Yes and no. Yes, proof of works prevents double spending or more generally establishes consensus on which transaction become accepted. But no, this could be achieved with many different consensus protocol and does in general not require any irrecoverable loss. Just issue a key pair to each human and make them send signed votes to establish consensus by simple majority.
The true reason something like proof of work is required is because the system is also anonymous and distributed where being anonymous is the more critical aspect. Because of that you can not know who is out there and can cast a vote. Are this votes from a million legitimate users or did one user just send a million votes? The solution to prevent users from casting arbitrary many votes is then to make it hard for them to cast a vote, you make them for example waste a lot of clock cycles for each vote.
But, as I said, not because this is inherently a requirement but because you want to establish consensus among members of an anonymous group of unknown size and them wasting a certain number of clock cycles is a rough proxy for everyone gets one vote assuming that everyone has very roughly access to the same amount of computing power.
The true reason something like proof of work is required is because the system is also anonymous and distributed where being anonymous is the more critical aspect. Because of that you can not know who is out there and can cast a vote. Are this votes from a million legitimate users or did one user just send a million votes? The solution to prevent users from casting arbitrary many votes is then to make it hard for them to cast a vote, you make them for example waste a lot of clock cycles for each vote.
But, as I said, not because this is inherently a requirement but because you want to establish consensus among members of an anonymous group of unknown size and them wasting a certain number of clock cycles is a rough proxy for everyone gets one vote assuming that everyone has very roughly access to the same amount of computing power.
For context, this is usually known as a 'Sybil attack'.
[1] https://en.wikipedia.org/wiki/Sybil_attack
[1] https://en.wikipedia.org/wiki/Sybil_attack
This is a common mistake w/r/t Proof of Work. It doesn't prevent Sybil attacks. The Bitcoin whitepaper performs slight of hand to say "instead of identities, we'll use CPUs" which are obviously what Sybil attacks are in the first place. One person can own lots of CPUs... (Thus mining operations.)
What it does do is make Sybilers larger and larger shareholders in the network to make it so that the more you Sybil the network the less you'd want to try to damage it.
What it does do is make Sybilers larger and larger shareholders in the network to make it so that the more you Sybil the network the less you'd want to try to damage it.
If you have a central entity that can generate key pairs then they may as well be running a database. It doesnt achieve decentralisation at all. It has nothing to do with anonymity: anything based on identity is broken because it has an entity that can fake those identities -- you can't verify ID with code
I don't get it.
Suppose a bad actor tries to double spend. They have to cryptographically sign both transactions, so the whole network will eventually receive knowledge of both transactions.
Why can't the network simply wait for some duration of time before accepting a transaction, to verify that no double-spends propagate from elsewhere?
If double spending is ever detected from a party, that party is dis-trusted by the network. The network will de-prioritize processing transactions from dis-trusted parties. Problem solved?
Suppose a bad actor tries to double spend. They have to cryptographically sign both transactions, so the whole network will eventually receive knowledge of both transactions.
Why can't the network simply wait for some duration of time before accepting a transaction, to verify that no double-spends propagate from elsewhere?
If double spending is ever detected from a party, that party is dis-trusted by the network. The network will de-prioritize processing transactions from dis-trusted parties. Problem solved?
There are two solutions you're proposing, each of which has problems:
1. You're introducing a requirement that all parties who wish to participate in the network must have diverse connections to the network. In practice many nodes do not meet this requirement. If a new node connects to only a few nodes, those nodes may return conflicting chains. With PoW, a longer chain has significantly more computational effort behind it even if it's only ahead by one or two blocks, so it's easy to prove that the longer chain is the valid one. On PoS, there's no such limitation, and a time limitation doesn't really address the issue (see On Stake and Consensus[1] for a more detailed explanation). Vitalik Buterin calls this "weak subjectivity"[2].
2. Introducing a concept of "dis-trusting". The implementation of this in practice is "slashing", but it doesn't work: I can participate as a legitimate actor in the network, transfer my coins to another address, and then use my original, "trusted" address to validate a chain of blocks which include spends not included in the consensus chain. A new entrant to the network, having no knowledge of the consensus chain, might receive the consensus chain and my malicious chain, and have no way of ascertaining which chain is valid: the consensus chain shows me unstaking and spending my coins, but my chain shows me continuing to stake and holding on to my coins.
[1] https://download.wpsoftware.net/bitcoin/pos.pdf
[2] https://vitalik.ca/general/2020/11/06/pos2020.html
1. You're introducing a requirement that all parties who wish to participate in the network must have diverse connections to the network. In practice many nodes do not meet this requirement. If a new node connects to only a few nodes, those nodes may return conflicting chains. With PoW, a longer chain has significantly more computational effort behind it even if it's only ahead by one or two blocks, so it's easy to prove that the longer chain is the valid one. On PoS, there's no such limitation, and a time limitation doesn't really address the issue (see On Stake and Consensus[1] for a more detailed explanation). Vitalik Buterin calls this "weak subjectivity"[2].
2. Introducing a concept of "dis-trusting". The implementation of this in practice is "slashing", but it doesn't work: I can participate as a legitimate actor in the network, transfer my coins to another address, and then use my original, "trusted" address to validate a chain of blocks which include spends not included in the consensus chain. A new entrant to the network, having no knowledge of the consensus chain, might receive the consensus chain and my malicious chain, and have no way of ascertaining which chain is valid: the consensus chain shows me unstaking and spending my coins, but my chain shows me continuing to stake and holding on to my coins.
[1] https://download.wpsoftware.net/bitcoin/pos.pdf
[2] https://vitalik.ca/general/2020/11/06/pos2020.html
> On PoS, there's no such limitation
There is no significant computational effort needed, but it is incorrect to say that PoS protocols do not limit the number of blocks that can be created. Most PoS systems do in fact have such a limitation.
There is no significant computational effort needed, but it is incorrect to say that PoS protocols do not limit the number of blocks that can be created. Most PoS systems do in fact have such a limitation.
Not one that can be verified by looking at the chain.
I encourage you to read the first paper I linked, instead of continuing to respond to parts of my posts out of context.
I encourage you to read the first paper I linked, instead of continuing to respond to parts of my posts out of context.
> transfer my coins to another address, and then use my original, "trusted" address to validate a chain of blocks
Any new entrant would be able to clearly see the transaction on one of the chains and from that can determine that the chain not containing that transaction but instead using that output to mint blocks is the cheating block chain. Your attack wouldn't work.
Any new entrant would be able to clearly see the transaction on one of the chains and from that can determine that the chain not containing that transaction but instead using that output to mint blocks is the cheating block chain. Your attack wouldn't work.
An attacker only needs to fool the network for a short amount of time -- e.g. to double-spend someone. It doesn't matter to the attacker that they are eventually discovered; what matters is that they can get away with it before getting caught.
Again, that's simply not true. Let's go through the hypothetical attack:
1. The attacker accumulates some coin then spends it / sells it. 2. The attacker starts building a chain using their old keys 3. The attacker presents this chain to a new entrant that they've eclipsed 4. The attacker buys something from the eclipsed victim
Any self respecting PoS protocol would have long cooldowns that would force step 1 and step 2 to be pretty far apart (on the order of months). In step 3, a fake chain would not fool new entrants because the new chain would be growing at a much slower rate than expected (because only the attacker is building on top of it). So there's two reasons that the attack wouldn't work here.
1. The attacker accumulates some coin then spends it / sells it. 2. The attacker starts building a chain using their old keys 3. The attacker presents this chain to a new entrant that they've eclipsed 4. The attacker buys something from the eclipsed victim
Any self respecting PoS protocol would have long cooldowns that would force step 1 and step 2 to be pretty far apart (on the order of months). In step 3, a fake chain would not fool new entrants because the new chain would be growing at a much slower rate than expected (because only the attacker is building on top of it). So there's two reasons that the attack wouldn't work here.
1. The fact that 1 and 2 are far apart is irrelevant to nodes that were absent for the two steps. It's true that this requires a long absence, but given many people disconnect cold storage wallets for years, we can't rely on this for security. Indeed, the time when you most need to be able to distinguish between real and fake chains (because your cold storage wallets are likely to be your most valuable) is when your proposed solution doesn't work.
2. That's simply incorrect, and I'm quite unsure why you think that. Proof of Work is the thing that slows down the creation of blockchains: a PoS attacker who creates a blockchain can emit blocks at a very high rate. The fact that they are the only validator doesn't slow them in any way.
2. That's simply incorrect, and I'm quite unsure why you think that. Proof of Work is the thing that slows down the creation of blockchains: a PoS attacker who creates a blockchain can emit blocks at a very high rate. The fact that they are the only validator doesn't slow them in any way.
> many people disconnect cold storage wallets for years
Yes, and when they come back, they should update their software - which should have a hardcoded checkpoint in it from much more recently. That's the solution that you're repeatedly ignoring.
> a PoS attacker who creates a blockchain can emit blocks at a very high rate
You're just wrong. Show me a single active PoS protocol that works this way. You won't be able to because that's not how it works. No one else would accept most of these blocks. Why are you so sure about yourself when you clearly have enormous holes in your understanding of how PoS protocols work in general?
Yes, and when they come back, they should update their software - which should have a hardcoded checkpoint in it from much more recently. That's the solution that you're repeatedly ignoring.
> a PoS attacker who creates a blockchain can emit blocks at a very high rate
You're just wrong. Show me a single active PoS protocol that works this way. You won't be able to because that's not how it works. No one else would accept most of these blocks. Why are you so sure about yourself when you clearly have enormous holes in your understanding of how PoS protocols work in general?
> Yes, and when they come back, they should update their software - which should have a hardcoded checkpoint in it from much more recently. That's the solution that you're repeatedly ignoring.
Setting aside for a moment the fact that users cannot be relied upon to update software, do you understand how this isn't a decentralized, trustless solution? If you're willing to download a checkpoint from a trusted, centralized entity, why even bother with decentralization? Why not just have the US Government sign blocks?
> You're just wrong. Show me a single active PoS protocol that works this way. You won't be able to because that's not how it works. No one else would accept most of these blocks.
Well, let's start with Cardano, Polkadot, or Tezos. Yes, all of these chains enforce a delay between blocks: the way they enforce that is that no one accepts blocks before they're supposed to, i.e. consensus.
...which is completely useless when you're entering the network and receive two conflicting blockchains, because you have no way of verifying when any of the blocks were validated. Consensus doesn't help you, because you don't know what the consensus is.
Show me a single mechanism in existence that can allow me to look at two blockchains and reject one based on the fact that the blocks were mined too quickly. Hint: it exists, but you're not going to like what it is!
Setting aside for a moment the fact that users cannot be relied upon to update software, do you understand how this isn't a decentralized, trustless solution? If you're willing to download a checkpoint from a trusted, centralized entity, why even bother with decentralization? Why not just have the US Government sign blocks?
> You're just wrong. Show me a single active PoS protocol that works this way. You won't be able to because that's not how it works. No one else would accept most of these blocks.
Well, let's start with Cardano, Polkadot, or Tezos. Yes, all of these chains enforce a delay between blocks: the way they enforce that is that no one accepts blocks before they're supposed to, i.e. consensus.
...which is completely useless when you're entering the network and receive two conflicting blockchains, because you have no way of verifying when any of the blocks were validated. Consensus doesn't help you, because you don't know what the consensus is.
Show me a single mechanism in existence that can allow me to look at two blockchains and reject one based on the fact that the blocks were mined too quickly. Hint: it exists, but you're not going to like what it is!
> users cannot be relied upon to update software
Their software can be relied on to tell them when its too out of date to be used.
> this isn't a decentralized, trustless solution
It is in fact decentralized. Nothing is trustless, but it is in fact just as trust-minimized as bitcoin is.
> If you're willing to download a checkpoint from a trusted, centralized entity, why even bother with decentralization? Why not just have the US Government sign blocks?
So many false assumptions in there. You know what they say about making assumptions don't you?
What really bothers me is that you just assert that what I'm talking about is broken without even attempting to understand what I'm talking about. You don't seem to care about actually having a conversation, but instead just want to win. I don't appreciate that. If you want to keep talking about this, I'd like you to ask me some questions that clarify your understanding of what I'm talking about and show me you're actually trying to understand me instead of just trying to take the most attackable misunderstanding of my words and attack that. I'm getting very frustrated at you because of your willful misunderstanding, and unless you change your attitude, I'm just going to start ignoring you.
So go ahead, you want to talk about this? Ask me how I'm proposing these checkpoints work. Ask me how they're decentralized. Ask me how they're trust minimized. Instead of asserting things that aren't true based on false assumptions. I'll give you one more chance.
Their software can be relied on to tell them when its too out of date to be used.
> this isn't a decentralized, trustless solution
It is in fact decentralized. Nothing is trustless, but it is in fact just as trust-minimized as bitcoin is.
> If you're willing to download a checkpoint from a trusted, centralized entity, why even bother with decentralization? Why not just have the US Government sign blocks?
So many false assumptions in there. You know what they say about making assumptions don't you?
What really bothers me is that you just assert that what I'm talking about is broken without even attempting to understand what I'm talking about. You don't seem to care about actually having a conversation, but instead just want to win. I don't appreciate that. If you want to keep talking about this, I'd like you to ask me some questions that clarify your understanding of what I'm talking about and show me you're actually trying to understand me instead of just trying to take the most attackable misunderstanding of my words and attack that. I'm getting very frustrated at you because of your willful misunderstanding, and unless you change your attitude, I'm just going to start ignoring you.
So go ahead, you want to talk about this? Ask me how I'm proposing these checkpoints work. Ask me how they're decentralized. Ask me how they're trust minimized. Instead of asserting things that aren't true based on false assumptions. I'll give you one more chance.
Okay, how do the checkpoints work, and how are they decentralized?
Checkpoints would be hardcoded into the software (not downloaded dynamically from some centralized source). As such, the checkpoint would simply be a peer reviewed change to an open source codebase, just like anything else.
How is it decentralized? Anyone can create an independent codebase that implements the protocol. Anyone can review the code and raise the alarm to the community if the checkpoint isn't correct. Ideally there would be a number of independent implementations of the software, each with many devs and numerous reviewers. In addition to that, the previous version of the software could be used to automatically validate that the new software contains a checkpoint that matches the longest chain as seen by that software - and again, it can raise an alarm to the user if it doesn't match, who can alert the community.
Any change in bitcoin works like this. Changes are discussed, implemented, and reviewed by hundreds or thousands of people. Users need to find the correct software in some way. Generally they would use the internet to find the right software, hopefully cross checking multiple sources. They might ask their friends what software to run. Etc. But there is no math to find the right software - each person has to use their social network (and the internet) to figure out which software is "Bitcoin". Once they download the software, it can do the rest.
The same is true for a piece of software with a hardcoded checkpoint. There is no central source for the checkpoint. Everyone who is currently part of the network can validate that the checkpoint is correct. Many people will actually do it. It would be so easy to validate that it could be automatically reviewed by people's software (unlike most other codebase changes).
So in what way would a PoS checkpoint be different than bitcoin? As I've shown above, the checkpoint itself is just another piece of the code like any other code change. The difference is that the checkpoint would be necessary to do at some regular frequency (say once a year). By contrast, you could imagine a future where the core Bitcoin software has been frozen and has not changed for years - decades maybe. And one could expect to go offline for 10 years and still be able to bring up their software without updating it.
A PoS system would be slightly different. Because of the issues around short-range and long-range revisions, people who have been offline long enough should at very least download a new checkpoint (even if the rest of the software remains the same). The new checkpoint a user downloads should be recent enough that the chances of a short-range revision attack (eg a history attack) with sufficient accumulated minting power (or whatever your preferred alternative term is for "accumulated difficulty") is sufficiently unlikely. One new checkpoint per year would ensure that a user downloading the latest checkpoint is downloading a checkpoint no farther in the past than 1 year. This would require that a sufficient number of devs and reviewers get together to review and validate the released checkpoint to make the release sufficiently decentralized. This could realistically be structured so software checks this automatically and raises an alarm to the user if the new checkpoint doesn't match or if too much time goes by without a new checkpoint being released. Millions of people could realistically participate in that - anyone that runs a full node. Even anyone that runs a light node.
Furthermore, when a user does download a checkpoint, some users are going to be careless and download some malicious checkpoint. If they do, but they have honest software, the software can ask their connections if the new checkpoint matches up with them. If it doesn't, it can again raise an alarm to the user.
For a person with an old version of the software to get a malicious checkpoint without an automatic alarm being raised, they would have to either have a virus that changed the code of the software (at which point any software PoS or PoW is vulnerable), or they would have to be eclipsed by the attacker (connected to only attacker nodes) and the attacker must also have a way to sign the release (of the checkpoint) with the authors' signatures (which the software should also automatically check) and the attacker must have accumulated enough minting power (eg in old keys bought from people who have drained those addresses already) since the software last left the chain. The attacker can't simply create a brand new chain with a different genesis block - the software would raise an alarm about that.
For a new entrant to the system, there is a higher risk, but it is no higher than with Bitcoin. The new entrant must find and install the right software somehow, on a machine that isn't compromised. This wouldn't be different for PoS.
In summary:
A. Users who have been connected to the network all along can't be tricked by any kind of history attack.
B. Users who are newly connecting to the network simply need to download the correct software, as they need to do with bitcoin.
C. Users who have been connected to the network for a time, but left for a period of time, just need to (manually) download and (automatically) verify a checkpoint.
Item C is situtation that differs most from current Bitcoin. There is some additional possibility for an attack there, but it would still be extraordinarily difficult to pull off. In Bitcoin, there is no need to download any new data, and so there is no equivalent attack vector similar to tricking the user into accepting an invalid checkpoint. However, this attack would be very difficult (eclipse, key theft), cost a lot (buying old addresses with no coins currently in them), and has a pretty limited reward potential (only the possibility of attacking returning and new entrants they can eclipse). So yes, it is a trade off. I think its a good trade off to buy higher security against a 51% attack and lower fees.
Does this make it clearer how checkpoints can be decentralized?
How is it decentralized? Anyone can create an independent codebase that implements the protocol. Anyone can review the code and raise the alarm to the community if the checkpoint isn't correct. Ideally there would be a number of independent implementations of the software, each with many devs and numerous reviewers. In addition to that, the previous version of the software could be used to automatically validate that the new software contains a checkpoint that matches the longest chain as seen by that software - and again, it can raise an alarm to the user if it doesn't match, who can alert the community.
Any change in bitcoin works like this. Changes are discussed, implemented, and reviewed by hundreds or thousands of people. Users need to find the correct software in some way. Generally they would use the internet to find the right software, hopefully cross checking multiple sources. They might ask their friends what software to run. Etc. But there is no math to find the right software - each person has to use their social network (and the internet) to figure out which software is "Bitcoin". Once they download the software, it can do the rest.
The same is true for a piece of software with a hardcoded checkpoint. There is no central source for the checkpoint. Everyone who is currently part of the network can validate that the checkpoint is correct. Many people will actually do it. It would be so easy to validate that it could be automatically reviewed by people's software (unlike most other codebase changes).
So in what way would a PoS checkpoint be different than bitcoin? As I've shown above, the checkpoint itself is just another piece of the code like any other code change. The difference is that the checkpoint would be necessary to do at some regular frequency (say once a year). By contrast, you could imagine a future where the core Bitcoin software has been frozen and has not changed for years - decades maybe. And one could expect to go offline for 10 years and still be able to bring up their software without updating it.
A PoS system would be slightly different. Because of the issues around short-range and long-range revisions, people who have been offline long enough should at very least download a new checkpoint (even if the rest of the software remains the same). The new checkpoint a user downloads should be recent enough that the chances of a short-range revision attack (eg a history attack) with sufficient accumulated minting power (or whatever your preferred alternative term is for "accumulated difficulty") is sufficiently unlikely. One new checkpoint per year would ensure that a user downloading the latest checkpoint is downloading a checkpoint no farther in the past than 1 year. This would require that a sufficient number of devs and reviewers get together to review and validate the released checkpoint to make the release sufficiently decentralized. This could realistically be structured so software checks this automatically and raises an alarm to the user if the new checkpoint doesn't match or if too much time goes by without a new checkpoint being released. Millions of people could realistically participate in that - anyone that runs a full node. Even anyone that runs a light node.
Furthermore, when a user does download a checkpoint, some users are going to be careless and download some malicious checkpoint. If they do, but they have honest software, the software can ask their connections if the new checkpoint matches up with them. If it doesn't, it can again raise an alarm to the user.
For a person with an old version of the software to get a malicious checkpoint without an automatic alarm being raised, they would have to either have a virus that changed the code of the software (at which point any software PoS or PoW is vulnerable), or they would have to be eclipsed by the attacker (connected to only attacker nodes) and the attacker must also have a way to sign the release (of the checkpoint) with the authors' signatures (which the software should also automatically check) and the attacker must have accumulated enough minting power (eg in old keys bought from people who have drained those addresses already) since the software last left the chain. The attacker can't simply create a brand new chain with a different genesis block - the software would raise an alarm about that.
For a new entrant to the system, there is a higher risk, but it is no higher than with Bitcoin. The new entrant must find and install the right software somehow, on a machine that isn't compromised. This wouldn't be different for PoS.
In summary:
A. Users who have been connected to the network all along can't be tricked by any kind of history attack.
B. Users who are newly connecting to the network simply need to download the correct software, as they need to do with bitcoin.
C. Users who have been connected to the network for a time, but left for a period of time, just need to (manually) download and (automatically) verify a checkpoint.
Item C is situtation that differs most from current Bitcoin. There is some additional possibility for an attack there, but it would still be extraordinarily difficult to pull off. In Bitcoin, there is no need to download any new data, and so there is no equivalent attack vector similar to tricking the user into accepting an invalid checkpoint. However, this attack would be very difficult (eclipse, key theft), cost a lot (buying old addresses with no coins currently in them), and has a pretty limited reward potential (only the possibility of attacking returning and new entrants they can eclipse). So yes, it is a trade off. I think its a good trade off to buy higher security against a 51% attack and lower fees.
Does this make it clearer how checkpoints can be decentralized?
The unstaking transaction can be on both chains and it's irrelevant to the attack. What matters is that a history exists starting from a block validated by the cheating validator. The fork starts from before the unstaking transaction.
That's not a difficult thing to reason out, but you wouldn't have to reason it out if you had read the paper I linked.
That's not a difficult thing to reason out, but you wouldn't have to reason it out if you had read the paper I linked.
> The fork starts from before the unstaking transaction.
So what? The fork wouldn't be built on by anyone but the attacker. Any new entrant would have software that expects a blockchain being built substantially faster (or with substantially higher difficulty).
> you wouldn't have to reason it out if you had read the paper I linked.
I have read Peolstra's "pos.pdf" that PoS detractors incessently reference multiple times. The paper's conclusion is not correct. All the problems he presents are solvable at once (eg in this protocol: https://github.com/fresheneesz/validatedProofOfStake). He doesn't consider that hard coded checkpoints handily solve the problem of long-range revisions.
So what? The fork wouldn't be built on by anyone but the attacker. Any new entrant would have software that expects a blockchain being built substantially faster (or with substantially higher difficulty).
> you wouldn't have to reason it out if you had read the paper I linked.
I have read Peolstra's "pos.pdf" that PoS detractors incessently reference multiple times. The paper's conclusion is not correct. All the problems he presents are solvable at once (eg in this protocol: https://github.com/fresheneesz/validatedProofOfStake). He doesn't consider that hard coded checkpoints handily solve the problem of long-range revisions.
> Any new entrant would have software that expects a blockchain being built substantially faster (or with substantially higher difficulty).
"Difficulty" isn't a thing in PoS. Provable random functions that choose validators always have fallbacks, because if they didn't, a single absent validator would bring the entire chain to a halt.
Repeated fallbacks would look suspicious, so a smart attacker would simply neglect to include transactions from the real chain that transfer money or power away from addresses he controls, which would quickly lead to >50% ownership of the fake chain. It would be impossible to distinguish this on-chain from a real validator drop event (such as an AWS US1 East outage).
> He doesn't consider that hard coded checkpoints handily solve the problem of long-range revisions.
Hard-coded checkpoints do absolutely nothing to address this issue. If you're requiring that the checkpoints come from a trusted entity, you've just given up decentralization. If you're not requiring that they come from a trusted entity, then they can be spoofed just as easily as a block.
Instead of reading a paper and immediately believing what it says, you need to try to think like an attacker and see how you would try to get around the "solution". There's likely not a paper written on this, because it's so trivial to get around that it really doesn't require a paper to refute. The fact that you presented this idea non-ironically seriously undermines your credibility.
FWIW, I'm not a PoS detractor. I'm quite excited for Ethereum's implementation of PoS, because if anyone can solve the issues with PoS, it's the Ethereum team. My current thinking is very much in the "wait and see" camp.
Weak subjectivity with PoS is a real thing (if you don't believe me, perhaps you should listen to Vitalik Buterin, who cannot be accused of being a "PoS detractor"). What remains to be seen is how much of a problem it is in practice. The release of Ethereum 2.0 will be the largest full-scale test of a mature implementation, but depending on how quickly full roll-outs of PoS happens for Cardano or Polkadot happen, one of them may get there first.
"Difficulty" isn't a thing in PoS. Provable random functions that choose validators always have fallbacks, because if they didn't, a single absent validator would bring the entire chain to a halt.
Repeated fallbacks would look suspicious, so a smart attacker would simply neglect to include transactions from the real chain that transfer money or power away from addresses he controls, which would quickly lead to >50% ownership of the fake chain. It would be impossible to distinguish this on-chain from a real validator drop event (such as an AWS US1 East outage).
> He doesn't consider that hard coded checkpoints handily solve the problem of long-range revisions.
Hard-coded checkpoints do absolutely nothing to address this issue. If you're requiring that the checkpoints come from a trusted entity, you've just given up decentralization. If you're not requiring that they come from a trusted entity, then they can be spoofed just as easily as a block.
Instead of reading a paper and immediately believing what it says, you need to try to think like an attacker and see how you would try to get around the "solution". There's likely not a paper written on this, because it's so trivial to get around that it really doesn't require a paper to refute. The fact that you presented this idea non-ironically seriously undermines your credibility.
FWIW, I'm not a PoS detractor. I'm quite excited for Ethereum's implementation of PoS, because if anyone can solve the issues with PoS, it's the Ethereum team. My current thinking is very much in the "wait and see" camp.
Weak subjectivity with PoS is a real thing (if you don't believe me, perhaps you should listen to Vitalik Buterin, who cannot be accused of being a "PoS detractor"). What remains to be seen is how much of a problem it is in practice. The release of Ethereum 2.0 will be the largest full-scale test of a mature implementation, but depending on how quickly full roll-outs of PoS happens for Cardano or Polkadot happen, one of them may get there first.
> "Difficulty" isn't a thing in PoS
Yes it is. The more people with coins actively minting in the system, the higher the difficulty of getting chosen. Please do more research.
If you really want to keep discussing this with me, read through the WHOLE of https://github.com/fresheneesz/validatedProofOfStake and show me a full attack on it.
> FWIW, I'm not a PoS detractor.
You could have fooled me. But it sounds like you're saying you believe in Vitalik, and anyone else on the internet (ie me) must be idiots who can't understand solutions to these problems. Yet, you're not putting in the effort to understand the solutions out there. PoS protocols are more complex than PoW - there are more edge cases to shore up. So telling me you can "trivially" get around any particular solution ignores the fact that solutions work together. They aren't isolated. So slow down and actually try to understand a protocol holistically before attacking it. If you're not a detractor, than how about just trying to learn instead of insulting the intelligence of people who have actually worked on solutions to these problems?
Yes it is. The more people with coins actively minting in the system, the higher the difficulty of getting chosen. Please do more research.
If you really want to keep discussing this with me, read through the WHOLE of https://github.com/fresheneesz/validatedProofOfStake and show me a full attack on it.
> FWIW, I'm not a PoS detractor.
You could have fooled me. But it sounds like you're saying you believe in Vitalik, and anyone else on the internet (ie me) must be idiots who can't understand solutions to these problems. Yet, you're not putting in the effort to understand the solutions out there. PoS protocols are more complex than PoW - there are more edge cases to shore up. So telling me you can "trivially" get around any particular solution ignores the fact that solutions work together. They aren't isolated. So slow down and actually try to understand a protocol holistically before attacking it. If you're not a detractor, than how about just trying to learn instead of insulting the intelligence of people who have actually worked on solutions to these problems?
> Yes it is. The more people with coins actively minting in the system, the higher the difficulty of getting chosen.
I'm well aware. But eventually a large validator will get chosen--it's not difficult to get chosen, it's rare. The fact that PoS folks call this "difficulty" does not make it so.
> If you really want to keep discussing this with me, read through the WHOLE of https://github.com/fresheneesz/validatedProofOfStake and show me a full attack on it.
Given your proposed solution is checkpoints from a centralized trusted entity, you're giving up decentralization. Sure, your solution works. If you don't trust the source of the checkpoint, you're back to square one--it no longer works. And if you're willing to give up decentralization, may I suggest you just store all transactions in Postgres? You don't need a blockchain if you're just going to trust a centralized entity.
I'm not going to give your design a free audit. If there's some way this isn't centralized, feel free to explain, otherwise, this isn't relevant--I think we can assume that PoS is being discussed in the context of decentralized, trustless models.
> If you're not a detractor, than how about just trying to learn instead of insulting the intelligence of people who have actually worked on solutions to these problems?
I haven't insulted your intelligence. You're probably a smart guy. Which is probably why you're overconfident in your solution: smart people aren't used to being wrong, so you aren't taking the time to actually grok the attack I've already proposed, or why the only working solution you've actually proposed depends on centralization.
I did question your credibility to make claims here, because it's pretty clear you either don't understand the attack proposed by On Stake and Consensus, or you don't understand decentralization, which are both fundamental prerequisites to this discussion. The time constraints defense is literally in the paper, and the checkpoints solution you've proposed is just proof of authority by a different name. If you choose to feel insulted by someone saying you're wrong, that's your prerogative.
I'm well aware. But eventually a large validator will get chosen--it's not difficult to get chosen, it's rare. The fact that PoS folks call this "difficulty" does not make it so.
> If you really want to keep discussing this with me, read through the WHOLE of https://github.com/fresheneesz/validatedProofOfStake and show me a full attack on it.
Given your proposed solution is checkpoints from a centralized trusted entity, you're giving up decentralization. Sure, your solution works. If you don't trust the source of the checkpoint, you're back to square one--it no longer works. And if you're willing to give up decentralization, may I suggest you just store all transactions in Postgres? You don't need a blockchain if you're just going to trust a centralized entity.
I'm not going to give your design a free audit. If there's some way this isn't centralized, feel free to explain, otherwise, this isn't relevant--I think we can assume that PoS is being discussed in the context of decentralized, trustless models.
> If you're not a detractor, than how about just trying to learn instead of insulting the intelligence of people who have actually worked on solutions to these problems?
I haven't insulted your intelligence. You're probably a smart guy. Which is probably why you're overconfident in your solution: smart people aren't used to being wrong, so you aren't taking the time to actually grok the attack I've already proposed, or why the only working solution you've actually proposed depends on centralization.
I did question your credibility to make claims here, because it's pretty clear you either don't understand the attack proposed by On Stake and Consensus, or you don't understand decentralization, which are both fundamental prerequisites to this discussion. The time constraints defense is literally in the paper, and the checkpoints solution you've proposed is just proof of authority by a different name. If you choose to feel insulted by someone saying you're wrong, that's your prerogative.
Thank you for all your incredible input. I felt I grokked POW but I’ve been looking for concise introductions to PoS wrt double spending mechanisms and equivalents to 51% attacks. Thanks again for the depth.
I'm not going to continue this thread anymore. One is enough, and I'll try one more time to continue on your other comment. You are insulting me btw. I'm this close to following in your footsteps.
But how would someone know later which transaction is valid? Like, a new entrant to the network gets two transactions spending the same input, without a block chain to determine ordering of transactions, this new entrant wouldn't know which was actually spent. Both transactions could have subsequent spends, so that is also not a way to determine which is the one to follow. You can't decide to follow neither, because it's possible (even likely) that the person who owns those coins now was not the person who tried double spending them.
Well let's say we do things this way, and I double spend a transaction, sending one to Alice and one to Bob. Suppose Alice waits t seconds after receiving the transaction, and if she doesn't see any double spends in that time, she accepts that the coin is hers and she then sends me something in return.
One second before Alice "confirms" my transaction, I can send out my transaction to Bob. Since my message takes time to propagate through the network, it won't reach Alice soon enough and she will think I've paid her, and she'll send me whatever I was paying for. But other people will see both these transactions within t seconds of each other. They won't know which they should believe is correct, and they might not accept payment from Alice in the future.
One second before Alice "confirms" my transaction, I can send out my transaction to Bob. Since my message takes time to propagate through the network, it won't reach Alice soon enough and she will think I've paid her, and she'll send me whatever I was paying for. But other people will see both these transactions within t seconds of each other. They won't know which they should believe is correct, and they might not accept payment from Alice in the future.
The same thing happens in PoW networks. You have to wait several blocks to gain confidence that a transaction won't be reverted.
In Ethereum's PoS, by waiting a similar amount of time you actually get finality; at that point your transaction cannot be reverted without a third of total stake being destroyed.
In Ethereum's PoS, by waiting a similar amount of time you actually get finality; at that point your transaction cannot be reverted without a third of total stake being destroyed.
Yeah, good point. If the attacker knows how long each person will wait, then they can exploit that.
That's similar to what Ethereum's proof-of-stake does. Any staker can submit the two inconsistent transactions as proof of malfeasance by another staker. When that happens, the misbehaving staker is automatically "slashed," losing a portion of their stake.
The problem with waiting AFAIK is that it's vulnerable to attacks on the underlying peer-to-peer network.
Let's say you wait 1 hour to see whether there was a double spend. If an attacker wanted to, they could spend twice and somehow mess with the network for 1 hour.
For example, an attacker at the internet service provider could intercept packets from the Bitcoin network and just block the other spend transaction from getting to you. You wait 1 hour and consider the payment finalized, and you swap goods for Bitcoin.
Let's say you wait 1 hour to see whether there was a double spend. If an attacker wanted to, they could spend twice and somehow mess with the network for 1 hour.
For example, an attacker at the internet service provider could intercept packets from the Bitcoin network and just block the other spend transaction from getting to you. You wait 1 hour and consider the payment finalized, and you swap goods for Bitcoin.
Obvious fix, peg the time limit to measured network throughput.
There is no such thing as dis-trusted.
Bitcoin is "trustless". There is no trust of any form.
Bitcoin is "trustless". There is no trust of any form.
Public keys identify wallets. Key X tries to double spend, it is detected, proof propagates across network, nodes vote to insert into the consensus ledger a public record that key X has been "dis-trusted". The network thenceforth rejects transactions from wallet identified by key X.
Now key X has been dis-trusted.
Now key X has been dis-trusted.
They are not going to reuse a wallet for a second double spend attack.
PoW is not the only way to solve double spending (and make sure that the blocks are ordered in a particular timeline), in PoS it is solved by randomly choosing which validator will create the next block according to an algorithm that all the nodes follow. So there's no race to find the next block, the block producer is known in advance.
What's more, in PoS, you have guaranteed finality, meaning that after a certain amount of blocks, you can be sure that the order will not change. This is superior to the probabilistic finality offered by PoW.
> loses everything spent if the attack fails
They don't lose everything, they still get to keep the mining hardware and can retry the attack again. They can also use a "selfish mining" strategy and earn block rewards that subsidize their attack (by earning more than their fair share).
In PoS on the other hand, the attacker loses everything after an attack and cannot try again. This is because attackers get slashed (their stacked coins are destroyed). If they want to try again, they need to acquire more coins.
What's more, in PoS, you have guaranteed finality, meaning that after a certain amount of blocks, you can be sure that the order will not change. This is superior to the probabilistic finality offered by PoW.
> loses everything spent if the attack fails
They don't lose everything, they still get to keep the mining hardware and can retry the attack again. They can also use a "selfish mining" strategy and earn block rewards that subsidize their attack (by earning more than their fair share).
In PoS on the other hand, the attacker loses everything after an attack and cannot try again. This is because attackers get slashed (their stacked coins are destroyed). If they want to try again, they need to acquire more coins.
There are a bunch of ways in which you're not exactly correct here.
First, you're describing a very particular implementation of PoS. Not all PoS implementations include slashing. This isn't a mere technicality: the most popular implementation of PoS (as measured by market cap) is Cardano's and it doesn't include slashing. And not all PoS implementations involve randomly choosing a validator.
The bigger problem here is that proof of stake is actually a misnomer because doesn't actually provide proof, period--it's a consensus algorithm, not a proof algorithm. That's fine if you're actively connected to a bunch of nodes, because you can resolve double spends by polling the network to find out the consensus. But if you're only connected to two nodes and those two nodes are showing you two different spends of the same balance, you have no way to resolve that conflict. In PoW (a real proof algorithm) you simply look at the longer chain. In PoS, there's no way to actually enforce the longer chain, because there's no cost to producing a longer chain. This is a problem which occurs in practice when nodes newly connect to a network or reconnect after a long absence.
Slashing does nothing to address this issue. If I'm running a PoS validator node, I can stake coins, unstake them, and then spend the coins. Now I've got a free license to mine blocks without risk of slashing. I can mine blocks by simply validating blocks that say that I never unstaked. And I'm at no risk of slashing because I've already spent the coins: there's no balance to slash.
You alluded to an attempted solution with "it is solved by randomly choosing which validator will create the next block according to an algorithm that all the nodes follow" but that doesn't work: a provable random function can choose a validator which creates artificial scarcity, but there has to be a fallback in case validators drop offline, otherwise a downed node would grind the entire chain to a halt as soon as it was chosen as a validator and doesn't validate a block when it's supposed to. The malicious validator can use this because there's no temporality stored on-chain: you just find a situation where your staking address is the fallback node and claim that the validators who were chosen by the random function validated late, and nobody can prove you wrong. This may sound suspicious, but in fact these fallbacks happen in practice. To create a believable chain after this, you have to create a situation where a lot of validators drop off and are replaced by nodes you control. This also looks suspicious, but again this also happens in practice: for example if AWS S3 US East VA goes down, there will be a huge number of validators that drop offline.
Probably the most thorough explanation of this type of attack and the theory behind it can be found in On Stake and Consensus[1].
There's some debate on the importance of this attack--Vitalik Buterin calls this "weak subjectivity" and has written about it in length[2]. But to say he's not concerned about it would be inaccurate; he says, "actually implementing a proof of stake algorithm that is effective is proving to be surprisingly complex"[3]. That sentence was written in 2014 and Ethereum still does not rely on proof of stake in 2021--be assured that if in seven years Vitalik Buterin has not satisfactorily solved the problem, it's not trivial. I would caution anyone extolling the virtues of Proof of Stake from overstating their case--PoS is not a panacea and presents many challenges of its own.
[1] https://download.wpsoftware.net/bitcoin/pos.pdf
[2] https://blog.ethereum.org/2014/11/25/proof-stake-learned-lov...
[3] https://blog.ethereum.org/2014/10/03/slasher-ghost-developme...
First, you're describing a very particular implementation of PoS. Not all PoS implementations include slashing. This isn't a mere technicality: the most popular implementation of PoS (as measured by market cap) is Cardano's and it doesn't include slashing. And not all PoS implementations involve randomly choosing a validator.
The bigger problem here is that proof of stake is actually a misnomer because doesn't actually provide proof, period--it's a consensus algorithm, not a proof algorithm. That's fine if you're actively connected to a bunch of nodes, because you can resolve double spends by polling the network to find out the consensus. But if you're only connected to two nodes and those two nodes are showing you two different spends of the same balance, you have no way to resolve that conflict. In PoW (a real proof algorithm) you simply look at the longer chain. In PoS, there's no way to actually enforce the longer chain, because there's no cost to producing a longer chain. This is a problem which occurs in practice when nodes newly connect to a network or reconnect after a long absence.
Slashing does nothing to address this issue. If I'm running a PoS validator node, I can stake coins, unstake them, and then spend the coins. Now I've got a free license to mine blocks without risk of slashing. I can mine blocks by simply validating blocks that say that I never unstaked. And I'm at no risk of slashing because I've already spent the coins: there's no balance to slash.
You alluded to an attempted solution with "it is solved by randomly choosing which validator will create the next block according to an algorithm that all the nodes follow" but that doesn't work: a provable random function can choose a validator which creates artificial scarcity, but there has to be a fallback in case validators drop offline, otherwise a downed node would grind the entire chain to a halt as soon as it was chosen as a validator and doesn't validate a block when it's supposed to. The malicious validator can use this because there's no temporality stored on-chain: you just find a situation where your staking address is the fallback node and claim that the validators who were chosen by the random function validated late, and nobody can prove you wrong. This may sound suspicious, but in fact these fallbacks happen in practice. To create a believable chain after this, you have to create a situation where a lot of validators drop off and are replaced by nodes you control. This also looks suspicious, but again this also happens in practice: for example if AWS S3 US East VA goes down, there will be a huge number of validators that drop offline.
Probably the most thorough explanation of this type of attack and the theory behind it can be found in On Stake and Consensus[1].
There's some debate on the importance of this attack--Vitalik Buterin calls this "weak subjectivity" and has written about it in length[2]. But to say he's not concerned about it would be inaccurate; he says, "actually implementing a proof of stake algorithm that is effective is proving to be surprisingly complex"[3]. That sentence was written in 2014 and Ethereum still does not rely on proof of stake in 2021--be assured that if in seven years Vitalik Buterin has not satisfactorily solved the problem, it's not trivial. I would caution anyone extolling the virtues of Proof of Stake from overstating their case--PoS is not a panacea and presents many challenges of its own.
[1] https://download.wpsoftware.net/bitcoin/pos.pdf
[2] https://blog.ethereum.org/2014/11/25/proof-stake-learned-lov...
[3] https://blog.ethereum.org/2014/10/03/slasher-ghost-developme...
> I can stake coins, unstake them, and then spend the coins. Now I've got a free license to mine blocks without risk of slashing
Except you won't because you'll have to wait so long to be able to use the old coins that you'll miss the window of opportunity. Also, it doesn't matter because you need > 50% of the actively minting coins in order to succeed anyway. And if you had that, you don't need to worry about being slashed at all.
Except you won't because you'll have to wait so long to be able to use the old coins that you'll miss the window of opportunity. Also, it doesn't matter because you need > 50% of the actively minting coins in order to succeed anyway. And if you had that, you don't need to worry about being slashed at all.
> Except you won't because you'll have to wait so long to be able to use the old coins that you'll miss the window of opportunity.
What "window of opportunity"? Ostensibly these coins will remain valuable far into the future, and therefore the ability to spend them twice will also remain valuable.
> Also, it doesn't matter because you need > 50% of the actively minting coins in order to succeed anyway.
If you have the ability to mint blocks, you can use include signed transactions from the real chain to unstake and build majority on nodes you control.
I would discourage you from responding on this topic until you've read the first paper I linked, as you have not said anything that wasn't addressed in that paper.
What "window of opportunity"? Ostensibly these coins will remain valuable far into the future, and therefore the ability to spend them twice will also remain valuable.
> Also, it doesn't matter because you need > 50% of the actively minting coins in order to succeed anyway.
If you have the ability to mint blocks, you can use include signed transactions from the real chain to unstake and build majority on nodes you control.
I would discourage you from responding on this topic until you've read the first paper I linked, as you have not said anything that wasn't addressed in that paper.
> What "window of opportunity"?
The window of opportunity to use your old keys (with old coins) to create a malicious chain.
> If you have the ability to mint blocks, you can use include signed transactions from the real chain to unstake and build majority on nodes you control.
If the attacker is building their own chain, no one else will be building on top of it. Anyone will see that the chain has very few coins actively minting and will be immediately suspect, even if they're eclipsed. If they're not eclipsed, they'll go with the honest chain, which would be clearly longer unless this was a 51% attack situation.
>I would discourage you from responding on this topic
If you're going to be rude, I'm just going to ignore you. Its pretty insulting to tell me that. I've written two different consensus protocols, and analysed the security properties of many more. I very much doubt you've put anywhere near as much work into understanding the attacks and solutions around consensus protocols. So please don't be pompous.
The window of opportunity to use your old keys (with old coins) to create a malicious chain.
> If you have the ability to mint blocks, you can use include signed transactions from the real chain to unstake and build majority on nodes you control.
If the attacker is building their own chain, no one else will be building on top of it. Anyone will see that the chain has very few coins actively minting and will be immediately suspect, even if they're eclipsed. If they're not eclipsed, they'll go with the honest chain, which would be clearly longer unless this was a 51% attack situation.
>I would discourage you from responding on this topic
If you're going to be rude, I'm just going to ignore you. Its pretty insulting to tell me that. I've written two different consensus protocols, and analysed the security properties of many more. I very much doubt you've put anywhere near as much work into understanding the attacks and solutions around consensus protocols. So please don't be pompous.
How do you know you have the longest chain without having all the blocks? You need to reach consensus on which blocks exist, and you can't get that without talking to enough other nodes to be pretty sure you have enough blocks that a longer chain is unlikely.
When there is a network split, nodes on one side of the split might think they have the longest chain and be wrong about it. Unless you know you have most of the computing power on your side of the network split, you can't really know which side has the longest chain until the network split is over.
So no, Bitcoin doesn't avoid the need to achieve consensus.
When there is a network split, nodes on one side of the split might think they have the longest chain and be wrong about it. Unless you know you have most of the computing power on your side of the network split, you can't really know which side has the longest chain until the network split is over.
So no, Bitcoin doesn't avoid the need to achieve consensus.
Glad we've come to the conclusion that things I didn't say aren't true!
What I actually said is, "[I]f you're only connected to two nodes and those two nodes are showing you two different spends of the same balance, you have no way to resolve that conflict. In PoW (a real proof algorithm) you simply look at the longer chain."
You're correct that this isn't a proof of consensus.
What I actually said is, "[I]f you're only connected to two nodes and those two nodes are showing you two different spends of the same balance, you have no way to resolve that conflict. In PoW (a real proof algorithm) you simply look at the longer chain."
You're correct that this isn't a proof of consensus.
Fair enough. But looking at the longest chain you have (from the two nodes you can connect to) and assuming it's valid is not sufficient. You also need some reason to believe there isn't a longer chain out there. (In practice this is by waiting for a certain number of "confirmations.")
Maybe that's assumed in "simply look at the longer chain" but I thought I'd point it out.
Maybe that's assumed in "simply look at the longer chain" but I thought I'd point it out.
> you're describing a very particular implementation of PoS.
It's silly to say PoS doesn't work when what you really mean is that some badly designed PoS systems don't work. Slashing is a solution to a problem. It's honestly irrelevant if some PoS systems don't do slashing.
It's silly to say PoS doesn't work when what you really mean is that some badly designed PoS systems don't work. Slashing is a solution to a problem. It's honestly irrelevant if some PoS systems don't do slashing.
It's silly to respond to one particular claim in isolation, when I wrote a long post that addressed the limitations of slashing. Please don't respond to what I say out of context.
> The bigger problem here is that proof of stake is actually a misnomer because doesn't actually provide proof, period--it's a consensus algorithm, not a proof algorithm.
From peercoin (first pos coin) whitepaper: "Roughly speaking, proof-of-stake means a form of proof of ownership of the currency."
> But if you're only connected to two nodes and those two nodes are showing you two different spends of the same balance, you have no way to resolve that conflict. In PoW (a real proof algorithm) you simply look at the longer chain.
From the same whitepaper: "The protocol for determining which competing block chain wins as main chain has been switched over to use consumed coin age. Here every transaction in a block contributes its consumed coin age to the score of the block. The block chain with highest total consumed coin age is chosen as main chain."
I mean, looking at it it seems that your main complaints were actually addressed some 9 years ago in the first PoS whitepaper.
From peercoin (first pos coin) whitepaper: "Roughly speaking, proof-of-stake means a form of proof of ownership of the currency."
> But if you're only connected to two nodes and those two nodes are showing you two different spends of the same balance, you have no way to resolve that conflict. In PoW (a real proof algorithm) you simply look at the longer chain.
From the same whitepaper: "The protocol for determining which competing block chain wins as main chain has been switched over to use consumed coin age. Here every transaction in a block contributes its consumed coin age to the score of the block. The block chain with highest total consumed coin age is chosen as main chain."
I mean, looking at it it seems that your main complaints were actually addressed some 9 years ago in the first PoS whitepaper.
> From peercoin (first pos coin) whitepaper: "Roughly speaking, proof-of-stake means a form of proof of ownership of the currency."
Just because a whitepaper says something doesn't mean it's has held up to peer review.
> From the same whitepaper: "The protocol for determining which competing block chain wins as main chain has been switched over to use consumed coin age. Here every transaction in a block contributes its consumed coin age to the score of the block. The block chain with highest total consumed coin age is chosen as main chain."
Consumed coin age is not provable by looking at the chain--it's only provable by polling the network for consensus.
> I mean, looking at it it seems that your main complaints were actually addressed some 9 years ago in the first PoS whitepaper.
I mean, looking at it it seems you didn't read the first paper I linked, or indeed much of the literature on proof of stake which has been written in the last 9 years.
Just because a whitepaper says something doesn't mean it's has held up to peer review.
> From the same whitepaper: "The protocol for determining which competing block chain wins as main chain has been switched over to use consumed coin age. Here every transaction in a block contributes its consumed coin age to the score of the block. The block chain with highest total consumed coin age is chosen as main chain."
Consumed coin age is not provable by looking at the chain--it's only provable by polling the network for consensus.
> I mean, looking at it it seems that your main complaints were actually addressed some 9 years ago in the first PoS whitepaper.
I mean, looking at it it seems you didn't read the first paper I linked, or indeed much of the literature on proof of stake which has been written in the last 9 years.
> I can stake coins, unstake them, and then spend the coins. Now I've got a free license to mine blocks without risk of slashing.
Lol, you're a genius! Bwahahaha!
Lol, you're a genius! Bwahahaha!
What if an attacker’s goal is to see another validator get slashed?
That's a different type of attack. The attacker would need to compromise the validator's signing keys to do that. In crypto, if you have lost control to the signing keys then game over anway.
> The problem proof-of-work solves is double spending,
That doesn't seem to be my understanding. In my mind the problem proof of work solves is how quickly new blocks can be generated, thus limiting the supply of new blocks and giving an incentive to move the head pointer to an agreed upon next value (by granting coins to the miner who was able to compute the value).
Double spend is solved due to the single branch tree nature of the chain, since that block can validate that the coin hasn't been spent within that one block, nor in previous blocks (and side blocks can be ignored).
Proof of work has nothing to do with that, any system that can encourage everyone to agree on the next block does the same prevention of double spend.
That doesn't seem to be my understanding. In my mind the problem proof of work solves is how quickly new blocks can be generated, thus limiting the supply of new blocks and giving an incentive to move the head pointer to an agreed upon next value (by granting coins to the miner who was able to compute the value).
Double spend is solved due to the single branch tree nature of the chain, since that block can validate that the coin hasn't been spent within that one block, nor in previous blocks (and side blocks can be ignored).
Proof of work has nothing to do with that, any system that can encourage everyone to agree on the next block does the same prevention of double spend.
>Proof of work has nothing to do with that, any system that can encourage everyone to agree on the next block does the same prevention of double spend.
What foundational frame of reference are you using to write that sentence above?
Because for Bitcoin's specific implementation, the purpose of POW is to prevent double spend without centralized trust. Consider the following "if()" statement in bitcoin source code:
Excerpt from validation.cpp [1]:
>12. Conclusion : We have proposed a system for electronic transactions without relying on trust. We started with the usual framework of coins made from digital signatures, which provides strong control of ownership, but is incomplete without a way to prevent double-spending. To solve this, we proposed a peer-to-peer network using proof-of-work to record a public history of transactions that quickly becomes computationally impractical for an attacker to change if honest nodes control a majority of CPU power.
[1] https://github.com/bitcoin/bitcoin/blob/271155984574a5bba961...
[2] https://github.com/bitcoin/bitcoin/blob/40cd0369419323f8d738...
What foundational frame of reference are you using to write that sentence above?
Because for Bitcoin's specific implementation, the purpose of POW is to prevent double spend without centralized trust. Consider the following "if()" statement in bitcoin source code:
Excerpt from validation.cpp [1]:
bool CBlockIndexWorkComparator::operator()(const CBlockIndex *pa, const CBlockIndex *pb) const {
// First sort by most total work, ...
if (pa->nChainWork > pb->nChainWork) return false;
if (pa->nChainWork < pb->nChainWork) return true;
if (pindexNew->bnChainWork > bnBestChainWork)
{ ...
>12. Conclusion : We have proposed a system for electronic transactions without relying on trust. We started with the usual framework of coins made from digital signatures, which provides strong control of ownership, but is incomplete without a way to prevent double-spending. To solve this, we proposed a peer-to-peer network using proof-of-work to record a public history of transactions that quickly becomes computationally impractical for an attacker to change if honest nodes control a majority of CPU power.
[1] https://github.com/bitcoin/bitcoin/blob/271155984574a5bba961...
[2] https://github.com/bitcoin/bitcoin/blob/40cd0369419323f8d738...
In my mind the problem proof of work solves is how quickly new blocks can be generated [...]
There is actually no real point of rate limiting the creation of new blocks, why not generate them as fast as possible and therefore execute transactions as quickly as possible? This certainly needs some more thought, you do not want miners spamming empty blocks or blocks full of their own fake transactions, you can not provide a fixed block reward, and whatnot. But in general the mining rate limit is a limitation and not a feature.
Proof of work has nothing to do with that, any system that can encourage everyone to agree on the next block does the same prevention of double spend.
Sure, proof of work establishes consensus and any consensus algorithm could be used. But Bitcoin is anonymous, so you do not know how many parties are there that need to agree and therefore a simple vote based consensus protocol does not work. You have to prevent a malicious user from casting a million votes and changing the consensus branch as they please. How do you do that? You make casting a vote hard, you make them, for example, waste a lot of clock cycles to do so.
There is actually no real point of rate limiting the creation of new blocks, why not generate them as fast as possible and therefore execute transactions as quickly as possible? This certainly needs some more thought, you do not want miners spamming empty blocks or blocks full of their own fake transactions, you can not provide a fixed block reward, and whatnot. But in general the mining rate limit is a limitation and not a feature.
Proof of work has nothing to do with that, any system that can encourage everyone to agree on the next block does the same prevention of double spend.
Sure, proof of work establishes consensus and any consensus algorithm could be used. But Bitcoin is anonymous, so you do not know how many parties are there that need to agree and therefore a simple vote based consensus protocol does not work. You have to prevent a malicious user from casting a million votes and changing the consensus branch as they please. How do you do that? You make casting a vote hard, you make them, for example, waste a lot of clock cycles to do so.
> There is actually no real point of rate limiting the creation of new blocks…
To avoid fracturing the network and wasting significant amounts of work, the time between blocks needs to be much longer than the time it takes to propagate newly mined blocks to most of the nodes.
There are also concerns about the minimum amount of storage and bandwidth required to participate as a full node, and how that may drive increasing centralization. Storage can be mitigated somewhat with better pruning of old, spent transactions, but bandwidth is a harder problem facing any attempt to increase the core transaction rate.
To avoid fracturing the network and wasting significant amounts of work, the time between blocks needs to be much longer than the time it takes to propagate newly mined blocks to most of the nodes.
There are also concerns about the minimum amount of storage and bandwidth required to participate as a full node, and how that may drive increasing centralization. Storage can be mitigated somewhat with better pruning of old, spent transactions, but bandwidth is a harder problem facing any attempt to increase the core transaction rate.
> any scheme to replace proof-of-work needs to maintain that element of irrecoverable loss of value for a failed double spending attack.
As others have said, this is not true. All that is required is that it is expensive to successfully double spend.
As others have said, this is not true. All that is required is that it is expensive to successfully double spend.
More expensive than the value of the 2nd spend (in terms of expected value)?
Well, generally a 51% attack doesn't requier expending cost as much as it requires accumulating capital. With PoW, that capital is mining hardware. With PoS, that capital is the currency itself. In both PoW and PoS, a double spend could be done in a way that doesn't "cost" the attacker anything. But it does require accumulating so much capital that its hopefully extremely unlikely that any one person or group (even a government) could accumulate that much. An attack would generally substantially decrease the value of the capital accumulated (again, mining hardware or coins) and so there is a cost there. But it isn't the kind of thing where you can say "1 attack costs X dollars and 2 attacks costs 2X dollars", so the value of a particular double spend isn't really that relevant.
I would consider a double spend transaction to be invalid.
Which one was the first spend and which one was the double-spend?
You are talking about a distributed network where there is no universal time by which this can be measured.
The blockchain is the solution to this problem. It provides an ordering which is to be universally agreed upon, because the only way to disagree with the ordering is to use >51% of the amount of electricity securing the network to state your disagreement.
A spend is invalid if the consensus in the network is that the TXO being used as an input for a transaction has already been spent in a transaction which has been mined into a valid block. Until that happens, any valid transaction which spends a TXO may be the correct one.
You are talking about a distributed network where there is no universal time by which this can be measured.
The blockchain is the solution to this problem. It provides an ordering which is to be universally agreed upon, because the only way to disagree with the ordering is to use >51% of the amount of electricity securing the network to state your disagreement.
A spend is invalid if the consensus in the network is that the TXO being used as an input for a transaction has already been spent in a transaction which has been mined into a valid block. Until that happens, any valid transaction which spends a TXO may be the correct one.
> Which one was the first spend and which one was the double-spend?
The answer to that question is actually that it doesn't matter. Seems weird at first but if you think about it, no one who uses the system cares which one is "the first" the only thing people care about is that once one is picked it will not change later on aka finality. And for that a majority must agree on one. Which one again doesn't matter at all.
FBA (Federated Byzantine Agreement) "blockchains" make use of that. Each node signals which Tx it saw first but if no super-majority can be reached it simply switches to the Tx that has more votes. The sole purpose is to agree on one which makes the second Tx unfunded and thus fail.
Bitcoin and bitcoin-like system cant do this. They always have some kind of lottery that decides who writes the Tx. There is no agreement and thus no finality and that's the whole reason why double-spends can happen.
The answer to that question is actually that it doesn't matter. Seems weird at first but if you think about it, no one who uses the system cares which one is "the first" the only thing people care about is that once one is picked it will not change later on aka finality. And for that a majority must agree on one. Which one again doesn't matter at all.
FBA (Federated Byzantine Agreement) "blockchains" make use of that. Each node signals which Tx it saw first but if no super-majority can be reached it simply switches to the Tx that has more votes. The sole purpose is to agree on one which makes the second Tx unfunded and thus fail.
Bitcoin and bitcoin-like system cant do this. They always have some kind of lottery that decides who writes the Tx. There is no agreement and thus no finality and that's the whole reason why double-spends can happen.
I agree. It seems to me that pow is specifically designed to make adding new transactions to the blockchains take a certain amount of time. If anyone could add to the blockchain instantaneously, imagine the same account being used to spend money on both sides of the earth at the same "time". Afaik general relativity says it would be virtually impossible to tell which one happened "first" in a decentralized way. So by slowing everything down, we force there to be a window for transactions to propagate.
He did mention 51% attack which implies double spend.
Another way to describe this is that PoW is a Cybil resistance measure.
Although just saying that doesn't really tell anyone much, who doesn't already know.
A Sybil attack is the creation of a bunch of identities to subvert a system that is attempting to distribute power amongst a bunch of participants.
The Sybil resistance of these schemes comes from allocating power in proportion to some form of commitment of a scarce resource, which could be indigenous to the system (e.g. proof of stake, proof of burn) or exogenous (e.g. proof of work, proof of storage).
I think it's noteworthy that all of these systems are plutocratic. They will all effectively redistribute wealth upward, because anything that doesn't would encourage the creation of more identities.
A Sybil attack is the creation of a bunch of identities to subvert a system that is attempting to distribute power amongst a bunch of participants.
The Sybil resistance of these schemes comes from allocating power in proportion to some form of commitment of a scarce resource, which could be indigenous to the system (e.g. proof of stake, proof of burn) or exogenous (e.g. proof of work, proof of storage).
I think it's noteworthy that all of these systems are plutocratic. They will all effectively redistribute wealth upward, because anything that doesn't would encourage the creation of more identities.
Exactly. The current techniques to Sybil resistance directly leads to plutocracy because of economies of scale.
I think the solution is fees based on transaction expediency. If I want a transaction to go through for the minimum possible fee I could schedule it for a year in advance. In one years time, the money would be available. If I wanted it sooner, say instantly, that transaction would cost say, 1x. So if it was a $100 transaction, the fee would be $100. Maybe 1 day is 0.1x, 1 week is 0.01x and 1 month is .001x.
If you want the best odds of double spending and choose to pick instantly, the fee is equivalent to the transaction, so you don't actually end up gaining anything.
Smart merchants will start essentially doing futures. I am going to need corn in one year, I setup the deal today, when it goes onto the chain I transact my corn.
Better still, we can use these fees to add to the supply. The only reason that a transaction would go through with a fee is if the profit of the transaction from both sides was above 0, so we can directly track a portion of the surplus of our currency.
We can calculate how much security we need based on the available currency at a certain time, and mostly the miners only earn enough of the fees such that we can ensure that we won't be harmed by a malicious attacker who does not care that they aren't getting anything. So the difficulty is based not on mining power, but on exploitability.
So what do we do with the rest of the fees including the new coins generated through those fees? We give them to people who have actively locked up coins as we want to encourage people locking up their coins, as the more they have locked up, the less risk there is that a double spend can occur. So that means if you know that you will not transact your coins for one year, you will transact with yourself and lock in, and essentially you get yourself a CD.
This is all super preliminary, and I am looking for problems with this setup, but it seems to work.
I think the solution is fees based on transaction expediency. If I want a transaction to go through for the minimum possible fee I could schedule it for a year in advance. In one years time, the money would be available. If I wanted it sooner, say instantly, that transaction would cost say, 1x. So if it was a $100 transaction, the fee would be $100. Maybe 1 day is 0.1x, 1 week is 0.01x and 1 month is .001x.
If you want the best odds of double spending and choose to pick instantly, the fee is equivalent to the transaction, so you don't actually end up gaining anything.
Smart merchants will start essentially doing futures. I am going to need corn in one year, I setup the deal today, when it goes onto the chain I transact my corn.
Better still, we can use these fees to add to the supply. The only reason that a transaction would go through with a fee is if the profit of the transaction from both sides was above 0, so we can directly track a portion of the surplus of our currency.
We can calculate how much security we need based on the available currency at a certain time, and mostly the miners only earn enough of the fees such that we can ensure that we won't be harmed by a malicious attacker who does not care that they aren't getting anything. So the difficulty is based not on mining power, but on exploitability.
So what do we do with the rest of the fees including the new coins generated through those fees? We give them to people who have actively locked up coins as we want to encourage people locking up their coins, as the more they have locked up, the less risk there is that a double spend can occur. So that means if you know that you will not transact your coins for one year, you will transact with yourself and lock in, and essentially you get yourself a CD.
This is all super preliminary, and I am looking for problems with this setup, but it seems to work.
What I fail to understand, and thanks to your explanation, is why not use a central trusted ledger which would synchronize all transactions. It could surely work at the current speed of bitcoin and relieve the entire planet of the energy cost of bitcoin, providing the same safety that no double spend could happen.
All you'd need is a small private army, a few lawyers, an historically accepted jurisdiction, and you'd be ready to go with your central ledger.
I don't think you're right to say double spending is the only thing being solved with proof of work, I think people are trying very very very hard not to centralize (for no good reason in my opinion), despite the prohibitive cost, and why ? Because of that insane fear the ledgers would be changed: hence you'd have to admit the author was a bit right that eventually this whole story is to protect paranoid people against a very absurd risk at the cost of asking government to subsidize reopening coal mines...
All you'd need is a small private army, a few lawyers, an historically accepted jurisdiction, and you'd be ready to go with your central ledger.
I don't think you're right to say double spending is the only thing being solved with proof of work, I think people are trying very very very hard not to centralize (for no good reason in my opinion), despite the prohibitive cost, and why ? Because of that insane fear the ledgers would be changed: hence you'd have to admit the author was a bit right that eventually this whole story is to protect paranoid people against a very absurd risk at the cost of asking government to subsidize reopening coal mines...
This is called the state backed banking system.
Eventually they will make all your money digital. They will track everything you buy.
Then at the very least they will sell your information to advertisers, and at worst retain totalitarian control over all your purchasing power.
Its already happening in China - the state has the power to prevent people from travelling etc. based on their "social credit"
The US is making a CBDC (central bank digital currency). No matter how pure the intentions of creating a government backed digital currency are, it will degenerate into a means of control
Eventually they will make all your money digital. They will track everything you buy.
Then at the very least they will sell your information to advertisers, and at worst retain totalitarian control over all your purchasing power.
Its already happening in China - the state has the power to prevent people from travelling etc. based on their "social credit"
The US is making a CBDC (central bank digital currency). No matter how pure the intentions of creating a government backed digital currency are, it will degenerate into a means of control
> Eventually they will make all your money digital. They will track everything you buy.
Which is why Bitcoin starts out doing exactly that by default?
Which is why Bitcoin starts out doing exactly that by default?
If the central trusted ledger starts censoring transactions, blocking users or producing invalid blocks with additional rewards to themselves, then what? Just keep going with it and accept the new reality? Then we would be back at what we have now - the current central bank monetary system.
Trustless decentralized architecture makes the Bitcoin network incredibly robust against attacks on its principles. It can't be changed (without users/capital switching over to new version), stopped or censored by anyone.
Trustless decentralized architecture makes the Bitcoin network incredibly robust against attacks on its principles. It can't be changed (without users/capital switching over to new version), stopped or censored by anyone.
You mean like... paying using a card number (VISA, Mastercard, Amex) on the Internet?
I'm not really convinced.
Proof of Stake has a startup issue that Proof of Work doesn't have.
If you want to have your coin begin as proof of stake you have to have some mechanism for how the initial coins are distributed and that method is usually going to involve the creators giving themselves a lot of coins. A lot of crypto projects have all sorts of ways of obfuscating this or claiming that the intial coins will be destroyed or whatever, but I don't think that anyone has really succeeded in establishing trust on a large scale for this yet.
The other method of getting Proof of Stake going would be migrate an existing Proof of Work coin. This is like what Etherium 2.0 is trying to do.
The problem with that is that it's never going to be in the interest of the miners to actually change to it. Etherium 2.0 has been supposedly just around the corner for years and it never really arrives.
Proof of Work on the other hand doesn't have this issue. The creator has the same ability to mine coins as anyone else does, so it doesn't have the same initial trust issues as Proof of Stake does.
Proof of Stake has a startup issue that Proof of Work doesn't have.
If you want to have your coin begin as proof of stake you have to have some mechanism for how the initial coins are distributed and that method is usually going to involve the creators giving themselves a lot of coins. A lot of crypto projects have all sorts of ways of obfuscating this or claiming that the intial coins will be destroyed or whatever, but I don't think that anyone has really succeeded in establishing trust on a large scale for this yet.
The other method of getting Proof of Stake going would be migrate an existing Proof of Work coin. This is like what Etherium 2.0 is trying to do.
The problem with that is that it's never going to be in the interest of the miners to actually change to it. Etherium 2.0 has been supposedly just around the corner for years and it never really arrives.
Proof of Work on the other hand doesn't have this issue. The creator has the same ability to mine coins as anyone else does, so it doesn't have the same initial trust issues as Proof of Stake does.
PoS is a pretty broken system imo, it essentially codefies "rich gets richer" into the protocol. The biggest holders now control both the supply on the exchanges and the protocol itself. It creates all kinds of weird issues (for example, what happens if an attacker gets a hold of a significant percentage of the coins, now they also have a great control over the network). Stakers don't have the same pressure to sell their coins because they are not actively spending money on hardware and energy which makes the system more exclusionary over time.
I can go on and on. For all of it's problems, PoW is simple and just works. It ensures that there will be constant supply of coins for sale and ensures that nobody can just become richer because they started rich.
I can go on and on. For all of it's problems, PoW is simple and just works. It ensures that there will be constant supply of coins for sale and ensures that nobody can just become richer because they started rich.
> nobody can just become richer because they started rich
Right. In PoW, they need access to limited semiconductor supplies and cheap electricity. Which are two things that can be bought with...what was that stuff called...? Ah, yes: money! So PoW does just the same - the rich tend to get richer - but it adds the necessity to cause unnecessary environmental pollution on the scale of an entire country to it. Oh, and all the crypto holders pay collectively for that unnecessary "work". What a stroke of genius!
Right. In PoW, they need access to limited semiconductor supplies and cheap electricity. Which are two things that can be bought with...what was that stuff called...? Ah, yes: money! So PoW does just the same - the rich tend to get richer - but it adds the necessity to cause unnecessary environmental pollution on the scale of an entire country to it. Oh, and all the crypto holders pay collectively for that unnecessary "work". What a stroke of genius!
No, they are far from the same. It's true that BTC mining is capital intensive, yet it is highly competitive and risky, and most miners get a decent profit, yet need to sell the vast majority of mined coins to run their operation. Miners can never move on some parabolic increase of wealth as the very protocol itself prevents this.
Rather, we should look at holders. Bitcoin is fair in the sense that it does not have rich get richer built in.
If I'm rich and own 1,000 BTC whilst some poor slum has 0.001 BTC, neither of us has an advantage within the protocol. The rich person does not get free extra coins just for owning lots, nor do they have any additional say anywhere within the protocol.
With PoS, just having lots of money means you get free new money, as well as an extra say in the protocol itself.
Further, you should speak of electricity consumption combined with the energy mix. Electricity consumption does not automatically translate into pollution.
Rather, we should look at holders. Bitcoin is fair in the sense that it does not have rich get richer built in.
If I'm rich and own 1,000 BTC whilst some poor slum has 0.001 BTC, neither of us has an advantage within the protocol. The rich person does not get free extra coins just for owning lots, nor do they have any additional say anywhere within the protocol.
With PoS, just having lots of money means you get free new money, as well as an extra say in the protocol itself.
Further, you should speak of electricity consumption combined with the energy mix. Electricity consumption does not automatically translate into pollution.
> If I'm rich and own 1,000 BTC whilst some poor slum has 0.001 BTC, neither of us has an advantage within the protocol.
Why would we care about "advantage within the protocol" while ignoring the whole world around it? A similar absurd description is: one person is holding $1B in their hands, another is holding $1 - neither has more say about the money nor any advantage within the system as long as they don't spend it. It's true, but not very meaningful - we do things with money we own.
Why would we care about "advantage within the protocol" while ignoring the whole world around it? A similar absurd description is: one person is holding $1B in their hands, another is holding $1 - neither has more say about the money nor any advantage within the system as long as they don't spend it. It's true, but not very meaningful - we do things with money we own.
Because the protocol is software and only dictates rules inside its sphere of influence. It's a good rule that owning lots of coins does not automatically give you even more coins.
That rule does you no good if the net effect of the interplay of the rules with the rest of reality is that having more coins gives you more coins. This will be the case as long as coins can be used to purchase the means of production.
Having more coins as in Bitcoin does not give you more Bitcoin, but you're obviously right it buys more non-Bitcoin goods and services.
Bitcoin's premise is scarcity and software-enforced rules that are equal to all. It isn't going to "fairly" distribute existing capital, that should go without saying.
Bitcoin's premise is scarcity and software-enforced rules that are equal to all. It isn't going to "fairly" distribute existing capital, that should go without saying.
But with 1,000 BTC you can get more coins from within the system by buying lots of rigs with those 1,000 coins & hence mine more coins. So PoS and PoW are quite similar in that regard.
I think the problem with PoS is not "rich get richer" but the lack of fair redestribution. In PoW miners are economically forced to sell their mined coins to pay for energy bills. This redistribution is fair as it happens on the free market (exchanges). This doesn't really happen in PoS.
I think the problem with PoS is not "rich get richer" but the lack of fair redestribution. In PoW miners are economically forced to sell their mined coins to pay for energy bills. This redistribution is fair as it happens on the free market (exchanges). This doesn't really happen in PoS.
I wouldn't call that similar. Mining new Bitcoin is a very competitive, risky and intense business practice. Price swings greatly affect operations and there's always regulation around the corner.
Whereas staking is more like bringing fiat to the bank and collecting interest for doing nothing at all.
Still, you do have a point in the sense that if you're as wealthy as having 1,000 BTC, you have ample ways to further grow wealth. You could sell all BTC, go into real estate, take profit and buy back BTC cheaper. There's a million ways to grow your portfolio.
It's just that Bitcoin doesn't give you more Bitcoin based on wealth. Most Bitcoin held is not held by miners.
Whereas staking is more like bringing fiat to the bank and collecting interest for doing nothing at all.
Still, you do have a point in the sense that if you're as wealthy as having 1,000 BTC, you have ample ways to further grow wealth. You could sell all BTC, go into real estate, take profit and buy back BTC cheaper. There's a million ways to grow your portfolio.
It's just that Bitcoin doesn't give you more Bitcoin based on wealth. Most Bitcoin held is not held by miners.
I wouldn't say BTC is fair, but it is clearly fairer. With PoS coins, it is clear that minting new coins will heavily centralize for exchanges and big holders. With BTC, miners are clearly categorized as separate economic actor, where the skillset and capital needed to mint new coins is very different from let's say operating an exchange.
I have a feeling that there's far too much emphasis on mining from a wealth perspective. The vast majority of Bitcoin is owned by a few thousand whales combined with many millions of smaller holders.
There seems to be this narrative where some people believe miners are minting and then holding all the coins, getting ever richer, but this is plain false.
It would be true with PoS though, so agree.
There seems to be this narrative where some people believe miners are minting and then holding all the coins, getting ever richer, but this is plain false.
It would be true with PoS though, so agree.
That factor of “competitiveness” exists on Ethereum 2 as well. The more ether that is staked, the less the yield is from staking. If half of all ETH is staked, the APY will be below 2%, for instance. At a certain point bonds would overtake it.
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1. Including sarcasm in your post didn't achieve anything except to increase the reader's blood pressure and make people like you less. Let's keep this polite, please.
2. You're right that the rich get richer with PoW as well, but I think we can agree that the connection between existing wealth and increasing wealth is stronger with PoS--PoS is almost literally just a statement of "the rich get richer".
3. The "it adds the necessity to cause unnecessary environmental pollution" argument is simply incorrect. Much of existing mining is already done with renewable energy--it's the most cost-effective way to mine anyway in most cases.
2. You're right that the rich get richer with PoW as well, but I think we can agree that the connection between existing wealth and increasing wealth is stronger with PoS--PoS is almost literally just a statement of "the rich get richer".
3. The "it adds the necessity to cause unnecessary environmental pollution" argument is simply incorrect. Much of existing mining is already done with renewable energy--it's the most cost-effective way to mine anyway in most cases.
1. It helps get the point across just _how crazy_ this is. Sarcasm isn't only a tool to personally attack people - it's also a tool to verbally emphasize objectively valid arguments.
2. That's the beauty of it! We arrive at the same result, but just skip the part where people need to buy tons of custom silicon that can't do anything other than burn energy for mining, and then burn energy. That part has a lot of not-so-nice side effects on the real world out there, from silicon shortage to environmental pollution.
3. It is entirely correct. Even if some mining in some places is done with renewable energy (which is far from the majority - otherwise: please provide proof for your statement regarding just "how much" mining is renewable-based), that renewable energy is removed from the market and thus can't be used to power other consumers, which then must use fossil-fuel based energy sources. It's not like there's not enough demand for energy in the world, especially of the renewable kind.
2. That's the beauty of it! We arrive at the same result, but just skip the part where people need to buy tons of custom silicon that can't do anything other than burn energy for mining, and then burn energy. That part has a lot of not-so-nice side effects on the real world out there, from silicon shortage to environmental pollution.
3. It is entirely correct. Even if some mining in some places is done with renewable energy (which is far from the majority - otherwise: please provide proof for your statement regarding just "how much" mining is renewable-based), that renewable energy is removed from the market and thus can't be used to power other consumers, which then must use fossil-fuel based energy sources. It's not like there's not enough demand for energy in the world, especially of the renewable kind.
The second point is objectively wrong. PoW needs participants to spend capital in order to keep the organization running, thus not the rich get richer, but the more efficient get richer. PoS participants have no sell pressure and no way of being "better" than their peers, which is why it is incredibly broken.
In a PoW system you have fierce competition and the drive to the cheapest energy. Which today is stranded energy, that the market would never buy.
It is hard to estimate what percentage is truly renewable. The biggest source of energy was hydroelectric. It is estimated that during rain season the renewable percentage is up to 70%. However even if you look at the lowest estimate of renewable energy (~25%) you get double the percentage of the best country.
Bitcoin is the true solution to monetizing cheap energy production. It removes a large risk associated with investing in renewables as the network is a buyer of last resort. Thus you know that your energy always sees 100% usage (which is a big problem with grids today)
Just a small thought experiment. Lets assume you want to build a charging station for EVs powered by your own solar farm at a somewhat remote location. 4 hours of the day you have a peak consumption of 100 units, the rest you only have 80 units consumption. Moving energy over large distances is incredibly expensive. Having a buyer for your energy (Bitcoin network) means that the investment carries a lot less risk.
In a PoW system you have fierce competition and the drive to the cheapest energy. Which today is stranded energy, that the market would never buy.
It is hard to estimate what percentage is truly renewable. The biggest source of energy was hydroelectric. It is estimated that during rain season the renewable percentage is up to 70%. However even if you look at the lowest estimate of renewable energy (~25%) you get double the percentage of the best country.
Bitcoin is the true solution to monetizing cheap energy production. It removes a large risk associated with investing in renewables as the network is a buyer of last resort. Thus you know that your energy always sees 100% usage (which is a big problem with grids today)
Just a small thought experiment. Lets assume you want to build a charging station for EVs powered by your own solar farm at a somewhat remote location. 4 hours of the day you have a peak consumption of 100 units, the rest you only have 80 units consumption. Moving energy over large distances is incredibly expensive. Having a buyer for your energy (Bitcoin network) means that the investment carries a lot less risk.
1. People are more likely to recognize they're wrong if you don't also call them crazy.
2. Uh, okay.
3. You've significantly adjusted your statement from "it adds the necessity to cause unnecessary environmental pollution", which remains incorrect.
> (please provide proof for your statement regarding just "how much" mining is renewable-based)
I don't need to provide proof for things I didn't say.
Keep in mind that proof of stake as a trustless consensus mechanism is largely hypothetical at this point. All the major "live" implementations (Polkadot, Cardano, Tezos) have large numbers of trusted validators.
We agree that carbon emissions and other pollution are a problem. What we don't agree on is the solution to that problem.
> [R]enewable energy is removed from the market and thus can't be used to power other consumers, which then must use fossil-fuel based energy sources. It's not like there's not enough demand for energy in the world, especially of the renewable kind.
Wrong. The energy that's cheap enough to make mining profitable is cheap because nobody else wants it. In extreme cases, electricity produced in ghost cities in China will literally be dumped into the ground if it's not used by miners. It takes very little competition from consumers to make mining unprofitable.
2. Uh, okay.
3. You've significantly adjusted your statement from "it adds the necessity to cause unnecessary environmental pollution", which remains incorrect.
> (please provide proof for your statement regarding just "how much" mining is renewable-based)
I don't need to provide proof for things I didn't say.
Keep in mind that proof of stake as a trustless consensus mechanism is largely hypothetical at this point. All the major "live" implementations (Polkadot, Cardano, Tezos) have large numbers of trusted validators.
We agree that carbon emissions and other pollution are a problem. What we don't agree on is the solution to that problem.
> [R]enewable energy is removed from the market and thus can't be used to power other consumers, which then must use fossil-fuel based energy sources. It's not like there's not enough demand for energy in the world, especially of the renewable kind.
Wrong. The energy that's cheap enough to make mining profitable is cheap because nobody else wants it. In extreme cases, electricity produced in ghost cities in China will literally be dumped into the ground if it's not used by miners. It takes very little competition from consumers to make mining unprofitable.
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Re 3), there is not anywhere near enough renewable energy to go around to phase out fossils is there? So make Bitcoin harmless you would have to postulate:
- The energy could not have been transferred to reduce use of fossils
- The energy could not have been stored to reduce use of fossils
- Production of other, more necessary goods (batteries, aluminum, datacenters serving humanity in better ways) could not have been moved to the source of clean energy
- The energy could not have been transferred to reduce use of fossils
- The energy could not have been stored to reduce use of fossils
- Production of other, more necessary goods (batteries, aluminum, datacenters serving humanity in better ways) could not have been moved to the source of clean energy
Energy is not a fungible resource. Energy produced by hydroelectric plants in ghost cities in China is not useful for other purposes.
To be clear, I'm not saying that all or even the majority of energy used to mine cryptocurrency is currently renewable. I have no idea what the current state of things is. What I'm saying is that if we're looking to solve the problem of cryptocurrencies producing carbon and other emissions, using renewable energy is arguably just viable a solution as PoS, without some of the security problems that PoS has.
I do know that some Bitcoin mining operations are investing heavily in renewables, and given the cost of fossil fuels, I suspect that will give them a significant advantage in the long run.
To be clear, I'm not saying that all or even the majority of energy used to mine cryptocurrency is currently renewable. I have no idea what the current state of things is. What I'm saying is that if we're looking to solve the problem of cryptocurrencies producing carbon and other emissions, using renewable energy is arguably just viable a solution as PoS, without some of the security problems that PoS has.
I do know that some Bitcoin mining operations are investing heavily in renewables, and given the cost of fossil fuels, I suspect that will give them a significant advantage in the long run.
I would think my three bullet points should imply that I already know that energy is not a fungible resource. But there are still better uses than Bitcoin.
There is not a problem with shipping hydrogen from ghost cities in China. Neither is there a problem with running datacenters that we need for other purposes than Bitcoin.
We are currently failing at combating climate change; but to have a hope of avoiding the worst case scenarios, fossils need to be replaced with renewables at an unprecedented scale. Not only current electricity use, but also energy used in transportation. It's a huge undertaking, where you need to ramp as quickly as you can in every way you can.
The train is starting to finally move now, and in a few years, investment into renewables will not be the limiting factor. The limiting factor is how quickly it is possible to construct. Since the limiting factor is not investment; every kwh spent on Bitcoin is a kwh lost to combating climate change.
There is not a problem with shipping hydrogen from ghost cities in China. Neither is there a problem with running datacenters that we need for other purposes than Bitcoin.
We are currently failing at combating climate change; but to have a hope of avoiding the worst case scenarios, fossils need to be replaced with renewables at an unprecedented scale. Not only current electricity use, but also energy used in transportation. It's a huge undertaking, where you need to ramp as quickly as you can in every way you can.
The train is starting to finally move now, and in a few years, investment into renewables will not be the limiting factor. The limiting factor is how quickly it is possible to construct. Since the limiting factor is not investment; every kwh spent on Bitcoin is a kwh lost to combating climate change.
> I would think my three bullet points should imply that I already know that energy is not a fungible resource. But there are still better uses than Bitcoin.
Okay, my apologies, I did respond a bit too glibly there.
> There is not a problem with shipping hydrogen from ghost cities in China.
There is the same problem with this that exists with many energy storage solutions: often the storage creates more carbon usage and other environmental effects than simply burning fossil fuels closer to the location where the energy is needed.
> Neither is there a problem with running datacenters that we need for other purposes than Bitcoin.
There are a bunch of reasons all the FAANG data centers are near population centers, but the two ones that are most obvious to me are:
1. Internet infrastructure is near population centers, because the people in population centers are the ones the internet it intended to connect to. If you want to hook into the backbone of the internet, you have to be located near the backbone of the internet. This is necessary for latency.
2. Data centers require technical maintenance, and technical workers capable of doing that maintenance tend to live in population centers.
> We are currently failing at combating climate change; but to have a hope of avoiding the worst case scenarios, fossils need to be replaced with renewables at an unprecedented scale. Not only current electricity use, but also energy used in transportation. It's a huge undertaking, where you need to ramp as quickly as you can in every way you can.
You're preaching to the choir here.
> The train is starting to finally move now, and in a few years, investment into renewables will not be the limiting factor. The limiting factor is how quickly it is possible to construct. Since the limiting factor is not investment; every kwh spent on Bitcoin is a kwh lost to combating climate change.
This is where we disagree, I think. There's a lot of limiting factors. Even if there's massive investment into renewables, there can always be more money and more efficient use of the money you have. One of the biggest inefficiencies of renewables is that they tend to be time-bound: as you probably know, wind produces the most at night, and solar produces exclusively during the day, and neither production cycle perfectly matches with the energy usage cycle.
(As you probably know), two popular areas of exploration here are storage and changing usage:
1. Every major storage solution either doesn't work yet, or is horribly inefficient in some way. Batteries are inefficient in output/input, and have downsides in terms of metal pollutants and disposal of retired batteries even when producing the batteries isn't the limiting factor. Gravitational storage requires huge amounts of space. Thermal storage simply doesn't work at scale yet.
2. Changing usage, i.e. running networked hot water heaters when other forms of usage are low, is a promising area of development, but so far the improvements in efficiency are very modest.
A third solution which I think you're maybe underestimating, is to simply produce more energy, and use the excess production at low usage times to mine bitcoin. The profits from this can be used for a bunch of purposes, for example to reduce the cost of renewable energy to consumers (thereby increasing adoption) or to build more renewable energy.
I'll add that while nuclear energy is not technically a renewable resource, it can be part of a strategy for reducing greenhouse gas emissions, which is arguably the most important aspect of renewables. Nuclear power solves a bunch of problems that renewables don't solve, but it also has the problem of mismatch with the consumption cycle: nuclear power production isn't cyclical like solar/wind, it's not adaptable: it's extremely expensive to spin up and down generation: there have been a bunch of times in Germany where it was cheaper for nuclear power plants to pay consumers to take their excess power than to spin down generation. Bitcoin mining has the potential to power consumption for nuclear power plants as well, which could greatly decrease the cost of running nuclear power.
Okay, my apologies, I did respond a bit too glibly there.
> There is not a problem with shipping hydrogen from ghost cities in China.
There is the same problem with this that exists with many energy storage solutions: often the storage creates more carbon usage and other environmental effects than simply burning fossil fuels closer to the location where the energy is needed.
> Neither is there a problem with running datacenters that we need for other purposes than Bitcoin.
There are a bunch of reasons all the FAANG data centers are near population centers, but the two ones that are most obvious to me are:
1. Internet infrastructure is near population centers, because the people in population centers are the ones the internet it intended to connect to. If you want to hook into the backbone of the internet, you have to be located near the backbone of the internet. This is necessary for latency.
2. Data centers require technical maintenance, and technical workers capable of doing that maintenance tend to live in population centers.
> We are currently failing at combating climate change; but to have a hope of avoiding the worst case scenarios, fossils need to be replaced with renewables at an unprecedented scale. Not only current electricity use, but also energy used in transportation. It's a huge undertaking, where you need to ramp as quickly as you can in every way you can.
You're preaching to the choir here.
> The train is starting to finally move now, and in a few years, investment into renewables will not be the limiting factor. The limiting factor is how quickly it is possible to construct. Since the limiting factor is not investment; every kwh spent on Bitcoin is a kwh lost to combating climate change.
This is where we disagree, I think. There's a lot of limiting factors. Even if there's massive investment into renewables, there can always be more money and more efficient use of the money you have. One of the biggest inefficiencies of renewables is that they tend to be time-bound: as you probably know, wind produces the most at night, and solar produces exclusively during the day, and neither production cycle perfectly matches with the energy usage cycle.
(As you probably know), two popular areas of exploration here are storage and changing usage:
1. Every major storage solution either doesn't work yet, or is horribly inefficient in some way. Batteries are inefficient in output/input, and have downsides in terms of metal pollutants and disposal of retired batteries even when producing the batteries isn't the limiting factor. Gravitational storage requires huge amounts of space. Thermal storage simply doesn't work at scale yet.
2. Changing usage, i.e. running networked hot water heaters when other forms of usage are low, is a promising area of development, but so far the improvements in efficiency are very modest.
A third solution which I think you're maybe underestimating, is to simply produce more energy, and use the excess production at low usage times to mine bitcoin. The profits from this can be used for a bunch of purposes, for example to reduce the cost of renewable energy to consumers (thereby increasing adoption) or to build more renewable energy.
I'll add that while nuclear energy is not technically a renewable resource, it can be part of a strategy for reducing greenhouse gas emissions, which is arguably the most important aspect of renewables. Nuclear power solves a bunch of problems that renewables don't solve, but it also has the problem of mismatch with the consumption cycle: nuclear power production isn't cyclical like solar/wind, it's not adaptable: it's extremely expensive to spin up and down generation: there have been a bunch of times in Germany where it was cheaper for nuclear power plants to pay consumers to take their excess power than to spin down generation. Bitcoin mining has the potential to power consumption for nuclear power plants as well, which could greatly decrease the cost of running nuclear power.
The profit margins of a miner is pretty slim. If the price increases, mining becomes profitable, competition increases bringing down the profitability, likewise in reverse.
So yes, you need money to mine, but whatever you mine, you pretty much have to turn around and sell it right away to cover your costs and keep a small profit.
So yes, you need money to mine, but whatever you mine, you pretty much have to turn around and sell it right away to cover your costs and keep a small profit.
That's exactly what I meant with "all crypto holders pay for it": in the state of equilibrium of costs and rewards, the huge costs are effectively paid by devaluing existing crypto holdings and via transaction costs. Is that good for crypto holders? No way! It's also not too good for miners of course, as they are in it for profit, not for rewards equaling costs.
But fortunately for the miners, crypto mining is rarely in that state of equilibrium. In reality, mining does allow for a hefty profit margin to be reaped most of the time. Ask the miners if you don't believe me, they're not exactly used to just making "small profits". And who pays for that profit margin? Crypto holders and those making transactions with it - again!
However you want to look at it, this coin looks crappy from both sides. Unless you're a miner.
But fortunately for the miners, crypto mining is rarely in that state of equilibrium. In reality, mining does allow for a hefty profit margin to be reaped most of the time. Ask the miners if you don't believe me, they're not exactly used to just making "small profits". And who pays for that profit margin? Crypto holders and those making transactions with it - again!
However you want to look at it, this coin looks crappy from both sides. Unless you're a miner.
> However you want to look at it, this coin looks crappy from both sides. Unless you're a miner.
Depends on what you are comparing to. For me, Bitcoin is easier to understand than the fiat system we are currently using, and that's why I'm heavily invested in to it.
In addition to miners making huge profits, there have been also cases where miner operations have turned sour, KnC Miner being one example.
Yes, there might be better systems out there. But BTC has very clear and simple protocol rules which are easy to understand, and it has properties which are very lucrative (permissionless, decentralized, limited supply, easily verifiable and transferable and so on). Other consensus mechanisms fail to deliver their promise in as effective way.
Depends on what you are comparing to. For me, Bitcoin is easier to understand than the fiat system we are currently using, and that's why I'm heavily invested in to it.
In addition to miners making huge profits, there have been also cases where miner operations have turned sour, KnC Miner being one example.
Yes, there might be better systems out there. But BTC has very clear and simple protocol rules which are easy to understand, and it has properties which are very lucrative (permissionless, decentralized, limited supply, easily verifiable and transferable and so on). Other consensus mechanisms fail to deliver their promise in as effective way.
PoW also codifies "rich gets richer" - mining begets return on invested capital in exactly the same way that PoS does.
In fact, arguably PoW is worse, because it has economies of scale that PoS does not have, so the rich truly do have an edge in PoW.
In fact, arguably PoW is worse, because it has economies of scale that PoS does not have, so the rich truly do have an edge in PoW.
A PoW miner has to spend to cover their costs, a staker doesn't have any cost to cover, providing a cryptographic signature requires no energy on an ongoing basis, just an initial investment.
PoW requires constant investment or you'll be left behind.
PoW requires constant investment or you'll be left behind.
That isn't a counter argument to the rich get richer. POW is still a race to the bottom that favors the well funded.
What commercial activity doesn’t “favor the well-funded”? That’s a rather moot point, wouldn’t you say?
Staking coins just means clicking a button and receiving a financial yield proportionate to your initial investment. Simply showing up with money on day one is enough to earn money on your money.
People financially invested in staking frequently pretend like button-clicking auto-yield is the exact same thing as A) procuring powerful computers which rapidly become obsolete year after year, and B) paying for electricity and hosting facilities for those computers over a long period of time. But the difference between the two scenarios is night and day, and no amount of waxing poetic over “commerce favoring the well-funded” will change that fact.
To act as if staking has exactly the same economic properties as mining is false equivalence.
Staking coins just means clicking a button and receiving a financial yield proportionate to your initial investment. Simply showing up with money on day one is enough to earn money on your money.
People financially invested in staking frequently pretend like button-clicking auto-yield is the exact same thing as A) procuring powerful computers which rapidly become obsolete year after year, and B) paying for electricity and hosting facilities for those computers over a long period of time. But the difference between the two scenarios is night and day, and no amount of waxing poetic over “commerce favoring the well-funded” will change that fact.
To act as if staking has exactly the same economic properties as mining is false equivalence.
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There's a difference between a billionaire generating yield on their money by investing and taking risks vs the Fed just sending them x% of freshly printed money because they are already a billionnaire.
PoS requires constant investment in terms of lost time value of money.
Are you implying you can’t get liquidity from staked coins? This can be worked around by posting your stake as collateral.
There are more effective ways to make money in PoS networks than staking.
Staking is not all that profitable, really. The rich get richer at a rate which is comparable to a Vanguard ETF but the price volatility is much higher than a Vanguard ETF.
Staking is not all that profitable, really. The rich get richer at a rate which is comparable to a Vanguard ETF but the price volatility is much higher than a Vanguard ETF.
I wish there would be more debate about the equity of a cryptocurrency amongst the tech community. Why should the least well off in society be part of a crypto-coin whose supply has been given to early adopters and insiders? Ultimately the social compact of the economy you create will involve everyone, so we should design a coin that solves hard problems, not just narrowly defined ones that conveniently benefit a narrow minority.
Bitcoin had by far the fairest distribution and the largest holder (Satoshi) hasn't touched his coins and for all practical purposes they are gone. You just can't replicate the same conditions which lead to it's existence today.
From what I've seen, the main purpose of like 90+% of altcoins is to benefit their developers and investors and they'll likely all die and disappear.
From what I've seen, the main purpose of like 90+% of altcoins is to benefit their developers and investors and they'll likely all die and disappear.
> Why should the least well off in society be part of a crypto-coin whose supply has been given to early adopters and insiders?
They shouldn't, what Bitcoin is enabling is the ability for whoever to use whatever kind of coin they want. Bitcoin opened the whole pandoras box where anyone can create their own coin if they want.
However, for each crypto coin there is clear incentive to make the coin more useful in transactions, both for those more well off and for those less fortunate. Typical BTC holder wants to make BTC useful for everyone, because that adds value for their holdings. That usefulness might add value to those less well-off. If not, they can use something else - in the end there is more choice in the marketplace which should (in theory) benefit everyone.
They shouldn't, what Bitcoin is enabling is the ability for whoever to use whatever kind of coin they want. Bitcoin opened the whole pandoras box where anyone can create their own coin if they want.
However, for each crypto coin there is clear incentive to make the coin more useful in transactions, both for those more well off and for those less fortunate. Typical BTC holder wants to make BTC useful for everyone, because that adds value for their holdings. That usefulness might add value to those less well-off. If not, they can use something else - in the end there is more choice in the marketplace which should (in theory) benefit everyone.
> Why should the least well off in society be part of a crypto-coin whose supply has been given to early adopters and insiders?
Just taking a stab at it, maybe bc we haven't come up with a notion of how a viable crypto-coin could be started by the least well off, who are -by definition- at a competitive disadvantage in launching successful projects.
I'm not saying it's an impossible problem, just that these systems tend to be driven by economies of scale, whether it's new/disruptive, or the product of an older, more established regime.
And to be clear, I am not suggesting this with the finality of a foregone conclusion, but merely thinking aloud about the dynamic of the underlying problem.
Just taking a stab at it, maybe bc we haven't come up with a notion of how a viable crypto-coin could be started by the least well off, who are -by definition- at a competitive disadvantage in launching successful projects.
I'm not saying it's an impossible problem, just that these systems tend to be driven by economies of scale, whether it's new/disruptive, or the product of an older, more established regime.
And to be clear, I am not suggesting this with the finality of a foregone conclusion, but merely thinking aloud about the dynamic of the underlying problem.
> A PoW miner has to spend to cover their costs, a staker doesn't have any cost to cover, providing a cryptographic signature requires no energy on an ongoing basis, just an initial investment.
And that is great news for crypto holders, cause that means PoS rewards can be way smaller than PoW rewards, which means less devaluation of existing coins and lower transaction fees!
And that is great news for crypto holders, cause that means PoS rewards can be way smaller than PoW rewards, which means less devaluation of existing coins and lower transaction fees!
It's good news for current holders with large holdings, it's bad news for new people coming into the system which is why I said it makes it exclusionary over time.
It's exactly opposite.
When rich, with POS, you need to do nothing at all. No investment, no risk, no competition, you can just park your money and tap new money.
When rich, with POS, you need to do nothing at all. No investment, no risk, no competition, you can just park your money and tap new money.
With PoS you tap new coins but your share of the chain stays the same. The only thing happening is that you are not penalized by inflation. This is just a mechanism to incentives hodlers to participate in the security of the network by staking.
With PoW, you do nothing except maintain your mining hardware and burn electricity.
With PoS, you do nothing except maintain your staking hardware and burn the time value of the money you are staking.
From that perspective there is no difference. The difference is that with PoW, the richest participants can afford the most efficient hardware, giving them a super-linear advantage. In PoS, it's still true that the "rich get richer", but only at a linear rate, since there is no way to improve the efficiency of staking (which is basically the best you could ask for).
With PoS, you do nothing except maintain your staking hardware and burn the time value of the money you are staking.
From that perspective there is no difference. The difference is that with PoW, the richest participants can afford the most efficient hardware, giving them a super-linear advantage. In PoS, it's still true that the "rich get richer", but only at a linear rate, since there is no way to improve the efficiency of staking (which is basically the best you could ask for).
Mining coins is a risky business, you can very easily lose money there. Proof of stake isn't, you have codified it into the inner workings of the coin that the rich gets richer. Not through interest or banking or investment returns, its just the fundamental law that the rich get richer. That is a significant difference.
It is like, imagine if USA had written in the constitution that the rich should get richer? Would you defend that move by saying "Well, the rich gets better investments anyway so this wont make a difference!".
It is like, imagine if USA had written in the constitution that the rich should get richer? Would you defend that move by saying "Well, the rich gets better investments anyway so this wont make a difference!".
You can lose money staking too, in exactly the same way. The staking reward needs to be greater than the return of whatever else you could have invested your money in instead. If the staking reward ends up being lower, then you are effectively losing money. Just like how when mining in a PoW coin, you are effectively losing money if the coin reward becomes less than the electricity cost. It's no different from that perspective.
It is a "fundamental law" in both PoW and PoS that you get rewarded for doing the work/staking. I don't really understand your point about the US constitution -- what I am saying is that PoS systems minimize the effect of the "rich getting richer" as much as possible by forcing it to be at most a linear effect. Whereas there is no need to include such language in the US constitution at all.
It is a "fundamental law" in both PoW and PoS that you get rewarded for doing the work/staking. I don't really understand your point about the US constitution -- what I am saying is that PoS systems minimize the effect of the "rich getting richer" as much as possible by forcing it to be at most a linear effect. Whereas there is no need to include such language in the US constitution at all.
You have a very odd grasp of reality.
If I invest in Bitcoin and its price increased by 10%, I did not lose money if it turned out that real estate would have gained by 20%. I still gained 10%. Actually, only if I sold it.
That's not "losing money", it's not maximizing returns.
Further, you're still missing the double effect of staking. With staking your portfolio value will depend on the price of the token, yet since you staked it (it's locked up), it's a paper win/loss. Further, regardless of that, you get NEW coins for free.
Further, it's not linear at all. It's whatever the token does, which can be linear, parabolic, anything.
If I invest in Bitcoin and its price increased by 10%, I did not lose money if it turned out that real estate would have gained by 20%. I still gained 10%. Actually, only if I sold it.
That's not "losing money", it's not maximizing returns.
Further, you're still missing the double effect of staking. With staking your portfolio value will depend on the price of the token, yet since you staked it (it's locked up), it's a paper win/loss. Further, regardless of that, you get NEW coins for free.
Further, it's not linear at all. It's whatever the token does, which can be linear, parabolic, anything.
That aspect is the same as PoW. PoW rewards also depend on what the value of the coin does.
You are right that you wouldn't normally consider alternate investments like that. But with PoS, where the only cost is the time value of the money staked, it is the only thing to compare.
You are right that you wouldn't normally consider alternate investments like that. But with PoS, where the only cost is the time value of the money staked, it is the only thing to compare.
Are you serious? You equate running a complicated, deeply competitive business with highly variable yields (can even be negative) with just parking money, and call both "doing nothing"?
If you reason like that, I suppose in your world fireworks is the same thing as a rocket bringing us to Mars?
Is running Amazon and making a profit the same thing as just milking interest from a bank account?
These differences aren't trivial, they are massive. In a PoW world, most rich people don't mine, they just hold the crypto. In a PoS world, said rich people auto-mine by just holding crypto.
If you reason like that, I suppose in your world fireworks is the same thing as a rocket bringing us to Mars?
Is running Amazon and making a profit the same thing as just milking interest from a bank account?
These differences aren't trivial, they are massive. In a PoW world, most rich people don't mine, they just hold the crypto. In a PoS world, said rich people auto-mine by just holding crypto.
> You equate running a complicated, deeply competitive business with highly variable yields (can even be negative) with just parking money, and call both "doing nothing"?
No, what I am really saying is that PoW mining and PoS staking aren't so dramatically different in complexity like you are saying. They are actually both complicated businesses with variable yields. The only difference is that with PoW, the benchmark is electricity cost, whereas with PoS the benchmark is the other investments which you could have invested your staking money into.
No, what I am really saying is that PoW mining and PoS staking aren't so dramatically different in complexity like you are saying. They are actually both complicated businesses with variable yields. The only difference is that with PoW, the benchmark is electricity cost, whereas with PoS the benchmark is the other investments which you could have invested your staking money into.
Staking takes a few clicks, mining require physical setup, maintenance, rent, buy, to me that’s orders of magnitude more steps than staking.
Staking requires all those things too. Or you could pay a service to do it for you, but that applies to PoW mining as well.
Nothing against staking, but you and many other posters ITT are creating a blatant false equivalence between button-clicking and datacenter-construction. It’s not beyond the pale quite yet — we’ve all seen far worse from cryptocurrency promoters over the years — but you’re leaving open minded third parties little choice but to interject.
When’s the last time a billion dollar staking operation had to build multiple mining datacenters and fill them with hundreds of millions of dollars worth of hardware? That’s just not required for staking. It just isn’t. They’re not equivalent operations. Not in any way. Not by any stretch of the imagination.
When’s the last time a billion dollar staking operation had to build multiple mining datacenters and fill them with hundreds of millions of dollars worth of hardware? That’s just not required for staking. It just isn’t. They’re not equivalent operations. Not in any way. Not by any stretch of the imagination.
> button-clicking and datacenter-construction
Which of these two scenarios seems to favour the rich, in your mind?
Which of these two scenarios seems to favour the rich, in your mind?
They both favour in different ways. You’d need to have huge initial capital, time and energy for mining, that’s quite a barrier to entry. Staking you’d need just large capital as the barrier.
I would say it’s harder to compete with miners than stakers.
I would say it’s harder to compete with miners than stakers.
Running a proof-of-work mining business isn’t risk-free: being wealthy alone is no guarantee of success. Conversely, with button clicking for autoyield, success is all but guaranteed.
There’s really no comparison. Running a business with high fixed and variable costs, and considerable competition is far more difficult to pull off successfully than a passive investment. Which one do you think favours a “gilded elite” more?
There’s really no comparison. Running a business with high fixed and variable costs, and considerable competition is far more difficult to pull off successfully than a passive investment. Which one do you think favours a “gilded elite” more?
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PoW empirically isn't secure. Attacks already happened, most notably on ethereum classic. If it was possible to rent enough hashpower all PoW blockchains would already be attacked because daily mining rewards are trivial compared to potential gains.
The actual security relies on obfuscated proof of stake - how hard it is to attain enough mining hardware. Even so, attacking bitcoin is relatively cheap - even starting from zero, few billions are enough to order mining chips from a fab and organize mining warehouses with enough power to 51% the network. The reason it didn't happen is because there's not enough genuine economic activity on btc to profit from it - the worst you could do is try to steal other crypto from several exchanges, but given that they all require kyc today and the impossibility of hiding such a big operation, it's extremely unlikely to turn out profitable. If btc ever becomes widely used - for example, by Iran to sell their oil, to the point that freezing their btc bankrupts the country - attacking btc may become a military objective, and given the cost involved it would be trivial for the US military. They could leverage all Western owned mining facilities trivially, by telling them to enforce OFAC sanctions - chances are they wouldn't even have to build any mining facilities themselves.
Another way to summarize this is: PoW only works for bitcoin as long as it remains a speculative toy.
Such an attack is impossible in PoS, because unlike mining chips, acquiring enough staking tokens is simply impossible for sufficiently distributed coins - there isn't enough for sale and most owners are anonymous, making sanctions unenforceable. For this reason PoS is the only existing consensus system that can actually support something widely used for real world commerce.
The actual security relies on obfuscated proof of stake - how hard it is to attain enough mining hardware. Even so, attacking bitcoin is relatively cheap - even starting from zero, few billions are enough to order mining chips from a fab and organize mining warehouses with enough power to 51% the network. The reason it didn't happen is because there's not enough genuine economic activity on btc to profit from it - the worst you could do is try to steal other crypto from several exchanges, but given that they all require kyc today and the impossibility of hiding such a big operation, it's extremely unlikely to turn out profitable. If btc ever becomes widely used - for example, by Iran to sell their oil, to the point that freezing their btc bankrupts the country - attacking btc may become a military objective, and given the cost involved it would be trivial for the US military. They could leverage all Western owned mining facilities trivially, by telling them to enforce OFAC sanctions - chances are they wouldn't even have to build any mining facilities themselves.
Another way to summarize this is: PoW only works for bitcoin as long as it remains a speculative toy.
Such an attack is impossible in PoS, because unlike mining chips, acquiring enough staking tokens is simply impossible for sufficiently distributed coins - there isn't enough for sale and most owners are anonymous, making sanctions unenforceable. For this reason PoS is the only existing consensus system that can actually support something widely used for real world commerce.
You are myopic in your comparison. "Most of the stake isn't for sale." Well if we are fantasizing about huge pools of capital shelling out the money necessary to get enough mining equipment for a majority hash rate, there is no reason the same pool of capital can't purchase stake at a premium. Do you think every holder is going avoid selling out to a high premium due to loyalty for the underlying protocl? No, especially when selling means they are no longer exposed to the risk they create by doing so; rational actors will sell to the highest bidder, who may be anonymous. It's exactly the same issue.
Further more you're quip about Bitcoin being unable to scale its security past use as a speculation asset, which as I point out above applies to any PoS asset (perhaps even more so), is also context deficient. Bitcoin's value will increase when mining is more decentralized (which is heuristically determinable enough to take the risk), which will increase mining decentralization. Many large mining setups today could have 51% attacked Bitcoin through most of its history, but they weren't around then. Bitcoin's mining grows just as the price grows, when people are willing to believe in its market value.
Further more you're quip about Bitcoin being unable to scale its security past use as a speculation asset, which as I point out above applies to any PoS asset (perhaps even more so), is also context deficient. Bitcoin's value will increase when mining is more decentralized (which is heuristically determinable enough to take the risk), which will increase mining decentralization. Many large mining setups today could have 51% attacked Bitcoin through most of its history, but they weren't around then. Bitcoin's mining grows just as the price grows, when people are willing to believe in its market value.
>Well if we are fantasizing about huge pools of capital shelling out the money necessary to get enough mining equipment for a majority hash rate, there is no reason the same pool of capital can't purchase stake at a premium
There simply isn't enough for sale. Premium - premium to what? Try to buy 10M eth after mining is gone and price is going to increase several times. Staked amount is constantly increasing and eventually I expect most of eth's supply to be staked.
Even if an attacker somehow acquires enough stake, everyone else can simply fork them out. That's not really possible in PoW - a fork from an asic PoW to a gpu PoW is possible, but it would start with negligible security, and most likely the attacker would secure enough gpus before the (asic) attack to kill the fork. Nothing can be done after a gpu/cpu PoW chain is controlled by a censoring attacker.
>rational actors will sell to the highest bidder, who may be anonymous
Unlike bitcoin, staked eth generates yield, so the principal doesn't have to be sold - ever.
>Bitcoin's value will increase when mining is more decentralized (which is heuristically determinable enough to take the risk), which will increase mining decentralization.
Not sure what was the intention of this sentence - that as bitcoin goes up, mining decentralizes? In any case, mining has infinite economies of scale so it always centralizes. The recent China ban accelerated the process, most likely in the much more dangerous direction - with majority of mining to be done in America or under American control. So far, only America sanctioned crypto addresses, and there are already some American miners that explicitly enforce them.
There simply isn't enough for sale. Premium - premium to what? Try to buy 10M eth after mining is gone and price is going to increase several times. Staked amount is constantly increasing and eventually I expect most of eth's supply to be staked.
Even if an attacker somehow acquires enough stake, everyone else can simply fork them out. That's not really possible in PoW - a fork from an asic PoW to a gpu PoW is possible, but it would start with negligible security, and most likely the attacker would secure enough gpus before the (asic) attack to kill the fork. Nothing can be done after a gpu/cpu PoW chain is controlled by a censoring attacker.
>rational actors will sell to the highest bidder, who may be anonymous
Unlike bitcoin, staked eth generates yield, so the principal doesn't have to be sold - ever.
>Bitcoin's value will increase when mining is more decentralized (which is heuristically determinable enough to take the risk), which will increase mining decentralization.
Not sure what was the intention of this sentence - that as bitcoin goes up, mining decentralizes? In any case, mining has infinite economies of scale so it always centralizes. The recent China ban accelerated the process, most likely in the much more dangerous direction - with majority of mining to be done in America or under American control. So far, only America sanctioned crypto addresses, and there are already some American miners that explicitly enforce them.
Staking ETH isn't risk-free or hassle-free -- you have to keep a validator running and online, on pain of getting slashed. If you're not going to outsource your validators to $CLOUD_PROVIDER or $EXCHANGE (which you shouldn't, since why trust them?), then you have to be forever vigilant of your uptime.
This is painful enough that most people will happily outsource it while collecting yield. What will almost certainly happen is ETH holders will self-organize into a handful of large well-connected staking pools run by exchanges. Heaven forbid your exchange gets hacked or goes offline.
This is painful enough that most people will happily outsource it while collecting yield. What will almost certainly happen is ETH holders will self-organize into a handful of large well-connected staking pools run by exchanges. Heaven forbid your exchange gets hacked or goes offline.
> Such an attack is impossible in PoS, because unlike mining chips, acquiring enough staking tokens is simply impossible for sufficiently distributed coins - there isn't enough for sale and most owners are anonymous, making sanctions unenforceable.
This is only true in the absence of software bugs. In the presence of buggy node software, a worm can spread through the network, compromising all the private staking keys. In this way the whole network can be subverted by gaining access to secret information (private keys). This attack is not possible with PoW.
This is only true in the absence of software bugs. In the presence of buggy node software, a worm can spread through the network, compromising all the private staking keys. In this way the whole network can be subverted by gaining access to secret information (private keys). This attack is not possible with PoW.
You don't even need that. A buggy DeFi contract will happily give an attacker all its ETH.
> PoS is a pretty broken system imo
You could have a PoS currency that would initially distribute all coins evenly across the globe (that would be a really cool experiment). But yeah I don't like PoS either.
You could have a PoS currency that would initially distribute all coins evenly across the globe (that would be a really cool experiment). But yeah I don't like PoS either.
The only way this could work would be to force people to register their wallet address using some kind of government ID to prove that they are unique. But at that point you’re back to having created a completely centralised system.
This is actually quite fun to say out loud - "here is a revolutionary trustless system of currency, but you must trust a group of anonymous developers in the non-extradition offshore not to screw you with premine"
"here is a revolutionary trustless system of currency, but you must trust a group of anonymous developers in the non-extradition offshore not to screw you with premine" and trust them to make immutable smart contracts 100% bug free to prevent scandals like DAO onwards, and trust shady mining cartels, and unregulated exchanges, and the shadowy cryptocurrency oligarchs manipulating prices, etc.
The fact is that this "revolutionary new financial system" doesn't remove trust - it just shifts trust to the less trustworthy.
The fact is that this "revolutionary new financial system" doesn't remove trust - it just shifts trust to the less trustworthy.
Have you never used a block explorer, or do you just not understand how blockchain works? I fully agree there are weird insider deals based on allocations and premines - but that's all fully auditable, and if it isn't, that says all you need to know. You are applying the flaws of the worst examples across the whole technology AKA a strawman. Maybe you're just salty you could never take the risk required to make money on new tech and don't want to think of yourself as a Luddite.
I have fun staying poor, thank you very much, as your group likes to say. And since you have managed to learn a concept called "strawmen" (not applicable here, but anyway), you may also want to learn a concept called "ad hominem".
So please tell me, how does being auditable (note that "auditable" is very different from "audited") prevents creators from selling premine?
So please tell me, how does being auditable (note that "auditable" is very different from "audited") prevents creators from selling premine?
anonymous non-extradition seems like an irrelevant detail if node consensus is the entire extent of the contract
but the anonymous part does deter any social blowback
but the anonymous part does deter any social blowback
Exactly This. Why can people NOT see this?!
> Proof of Work on the other hand doesn't have this issue. The creator has the same ability to mine coins as anyone else does, so it doesn't have the same initial trust issues as Proof of Stake does.
It certainly does. Many POW coins are kept private for a small amount of time so that the developers can mine without competition before making the network public.
It certainly does. Many POW coins are kept private for a small amount of time so that the developers can mine without competition before making the network public.
That's not a proof of work issue - that's a people issue, and its auditable.
> Etherium 2.0 has been supposedly just around the corner for years and it never really arrives.
They've been pretty public that it's years away for a while now. Nobody has ever said it's just around the corner until recently when it was given priority over the merge and is now estimated to be completed Q1 2022 (or Q4 2021 in the unlikely best-case scenario).
> Proof of Work on the other hand doesn't have this issue. The creator has the same ability to mine coins as anyone else does
Unless they ninja mine (pre-mine) like Satoshi did....
They've been pretty public that it's years away for a while now. Nobody has ever said it's just around the corner until recently when it was given priority over the merge and is now estimated to be completed Q1 2022 (or Q4 2021 in the unlikely best-case scenario).
> Proof of Work on the other hand doesn't have this issue. The creator has the same ability to mine coins as anyone else does
Unless they ninja mine (pre-mine) like Satoshi did....
> Unless they ninja mine (pre-mine) like Satoshi did....
What proof would you offer of a premine by Satoshi?
What proof would you offer of a premine by Satoshi?
It’s perhaps not technically a premine but practically it is. There’s a protection however - if any of those coins ever move Bitcoin will have a very interesting day.
The problem with labelling it a premine is that it is, intentionally or not, a loaded FUD term commonly used to describe scam coins and to enrich "founders".
Bitcoin was not premined in any sense of the word and Satoshi was quite verbose and open about his reasoning and launch date as well as supplying working mining code publicly.
Bitcoin was not premined in any sense of the word and Satoshi was quite verbose and open about his reasoning and launch date as well as supplying working mining code publicly.
He premined so much that even after 10 years of emissions his stake is >5%
Satoshi mined it the same as anyone else and his stash is as good as gone for all practical purposes.
Indeed; whereas PoS is only a consensus mechanism, PoW is both a consensus and a coin distribution mechanism.
While Ethereum started out as PoW, its huge premine still constitutes a big trust issue.
While Ethereum started out as PoW, its huge premine still constitutes a big trust issue.
Most of the premine was allocated via an open crowdsale.
Of which the creators can grab an arbitrary part essentially for free.
They absolutely could not grab an arbitrary part for free. What an absurd claim.
The BTC paid during the Ethereum crowdsale went to the Ethereum Foundation bitcoin address, and that address can be audited. Misappropriating those funds would leave a massive chain trail, and require a massive conspiracy to plant the Ethereum Foundation with co-conspirators. It would be unthinkable.
On top of all of that, the operators would need to wait years to retrieve the BTC to not draw attention to the scam, meaning the assets would be locked up and out of reach. So even under this fantastical scenario, the ETH wouldn't be free: there would be a very significant liquidity cost in funds lockup, not to mention all the planning and risks involved in participating in a complex crime, involving an auditable foundation operating under Swiss law.
The BTC paid during the Ethereum crowdsale went to the Ethereum Foundation bitcoin address, and that address can be audited. Misappropriating those funds would leave a massive chain trail, and require a massive conspiracy to plant the Ethereum Foundation with co-conspirators. It would be unthinkable.
On top of all of that, the operators would need to wait years to retrieve the BTC to not draw attention to the scam, meaning the assets would be locked up and out of reach. So even under this fantastical scenario, the ETH wouldn't be free: there would be a very significant liquidity cost in funds lockup, not to mention all the planning and risks involved in participating in a complex crime, involving an auditable foundation operating under Swiss law.
> Misappropriating those funds
Where are the transparency reports detailing how the 31529 BTC raised in the crowdsale were spent?
It would seem straightforward to spend a large fraction of that on software development which would mean that the creators can take part in the crowdsale (which is largely anonymous) and have the spent BTC flow back to themselves.
Where are the transparency reports detailing how the 31529 BTC raised in the crowdsale were spent?
It would seem straightforward to spend a large fraction of that on software development which would mean that the creators can take part in the crowdsale (which is largely anonymous) and have the spent BTC flow back to themselves.
The point is how the prospects of scamming would look to the operators in 2014:
They would know that audits could always be demanded, and that an on-chain trail would exist. If said audits reveal massive grants being given to themselves, they would immediately fall under intense scrutiny, and it would only take one of their co-conspirators to spill the beans for them to all be burned.
For them to actually consider this subterfuge, with the risks involved, would be unthinkable.
They would know that audits could always be demanded, and that an on-chain trail would exist. If said audits reveal massive grants being given to themselves, they would immediately fall under intense scrutiny, and it would only take one of their co-conspirators to spill the beans for them to all be burned.
For them to actually consider this subterfuge, with the risks involved, would be unthinkable.
Ideally a system of credit based on proof of work is based on proof of productive work embodied in artifacts which competition can increase the supply of without restraint.
A proof of productive work system can be implemented by having public employees of local loan office assess the minimum labor replacement cost of crops, equipment, structures, materials, and working inventory held on sites. Then allowing loans to be issued on security of the material capital at a duration which ensures the money is repaid before the value of the work stored in the material capital fully depreciates.
So bitcoin's proof of work algorithm is proof of unproductive work rather than proof of productive work. A public system of credit based on proof productive work stored in material capital stored on land does require establishing and maintaining a well organized state. But this is not necessarily an ethical dilemma for the majority of the population and may be necessary to solve global problems that society may be faced with in the future.
A proof of productive work system can be implemented by having public employees of local loan office assess the minimum labor replacement cost of crops, equipment, structures, materials, and working inventory held on sites. Then allowing loans to be issued on security of the material capital at a duration which ensures the money is repaid before the value of the work stored in the material capital fully depreciates.
So bitcoin's proof of work algorithm is proof of unproductive work rather than proof of productive work. A public system of credit based on proof productive work stored in material capital stored on land does require establishing and maintaining a well organized state. But this is not necessarily an ethical dilemma for the majority of the population and may be necessary to solve global problems that society may be faced with in the future.
If you're doing productive work then you're already producing something of value, and can likely sell more easily and safely using the existing financial system. It would have to be some sort of productive work that is not otherwise valued due to limitations in our economic system, perhaps climate change related actions as explored in Ministry for the Future. Still seems like it would just be easier to pay people normally to do that work.
What I think you’re saying is that it’s not adding value?
For me at least that is it main flaw. Trust is the only thing that’s keeping it alive, and the need for more people to buy into it. To me that makes it sound like just another MLM system.
Cryptocoin might crash at some point because of these issues.
For me at least that is it main flaw. Trust is the only thing that’s keeping it alive, and the need for more people to buy into it. To me that makes it sound like just another MLM system.
Cryptocoin might crash at some point because of these issues.
>>The problem with that is that it's never going to be in the interest of the miners to actually change to it.
Miners have no way to stop a hard fork. That is entirely dependent on what client users and service providers run, and miners have no control over that.
And Ethereum 2.0 has already launched its Phase 0 (first of three phases), on December 1st, 2020.
Miners have no way to stop a hard fork. That is entirely dependent on what client users and service providers run, and miners have no control over that.
And Ethereum 2.0 has already launched its Phase 0 (first of three phases), on December 1st, 2020.
Yeah I'm not sure what the parent is going on about regarding ETH 2.0. I already converted some ETH -> ETH 2.0 and its earning more coin in rewards right now. Granted it can't be moved until the next phase, I believe, which could still be a while, but it's not vaporware.
There is a third method which, funnily enough, was implemented by the very first PoS coin. A hybrid blockchain in which PoW is used for distribution.
Some projects try to resolve initial distribution issue by issuing airdrops.
At least one project even gone further by doing what they called a "fairdrop", so that small holders receive more than large holders : https://medium.com/osmosis/osmo-token-distribution-ae27ea2bb...
At least one project even gone further by doing what they called a "fairdrop", so that small holders receive more than large holders : https://medium.com/osmosis/osmo-token-distribution-ae27ea2bb...
> If you want to have your coin begin as proof of stake you have to have some mechanism for how the initial coins are distributed and that method is usually going to involve the creators giving themselves a lot of coins.
Don't Proof of Work coin issuers do the same? Even Satoshi has a pretty large amount of Bitcoin.
Don't Proof of Work coin issuers do the same? Even Satoshi has a pretty large amount of Bitcoin.
The thing is that PoW "works" even in the case where Satoshi-equivalent has most of coins, as the transactions are controlled by the mining power and new coins will be distributed through mining. With PoS, if founders hold most of the coins, then the scheme does not work as they de facto arbitrarily control the transactions and there's no way for a community to get that control unless they hand over the coins - thus, in PoS (unlike PoW) the founders need to solve the distribution problem before the scheme can become useful.
There were no pre-mined bitcoin distributed. Satoshi mined his coins in the early days but crucially anyone could participate and mine at the same time.
I know that in USA legal system there is concept "spirit of the law" and afaik there were cases when a person was intentionally abiding the "word of the law" but breaking "spirit of the law" and was penalized for this.
So anyway, Satoshi solo mine and anyone else's solo mine, is not technically a premine, but in a spirit - it is. Saying that solo mine is not a premine is true, but you know, I know, everyone knows that essentially it is exactly the same as premine.
So anyway, Satoshi solo mine and anyone else's solo mine, is not technically a premine, but in a spirit - it is. Saying that solo mine is not a premine is true, but you know, I know, everyone knows that essentially it is exactly the same as premine.
In a premine, developers hard code coin balances for themselves into their own ledger prior to public mining becoming available. Satoshi clearly didn’t do this. It’s that cut and dry.
The definition of a premine isn't as clear as you put it. Or at least isn't always used in the same way.
With your definition, Ethereum only had a 16% premine.
With your definition, Ethereum only had a 16% premine.
“Premine”: previous to public mining, coins were distributed.
Satoshi absolutely didn’t premine Bitcoin.
Satoshi absolutely didn’t premine Bitcoin.
And yet, Satoshi has huge holdings just as if premined.
Premine means coins were distributed prior to a public mining phase. If public mining was available, and no coins were distributed prior to that, the coin wasn’t premined.
Despite the definition of “premine” being extremely clear cut and objective, apologists for premined coins often liberally redefine and butcher the definition for financially-motivated, self-serving reasons: “See, Bitcoin is premined too. XYZ did nothing wrong.”
Just to understand how ridiculous this is, if we’re going to redefine premine to mean “any coin perceived to be unfairly distributed”, then we might as well not even use the word at all, because biased investors will use the term to describe every cryptocurrency they’re not invested in.
Despite the definition of “premine” being extremely clear cut and objective, apologists for premined coins often liberally redefine and butcher the definition for financially-motivated, self-serving reasons: “See, Bitcoin is premined too. XYZ did nothing wrong.”
Just to understand how ridiculous this is, if we’re going to redefine premine to mean “any coin perceived to be unfairly distributed”, then we might as well not even use the word at all, because biased investors will use the term to describe every cryptocurrency they’re not invested in.
That's because the other 7+ billion were not smart enough to compete with him for nearly a year, despite it being made public at the time Satoshi began mining.
The "pre" in premine means "before," as in, they mine themselves the coins before they publicly release the knowledge required to begin mining. Satoshi didn't do this. There was no premining of bitcoin.
The "pre" in premine means "before," as in, they mine themselves the coins before they publicly release the knowledge required to begin mining. Satoshi didn't do this. There was no premining of bitcoin.
This seems like a very cynical take. Somebody has to mine to keep the network secure. Starting the code and hoping the world starts mining equally is naive.
https://endthefud.org/
There's a Proof of Stake section describing all of its shortcomings compared to Proof of Work.
Plus a lot of bitcoin fud debunking.
There's a Proof of Stake section describing all of its shortcomings compared to Proof of Work.
Plus a lot of bitcoin fud debunking.
This seems to be a selection of links for bitcoin maximalists. Not an unbiased discussion about pros and cons for different blockchains.
Seems like a nicely researched collection of links, although I think they are a bit too quick to dismiss PoS as a lost cause. Perhaps PoW really is the superior system for now, but that doesn't mean we shouldn't continue to research PoS systems.
POS might be the future, and if we find that it's impossible to predict which stakes will be doing validation, I'm all for Bitcoin upgrading to POS.
Its just not ready today. No one is going to risk their Bitcoin savings on trying POS.
Let ethereum test it, then BTC can adopt it after a few years.
Its just not ready today. No one is going to risk their Bitcoin savings on trying POS.
Let ethereum test it, then BTC can adopt it after a few years.
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BTC will never be PoS. Sorry, PoS is a dead end. Wait until those black swan event start splitting chains. They will be clambering for the PoW lifeboats.
Thanks for the link — that’s a great site.
They don’t need to be, but it gives the best security guarantees. PoS is subject to threats that don’t exist for PoW, e.g. https://news.ycombinator.com/item?id=27672759.
They don’t need to be, but it gives the best security guarantees.
That is not true, the security has nothing to do with energy consumption, only with cost. If you had to verifiable set a million dollars on fire for mining a block, that would be as secure as proof of work without wasting energy. Also anything like mining is only necessary at all if you want anonymity, if you drop that requirement you unlock a vast space of very cheap solutions.
That is not true, the security has nothing to do with energy consumption, only with cost. If you had to verifiable set a million dollars on fire for mining a block, that would be as secure as proof of work without wasting energy. Also anything like mining is only necessary at all if you want anonymity, if you drop that requirement you unlock a vast space of very cheap solutions.
>If you had to verifiable set a million dollars on fire for mining a block, that would be as secure as proof of work without wasting energy
Sure, but nobody has found a way to do that, nor has anybody found an alternative to PoW that doesn't have terrible security tradeoffs. It doesn't help to say something magical could have better properties - you need to find something that actually works in practice by satisfying all requirements
Sure, but nobody has found a way to do that, nor has anybody found an alternative to PoW that doesn't have terrible security tradeoffs. It doesn't help to say something magical could have better properties - you need to find something that actually works in practice by satisfying all requirements
what qbout zkp or vdf extensions to pos?
PoS relies on the possession (“keeping secret”) of private keys. No matter what you do, private keys (information) can be stolen, including in a covert manner (in a way that no one discovers that anything has been stolen). PoW relies on hardware, for which the same problem does not exist.
There's been some work done to work around this issue. One of the approaches is to keep an always offline "fallback" key that can be used to "lock" an account and transfer ownership to a new account in the case that a private key is leaked.
https://eprint.iacr.org/2021/872
This doesn't solve the issue entirely but it does provide a mechanism for recovering in the case of a major attack.
https://eprint.iacr.org/2021/872
This doesn't solve the issue entirely but it does provide a mechanism for recovering in the case of a major attack.
The fundamental problem that needs to be solved is voting power allocation. You have a group of people that wants to use a cryptocurrency and you want to allow everyone to voice his opinion about what transaction are valid and should be recorded and which are not so that you can determine the consensus.
Your first problem is to decide who gets to vote. Does everyone get to vote or do you have to participate in the system, e.g. own at least some coins in that system? Do only humans get to vote or do legal entities like banks and companies get to vote? Does everyone get the same vote or does the number of votes vary, e.g. based on the amount of coins you own?
The second problem is the hard one, you want this system to be anonymous which means you can not have a directory of voters but you have to prevent voters from casting more votes than they are supposed to have. That means you have to find some proxy for voters that is ideally impossible but in practice at least hard do duplicate. On the other hand this proxy should be easy and cheap to obtain so that every voter can make use of his vote.
For the example of proof of work the assumption is that every human can own and dedicate about the same amount of computing power. It is not too easy to duplicate because you have to spend money in order to buy more computing power and in turn more votes which is better than giving one vote to each username or email address which are much cheaper to duplicate.
But it turned out that it does not work all to well, people can own and dedicate vastly different amounts of computing power after all so that now only a tiny fraction of all Bitcoin users make use of their vote. Everyone else now trusts the miners on the basis of aligned incentives, i.e. malice miners would destroy the trust and usefulness of Bitcoin, driving its value down, and with that undermine their mining revenue.
Personally I am quite skeptical that one can find something that works well. It has to essentially proof that you are a specific human without revealing your identity and still be unforgeable. Proxys like computing power, storage space, or money are generally duplicable by investing more money, so that it seems hard to come up with a system where voting power is not concentrated on the wealthy.
This is not a fundamental problem but there are certainly people that would consider this to undermine the promise of cryptocurrencies to a certain extend because the votes and therefore the power is not spread evenly among the users and so this requires some amount of trust.
Your first problem is to decide who gets to vote. Does everyone get to vote or do you have to participate in the system, e.g. own at least some coins in that system? Do only humans get to vote or do legal entities like banks and companies get to vote? Does everyone get the same vote or does the number of votes vary, e.g. based on the amount of coins you own?
The second problem is the hard one, you want this system to be anonymous which means you can not have a directory of voters but you have to prevent voters from casting more votes than they are supposed to have. That means you have to find some proxy for voters that is ideally impossible but in practice at least hard do duplicate. On the other hand this proxy should be easy and cheap to obtain so that every voter can make use of his vote.
For the example of proof of work the assumption is that every human can own and dedicate about the same amount of computing power. It is not too easy to duplicate because you have to spend money in order to buy more computing power and in turn more votes which is better than giving one vote to each username or email address which are much cheaper to duplicate.
But it turned out that it does not work all to well, people can own and dedicate vastly different amounts of computing power after all so that now only a tiny fraction of all Bitcoin users make use of their vote. Everyone else now trusts the miners on the basis of aligned incentives, i.e. malice miners would destroy the trust and usefulness of Bitcoin, driving its value down, and with that undermine their mining revenue.
Personally I am quite skeptical that one can find something that works well. It has to essentially proof that you are a specific human without revealing your identity and still be unforgeable. Proxys like computing power, storage space, or money are generally duplicable by investing more money, so that it seems hard to come up with a system where voting power is not concentrated on the wealthy.
This is not a fundamental problem but there are certainly people that would consider this to undermine the promise of cryptocurrencies to a certain extend because the votes and therefore the power is not spread evenly among the users and so this requires some amount of trust.
> For the example of proof of work the assumption is that every human can own and dedicate about the same amount of computing power.
I'm not aware of anybody proposing that bitcoin would be a democratic protocol. There were other proposals that were intended to be democratic, but this was explicitly rejected for bitcoin. You might say that bitcoin was intended to be computationally secure against democracy itself.
> Everyone else now trusts the miners on the basis of aligned incentives
Not really. It's on the basis of cost. Let's say you want to reverse a transaction. First you have to have >50% of the network hash power, which means you need to procure >100% of the current hash rate. That would take at least 2 years and $10B. But let's say you bought 300% of the network hash rate, so you own 75% of it. Great. Now you're two years behind, and at 75% it will take you 4 years for your fork to catch up, so 6 years total. Congratulations, now you've caught up and have the longest chain. Oops, nobody cares; only the main chain coins can be traded for coins, cash, goods, or services. You just spent a huge amount of money to prove that there is no such thing as a 51% attack on a UTXO blockchain.
BTW, not so for a stateful blockchain like ETH/ETC. 51% can take control immediately. The difference is that verification on a stateful blockchain doesn't require proof of origin, just consistency with state. A 51% attacker can easily manipulate the state if they maintain control long enough, just by broadcasting their chosen state to any incumbents. Sure, they could do full verification, but, nobody does that. Most full nodes take a while just to sync from the snapshots, never mind genesis.
I'm not aware of anybody proposing that bitcoin would be a democratic protocol. There were other proposals that were intended to be democratic, but this was explicitly rejected for bitcoin. You might say that bitcoin was intended to be computationally secure against democracy itself.
> Everyone else now trusts the miners on the basis of aligned incentives
Not really. It's on the basis of cost. Let's say you want to reverse a transaction. First you have to have >50% of the network hash power, which means you need to procure >100% of the current hash rate. That would take at least 2 years and $10B. But let's say you bought 300% of the network hash rate, so you own 75% of it. Great. Now you're two years behind, and at 75% it will take you 4 years for your fork to catch up, so 6 years total. Congratulations, now you've caught up and have the longest chain. Oops, nobody cares; only the main chain coins can be traded for coins, cash, goods, or services. You just spent a huge amount of money to prove that there is no such thing as a 51% attack on a UTXO blockchain.
BTW, not so for a stateful blockchain like ETH/ETC. 51% can take control immediately. The difference is that verification on a stateful blockchain doesn't require proof of origin, just consistency with state. A 51% attacker can easily manipulate the state if they maintain control long enough, just by broadcasting their chosen state to any incumbents. Sure, they could do full verification, but, nobody does that. Most full nodes take a while just to sync from the snapshots, never mind genesis.
I'm not aware of anybody proposing that bitcoin would be a democratic protocol.
Bitcoin is intended to not have trusted parties. If the mining is done by relatively few parties they become trusted parties. This would not have been an issue if the mining power had remained more evenly spread across all users but it got concentrated in the hands of relatively few.
[...] but this was explicitly rejected for bitcoin.
How was this explicitly rejected? I think the original paper does not really address this but I always assumed that the original intention was to have a large fraction of Bitcoin users also be miners and the concentration that happened was an unforseen development. But maybe that is just my personal interpretation but I maintain that this is at least to some extend in conflict with Bitcoin wanting to be trustless.
Not really. It's on the basis of cost.
No, the miners already have all the hashing power. I have to trust them to include my transactions in blocks and not ignore them, I have to trust them not to undo transactions. If the Bitcoin mining power was more evenly spread among Bitcoin users this would be less of an issue than in the current situation where all the mining power is concentrated in about ten mining pools. Sure, pools are not miners but if the reported numbers are correct than there were at least in the past mining farms owning several percent of the mining power.
Bitcoin is intended to not have trusted parties. If the mining is done by relatively few parties they become trusted parties. This would not have been an issue if the mining power had remained more evenly spread across all users but it got concentrated in the hands of relatively few.
[...] but this was explicitly rejected for bitcoin.
How was this explicitly rejected? I think the original paper does not really address this but I always assumed that the original intention was to have a large fraction of Bitcoin users also be miners and the concentration that happened was an unforseen development. But maybe that is just my personal interpretation but I maintain that this is at least to some extend in conflict with Bitcoin wanting to be trustless.
Not really. It's on the basis of cost.
No, the miners already have all the hashing power. I have to trust them to include my transactions in blocks and not ignore them, I have to trust them not to undo transactions. If the Bitcoin mining power was more evenly spread among Bitcoin users this would be less of an issue than in the current situation where all the mining power is concentrated in about ten mining pools. Sure, pools are not miners but if the reported numbers are correct than there were at least in the past mining farms owning several percent of the mining power.
Decred solves this. In hybrid PoW/PoS, coin holders vote with their equity. Skin in the game provides the greatest incentive for proper decision making. Decred was started by Bitcoin developers early on when they saw that Bitcoin had a problem with governance and decision making. Bitcoin's consensus rules are set in stone. Decred has a measurable and defined process for consensus rule upgrades.
Algorand solves this by using a verifiable random function, with the output weighted according to the user's stake. It's quite elegant. Paper: https://eprint.iacr.org/2018/377
Which is ... proof of stake. Literally vote allocation by wealth.
Isn't that also what proof of work is? I mean, it is far easier for me, a non wealthy person, to stake some pos coin than to mine some bitcoin.
Isn't that desirable for a cryptocurrency?
As long as you want the wealthy to make the decisions while getting more wealthy in the process, sure.
Haven't seen Chia mentioned in this thread and it was only briefly mentioned in the article — Proof of Space/Time seems to have the same security guarantees as Bitcoin without any of the electricity usage. It uses extra hard drive space but a recent report confirmed that a lot of that is using underutilized existing space, not space from new drives: https://www.idc.com/getdoc.jsp?containerId=US47836321
Chia's on-chain language is also a functional LISP called Chialisp that is more secure and auditable than Solidity: https://chialisp.com/ They're having a $500k prize hackathon for building cool things in Chialisp at the end of July: https://cointelegraph.com/press-releases/sirius-labs-launche...
Chia's on-chain language is also a functional LISP called Chialisp that is more secure and auditable than Solidity: https://chialisp.com/ They're having a $500k prize hackathon for building cool things in Chialisp at the end of July: https://cointelegraph.com/press-releases/sirius-labs-launche...
> using underutilized existing space, not space from new drives
Chia is basically turning wasting electricity into wasting silicium (or whatever tapes/harddrives are made from). Because this "space" needs to be created as well. I don't really see how that is less wasteful in the long run.
Chia is basically turning wasting electricity into wasting silicium (or whatever tapes/harddrives are made from). Because this "space" needs to be created as well. I don't really see how that is less wasteful in the long run.
Well I mean the market for hard drives is already over 1 zettabyte a year so it seems a little ridiculous to make that comparison without taking into context the whole picture. Although yes, you're right, some resource needs to be consumed for any blockchain or database to work — in this case it's storage space (not necessarily hard drives).
To my mind, Chia puts existing underutilized space to work so it's not really wasting anything. The data seems to support that conclusion in the report I linked.
To my mind, Chia puts existing underutilized space to work so it's not really wasting anything. The data seems to support that conclusion in the report I linked.
Some resource needs to be consumed, but we have payment systems that are currently multiple orders of magnitude more efficient than Bitcoin or Chia, so that is kind of a baseline. (Think Visa or Mastercard)
Secondly, Chia is a small coin, it did not make a dent in the global market yet. I can believe that so far nobody really bothered to invest in storage.
However, imagine Chia would be as large as say Bitcoin, then Chinese Chia miners would be filling warehouses with tape drives to the effect of millions per year. The costs they are now making burning electricity would be replaced by the same cost at installing computer memory of some kind. Compared to the current financial system that is really wasteful. But even as compared to most existing proof-of-work crypto, it is arguably more damaging to the environment as there are more toxic chemicals involved in tape than in burning electricity.
Overall, you traded wasting time for wasting space. I do not see how that is helpful.
Secondly, Chia is a small coin, it did not make a dent in the global market yet. I can believe that so far nobody really bothered to invest in storage.
However, imagine Chia would be as large as say Bitcoin, then Chinese Chia miners would be filling warehouses with tape drives to the effect of millions per year. The costs they are now making burning electricity would be replaced by the same cost at installing computer memory of some kind. Compared to the current financial system that is really wasteful. But even as compared to most existing proof-of-work crypto, it is arguably more damaging to the environment as there are more toxic chemicals involved in tape than in burning electricity.
Overall, you traded wasting time for wasting space. I do not see how that is helpful.
> we have payment systems that are currently multiple orders of magnitude more efficient than Bitcoin or Chia, so that is kind of a baseline. (Think Visa or Mastercard)
Credit cards offer none of the desirable properties found in many cyptocurrencies such as decentralization, privacy, security, full custody of funds... It makes little sense to compare the two, especially in terms of "efficiency".
Credit cards offer none of the desirable properties found in many cyptocurrencies such as decentralization, privacy, security, full custody of funds... It makes little sense to compare the two, especially in terms of "efficiency".
It does. I am trading off decentralization, privacy, security, ... with (for Bitcoin) more than how much energy I would use in a year and CO2 I would use in a life, per transaction.
They do offer a comparable product, and you need to compare their upsides and downsides.
They do offer a comparable product, and you need to compare their upsides and downsides.
Not really. It is a tradeoff but you can't really compare their efficiency because they don't provide the same features. Credit cards provide none of the properties provided by cryptocurrencies.
You're looking at the cost of transactions. You're not looking at the cost of private anonymous trustless decentralized uncensorable unsanctionable irreversible transactions.
I think bitcoin is a waste of resources because it failed as a cryptocurrency. I wouldn't mind even larger amounts of resources being poured into better coins like XMR though. I don't care how much energy it requires, those properties are just too valuable.
You're looking at the cost of transactions. You're not looking at the cost of private anonymous trustless decentralized uncensorable unsanctionable irreversible transactions.
I think bitcoin is a waste of resources because it failed as a cryptocurrency. I wouldn't mind even larger amounts of resources being poured into better coins like XMR though. I don't care how much energy it requires, those properties are just too valuable.
> Some resource needs to be consumed, but we have payment systems that are currently multiple orders of magnitude more efficient than Bitcoin or Chia, so that is kind of a baseline. (Think Visa or Mastercard)
Well yeah, but blockchains obviously offer different benefits/drawbacks than those platforms which is why they exist.
> Secondly, Chia is a small coin, it did not make a dent in the global market yet. I can believe that so far nobody really bothered to invest in storage.
There are currently 30 EiB of storage securing the network which is about 3% of the total storage market sold every year and a much higher percentage of the retail HDD market. Chia also has significantly more full nodes than Bitcoin. And it's only been out for a few months.
> it is arguably more damaging to the environment as there are more toxic chemicals involved in tape than in burning electricity.
Tape drives don't work with Chia. But you're speculating about an environmental impact that is already happening today with hard drives. Maybe you should send a letter to Google or your local politician about the environmental impact of their hard drives if you're actually concerned about that :)
Well yeah, but blockchains obviously offer different benefits/drawbacks than those platforms which is why they exist.
> Secondly, Chia is a small coin, it did not make a dent in the global market yet. I can believe that so far nobody really bothered to invest in storage.
There are currently 30 EiB of storage securing the network which is about 3% of the total storage market sold every year and a much higher percentage of the retail HDD market. Chia also has significantly more full nodes than Bitcoin. And it's only been out for a few months.
> it is arguably more damaging to the environment as there are more toxic chemicals involved in tape than in burning electricity.
Tape drives don't work with Chia. But you're speculating about an environmental impact that is already happening today with hard drives. Maybe you should send a letter to Google or your local politician about the environmental impact of their hard drives if you're actually concerned about that :)
> Chia is basically turning wasting electricity into wasting silicium (or whatever tapes/harddrives are made from).
Does this apply to filecoin?
Does this apply to filecoin?
> Chia is basically turning wasting electricity into wasting silicium (or whatever tapes/harddrives are made from).
That depends on the price of chia. The economics as intended by the chia team are that buying hdd just to farm chia isn’t profitable - only using spare capacity is. We’re already pretty close to that point, with the breakeven on new hdd purchases being about 1 year assuming no further network growth, which of course is a bad assumption.
That depends on the price of chia. The economics as intended by the chia team are that buying hdd just to farm chia isn’t profitable - only using spare capacity is. We’re already pretty close to that point, with the breakeven on new hdd purchases being about 1 year assuming no further network growth, which of course is a bad assumption.
> seems to have the same security guarantees as Bitcoin
It doesn't though. While the PoW in a block commits to all its transactions, POST cannot and does not. Instead the winning farmer separately commits to the transactions with a signature. Which means that a collusion of all recent winning farmers can rewrite tx history at zero cost. Which is not possible in PoW.
It doesn't though. While the PoW in a block commits to all its transactions, POST cannot and does not. Instead the winning farmer separately commits to the transactions with a signature. Which means that a collusion of all recent winning farmers can rewrite tx history at zero cost. Which is not possible in PoW.
No matter how many non-PoW shitcoins you make, the main one (BTC) is not going to change and remains the dominant one. You can't solve the problem by creating more shitcoins, only by crashing the whole field into the ground.
This is only because crypto is still a curiosity. Once a coin gains enough mass adoption to actually function as digital cash by normal people, it will leave Bitcoin in the dust. My bet is on Monero for that, but whether I am right or not, I'm 100% certain that coin won't be Bitcoin.
Bitcoin is like the digital gold. We can all agree on that. I don’t understand why the maxis can’t be happy with that and have to sully any other competitor in the space that are actually trying to be a currency or dozens of other potentially useful things. Bitcoin is obviously not good for small and fast transactions for example.
Designing a new blockchain that is good at that is innovation. Not a “shitcoin”.
Designing a new blockchain that is good at that is innovation. Not a “shitcoin”.
Unfortunately, there’s really no way for anyone to ever accuse any cryptocurrency of being superfluous without its investors feeling personally attacked on some level. This frequently causes them to lash out.
Also unfortunate is the fact many internet users take silence as evidence of consent, and so just doing the obvious thing here — not having this conversation at all — would actively promote ignorance (see: “Bitcoin is obviously not good for small and fast transactions”).
> Designing a new blockchain that is good at that is innovation. Not a “shitcoin”.
Blockchains don’t create efficiencies: if not for decentralization and censorship resistance, which inherently come at a higher cost than centralization, there would be little point in the technology at all. A plain immutable database with cryptographic proofs of inclusion — e.g. ImmuDB — hosted by a trusted org would perform orders of magnitude better than a blockchain at the very same tasks.
As most people can plainly see, what passes for “innovation” in the blockchain space is often a solution in search of a problem, launched first and foremost as a courtship display to HNWIs, socially signaling for them to invest in the cryptocurrency at hand under the guise of it being “innovative”. Ethereum 2.0’s newly introduced “RocketPool” (RPL) token [1] is an unwitting quintessential example of this:
“Couldn’t there be other ways of doing this which aren’t obviously designed to enrich the founders?”
Put simply, launching a superfluous blockchain and token is just poor etiquette, and the people who point out this dynamic don’t deserve to be dismissed with endearing terms.
Bitcoiners have nothing against defi, it’s just a question of whether a new token or blockchain is needed to do the things these people purportedly want to do for the world, or whether the new token/blockchain is really just a pretense for self-enrichment.
HTH
See also: Nomic [2], SmartBCH, or Stacks
[1]: https://www.reddit.com/r/ethstaker/comments/ncqqu2/rocketpoo...
[2]: https://nomic.io/
Also unfortunate is the fact many internet users take silence as evidence of consent, and so just doing the obvious thing here — not having this conversation at all — would actively promote ignorance (see: “Bitcoin is obviously not good for small and fast transactions”).
> Designing a new blockchain that is good at that is innovation. Not a “shitcoin”.
Blockchains don’t create efficiencies: if not for decentralization and censorship resistance, which inherently come at a higher cost than centralization, there would be little point in the technology at all. A plain immutable database with cryptographic proofs of inclusion — e.g. ImmuDB — hosted by a trusted org would perform orders of magnitude better than a blockchain at the very same tasks.
As most people can plainly see, what passes for “innovation” in the blockchain space is often a solution in search of a problem, launched first and foremost as a courtship display to HNWIs, socially signaling for them to invest in the cryptocurrency at hand under the guise of it being “innovative”. Ethereum 2.0’s newly introduced “RocketPool” (RPL) token [1] is an unwitting quintessential example of this:
So if insurance isn't the real reason, then why do node operators
need to buy an additional 10% in RPL ($5,600 at current prices)? The
only logical answer is to force buying pressure and pump the token.
Adding a token means the protocol is now more likely to contain bugs,
audits are more difficult, users are confused, and taxes become
a nightmare.
I hope greed isn't the real driving force behind the RPL token,
but that's the only conclusion I can draw. They increased smart
contract risk for a payday, and it's possible the entire Ethereum
ecosystem will pay for it.
“Couldn’t there be other ways of doing this which aren’t obviously designed to enrich the founders?”
Put simply, launching a superfluous blockchain and token is just poor etiquette, and the people who point out this dynamic don’t deserve to be dismissed with endearing terms.
Bitcoiners have nothing against defi, it’s just a question of whether a new token or blockchain is needed to do the things these people purportedly want to do for the world, or whether the new token/blockchain is really just a pretense for self-enrichment.
HTH
See also: Nomic [2], SmartBCH, or Stacks
[1]: https://www.reddit.com/r/ethstaker/comments/ncqqu2/rocketpoo...
[2]: https://nomic.io/
I think this conclusion is correct. I can think of two reasons why no other token has been able to surpass Bitcoin:
- Network effects arising as a result of having many crypto markets which use BTC as the base currency. This gives BTC a lot of exposure on trading platforms. BTC is therefore a gateway to the crypto ecosystem; kind of like a reserve currency.
- Most big mainstream investors don't have any interest in advancing the field. Their main concern is preventing crypto from disrupting their existing corporate interests. They will buy a majority stake in a crypto and then encourage founders to waste time and resources... They want to create jobs to keep developers busy on useless activities; that way these developers are not competing with corporate interests. Also, because all these wasteful crypto projects occupy all the top rankings on coinmarketcap and occupy most investors' trading screens, it prevents smaller, more promising projects from getting any attention so it prevents the crypto industry from becoming disruptive. (Though at best this will probably only delay things by a decade or so until new exchanges start launching and start listing different non-mainstream tokens).
- Network effects arising as a result of having many crypto markets which use BTC as the base currency. This gives BTC a lot of exposure on trading platforms. BTC is therefore a gateway to the crypto ecosystem; kind of like a reserve currency.
- Most big mainstream investors don't have any interest in advancing the field. Their main concern is preventing crypto from disrupting their existing corporate interests. They will buy a majority stake in a crypto and then encourage founders to waste time and resources... They want to create jobs to keep developers busy on useless activities; that way these developers are not competing with corporate interests. Also, because all these wasteful crypto projects occupy all the top rankings on coinmarketcap and occupy most investors' trading screens, it prevents smaller, more promising projects from getting any attention so it prevents the crypto industry from becoming disruptive. (Though at best this will probably only delay things by a decade or so until new exchanges start launching and start listing different non-mainstream tokens).
Much of the BTC as base currency isn’t actually BTC on the blockchain - but “BTC” held by the exchange and transferred between customers via a database and NOT on chain.
I'm a blockchain developer and I wrote a DEX from scratch so I know exactly how that works :)
It doesn't change the fundamentals.
It doesn't change the fundamentals.
Bitcoin is far from #1 in terms of transactions per day which seems like the only important measurement of adoption.
For the purposes of environmental hazard, it isn't number of transactions that matter but number of miners. That in turn is going to depend on the expected payout to miners (either in value of new coin or in transaction fees). New coin mining rate is fixed for bitcoin, so the only parameters one can change to reduce the environmental impact are value and transaction fees.
But as the coin with the largest market cap, greater than the next 9 put together [1], is by far the biggest one.
I agree though. Bitcoin isn't the only crypto coin worth talking about.
[1] https://www.forbes.com/advisor/investing/top-10-cryptocurren...
I agree though. Bitcoin isn't the only crypto coin worth talking about.
[1] https://www.forbes.com/advisor/investing/top-10-cryptocurren...
If transactional demand were the only useful adoption metric for money, where would that leave gold?
The most important factor in a particular asset’s “adoption” as currency is its propensity to act as the unit of account for international settlement between nation-states.
The most important factor in a particular asset’s “adoption” as currency is its propensity to act as the unit of account for international settlement between nation-states.
Gold has more transactions per day than all crypto coins combined. In terms of value it’s moving ~200 billion dollars per day in exchanges.
Exchange transactions and on-chain transactions are not the same, no?
I am talking about gold on exchanges, that’s excluding real world gold transactions. Adding or removing exchange transactions on both sides isn’t enough to surpass or even come close to gold by either total volume or total dollar value of transactions.
Look it up yourself if you don’t believe me. I always find it amusing that people are downvoting objective facts, but hey emotions trump truth.
Look it up yourself if you don’t believe me. I always find it amusing that people are downvoting objective facts, but hey emotions trump truth.
If you're looking at in in terms of transaction on the blockchain perhaps, but the reality is that a single transaction on the blockchain actually maps to many other transactions (for example, exchanges batch their outputs, so even though it appears as a single transaction, they could be paying hundreds of people at a time, likewise for lightning or other layers).
Even the most generous interpretation of the lightning network doesn’t actually add enough transactions to get %1.
In theory it could, but Bitcoin simply isn’t used for much beyond speculation right now.
In theory it could, but Bitcoin simply isn’t used for much beyond speculation right now.
The absolute number of transactions is of little importance. Bitcoin moves around a billion+ dollars an hour. Ethereum is 1/10 of that. So Bitcoin is definitely #1 in terms of transacted value per day, which is the only important measure of adoption.
Not true. Ethereum moves about 10 billion a day while Bitcoin moves about 9 billion a day. https://money-movers.info/
This is just comparing the base assets, adding in stablecoins makes the gap even larger with Ethereum moving 27 billion and Bitcoin moving 9 billion.
This is just comparing the base assets, adding in stablecoins makes the gap even larger with Ethereum moving 27 billion and Bitcoin moving 9 billion.
Bitcoin will eventually fade away, since the only significant thing that's actually happening in crypto space is actually smart contracts, and BTC will never implement that. In 10 years it it will be a historical curiosity.
Also - shitcoins? So DOT, ALGO are shitcoins? You seem out of the loop.
Also - shitcoins? So DOT, ALGO are shitcoins? You seem out of the loop.
Smart contracts don't need to be implemented at the base layer, you can have other layers and protocols and still transact in Bitcoin.
There is rsk, sovryn and rgb on lightning and you can still use Bitcoin with ethereum or other smart contract platforms.
There is rsk, sovryn and rgb on lightning and you can still use Bitcoin with ethereum or other smart contract platforms.
One thing that PoW has for it is this idea of "something outside the system". In essence the miners are somewhat economically forced to sell their mined coins in order to rent the energy/mining-rigs. Hence helping with re-distributing the wealth across the network - presumably in a very fair fashion since it's the free market (exchanges).
In PoS this re-sell doesn't happen. Once you are chosen to mine a block (because of your stake) you mine it and that's it. You're not incentivized to redistribute your coins. You can hoard them because you don't have to rent any resources from outside the system.
I hate PoW energy consumption as well and I think that its purpose - literally competing to consume more energy - is quite horrible. But so far I don't think PoS offers the same properties as PoW: a fairer system to redistribute coins.
In PoS this re-sell doesn't happen. Once you are chosen to mine a block (because of your stake) you mine it and that's it. You're not incentivized to redistribute your coins. You can hoard them because you don't have to rent any resources from outside the system.
I hate PoW energy consumption as well and I think that its purpose - literally competing to consume more energy - is quite horrible. But so far I don't think PoS offers the same properties as PoW: a fairer system to redistribute coins.
The article assumes that PoW cannot be done in an energy efficient way.
Last year I wrote an article on how to do PoW in an energy efficient way by using the digital signing capability from the NFC chip of modern passports.
The proposal was discussed here: https://news.ycombinator.com/item?id=23066477
Last year I wrote an article on how to do PoW in an energy efficient way by using the digital signing capability from the NFC chip of modern passports.
The proposal was discussed here: https://news.ycombinator.com/item?id=23066477
That's trusting private keys of passport-issuing governments and makers of the NFC chips. If you can trust an authority like that, then you don't even need a blockchain.
The whole scheme will fall apart as soon as value of cheating will be higher than the cost of equipment needed to extract keys from a passport.
The whole scheme will fall apart as soon as value of cheating will be higher than the cost of equipment needed to extract keys from a passport.
That's of concern but solutions to these problems have been discussed in the original post.
This includes:
- Have a custom difficulty for every single passport so that it wont be profitable to extract the private key. Let's say a passport has already mined a block, then it will be twice as difficult for that same passport to mine a second one.
- Make it so that 51% of the countries have to collude in order to run a double spend.
Now think about the advantages:
- No Botnets mining it.
- Potentially many more "small" miners (individuals). Not huge mining farms somewhere in China or Island.
- Have a custom difficulty for every single passport so that it wont be profitable to extract the private key. Let's say a passport has already mined a block, then it will be twice as difficult for that same passport to mine a second one.
- Make it so that 51% of the countries have to collude in order to run a double spend.
Now think about the advantages:
- No Botnets mining it.
- Potentially many more "small" miners (individuals). Not huge mining farms somewhere in China or Island.
You don't need PoW mining or any sophisticated consensus at all if you use tamper-proof hardware. Here is my proposal of using FIDO keys https://news.ycombinator.com/item?id=26214175
> tamper-proof hardware
Does not exist. FIDO keys are merely tamper resistant.
Does not exist. FIDO keys are merely tamper resistant.
There is a market of secure microchips and it's evolving. Of course, there are no 100% secure solutions, but we're heading towards practical security. There are no full-proof solutions for anything in life. Even Bitcoin is not full-proof. You just need to capture coordinators of a couple of mining pools. I believe collecting those in China will be enough to gain 51% control.
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How about a proof of negative energy requirement? Like how much solar electricity you generate or CO2 you scrub out of the air.
Maybe someone has a really clever idea but I do not think anything rooted in the real world can work. You will always need some kind of sensor to record whatever it is that you are doing in the real world and you will have to prevent people from faking those sensor readings. If you had a central authority as root of trust you might be able to build some tamper-proof device that provides cryptographically attested values but I can not think of a way to do something like this without already having a root of trust.
This is called the oracle problem.
The proposed solutions are in the same vein as security in base layer consensus mechanism: create an economic incentive to be accurate over time. Make sensors/sensor data compete to be designated as roots and gain some sort of revenue. Reputation is hard to build, but easy to destroy.
The proposed solutions are in the same vein as security in base layer consensus mechanism: create an economic incentive to be accurate over time. Make sensors/sensor data compete to be designated as roots and gain some sort of revenue. Reputation is hard to build, but easy to destroy.
I think they are similar but not identical problems. For things like some stock price I can see how you could have several competing oracles that can build trust over time, but if you want to monitor and report the amount of solar energy I am producing for mining I can not see how this could work. Especially not if you want to preserve anonymity which kind of rules out that miners crosscheck each other by placing their own sensors.
Kevin O'Leary from Shark Tank pushes for a sustainable Bitcoin. His proposed solution is to have basically "certified" Miners mine clean Coins and never exchange them. Of course if this takes over Bitcoin isn't really decentralized anymore, but he thinks Institutional Investors would prefer that.
If you are willing to do that, then make them certified ledger maintainers and throw out the entire mining overhead and make them use a good old SQL database. Sprinkle as much cryptography on top of that as you want to feel happy about unforgeability and such. The only reason to have a mining process is to allow anonymity, when you give up on that, mining becomes pointless. Also Bitcoin has not been decentralized for a long time, the idea that every Bitcoin user gets a vote in the consensus process went out the window a decade ago.
I'd say the most effective way for me to scrub a lot of CO2 out of the air is to burn a lot of fossil fuels, and then scrub 80-90% of it (or however efficient scrubbers are). Seems like the wrong incentive?
I feel this is somewhat similar to the story with trees. See e.g. https://www.bloomberg.com/news/newsletters/2021-04-21/money-... and https://www.theguardian.com/environment/2021/apr/11/negotiat... .
I feel this is somewhat similar to the story with trees. See e.g. https://www.bloomberg.com/news/newsletters/2021-04-21/money-... and https://www.theguardian.com/environment/2021/apr/11/negotiat... .
Well human labor is a somewhat renewable source of energy. And when people perform work for us it saves us the energy of performing the same work ourselves in the future. And when people perform work to produce artifacts such as planted crops, structures, machines, buildings, materials, working inventory the work is stored in physically observable material capital held on land. If we want to coin the material capital and place a shared currency into circulation backed by material capital this can be accomplished by having public employees of local land loan offices appraise the minimum labor replacement cost of the material capital which the borrow agrees to hold on site and require the loan to be repaid before the capital fully depreciates.
If you don't mind a completely centralised cryptocurrency, https://solarcoin.org distributes coins based on how much solar energy you produce.
That's great, but doesn't really compete with Bitcoin and others, which aim for censorship-resistance through decentralisation.
That's great, but doesn't really compete with Bitcoin and others, which aim for censorship-resistance through decentralisation.
That is basically what Bitcoin is... because the cheapest energy is the one you can produce yourself from renewables.
Using resources to build a solar panel that only generates electricity to feed into a bitcoin mine that basically turns that solar energy straight back into heat is a net energy negative. The only conceivable benefit is increased economies of scale for the production of solar panels.
I am talking about generating electricity and NOT using it for mining.
I am talking about generating electricity and NOT using it for mining.
You're only thinking of honest miners.
The cheapest energy is the one you steal.
The cheapest energy is the one you steal.
If this were true, we would not be in the middle of a climate crisis right now.
I cant believe that people still think anything other than PoW can provide the cryptographic guarantees required for a real cryptocurrency.
People need to think it through.
In PoS - you stake the coin itself, which is initially worthless when a coin is made
In PoB - how can you prove that you actually burned coins?
In PoC - everyone anyway computes millions of "answers" to store. So you use energy AND and waste valuable disk space too. The guy with the biggest HDD (or maybe 24/7 powered RAM disk) will be the winner always.
People need to think it through.
In PoS - you stake the coin itself, which is initially worthless when a coin is made
In PoB - how can you prove that you actually burned coins?
In PoC - everyone anyway computes millions of "answers" to store. So you use energy AND and waste valuable disk space too. The guy with the biggest HDD (or maybe 24/7 powered RAM disk) will be the winner always.
Proof of capacity, as they call it here, is the same as proof of work for all practical purposes until the network size stabilizes. Plotting space is energy intensive, and a miner must continuously plot to maintain the value of its existing plots as the network grows. If the network size stabilizes or shrinks, then it becomes more efficient than PoW, but in any growth phase it's the same.
We've had PoS for 10 years, PoS and things that make use of the computation for other functions than security are the best ways forward for crypto.
Technically, the consensus mechanism is the mining lottery, which is how transaction order is finalized, preventing double spends.
The scheme for commitment of a scarce resource (e.g. PoW, PoS) is the Sybil resistance scheme, which is what makes lottery participation conform to some notion of fairness. You have to buy your lottery tickets.
The scheme for commitment of a scarce resource (e.g. PoW, PoS) is the Sybil resistance scheme, which is what makes lottery participation conform to some notion of fairness. You have to buy your lottery tickets.
Can you win at the BTC mining lottery with just one ticket?
Is it worth mining with a slow machine?
Sure, you could. But much like the real lottery, it's not worth playing a game that has negative expected value. At this point, my understanding is that mining BTC with anything other than an ASIC is not going to be worth the cost in electricity.
PoW isn't necessarily bad, if the work can be made useful.
e.g. https://en.wikipedia.org/wiki/Folding@home
I vaguely remember hearing about some coin proposing a Folding@home concept. Does anyone know of any novel Po(useful)W coins?
e.g. https://en.wikipedia.org/wiki/Folding@home
I vaguely remember hearing about some coin proposing a Folding@home concept. Does anyone know of any novel Po(useful)W coins?
The ideal proof of work algorithm should serve no other useful purpose besides enabling disparate actors to provably sacrifice resources foreign-to-the-system. Anything the PoW algo does which is useful above and beyond provable sacrifice increases the incentive for PoW miners to attack the network.
For example, if you could either use your GPU to mine $COIN for $10/day or to mine $ANTICOIN for $1/day, you could attack $COIN in full knowledge that your GPUs would still earn $1/day of $ANTICOIN afterwards.
For example, if you could either use your GPU to mine $COIN for $10/day or to mine $ANTICOIN for $1/day, you could attack $COIN in full knowledge that your GPUs would still earn $1/day of $ANTICOIN afterwards.
There is grid coin using BOINC instead of folding@home. There is also primecoin (from the inventor of PoS) that searches for prime numbers. Don't know if either are still active.
What about nano and banano?
Banano in particular has abused the airdrop (and thus distribution) system. They had an airdrop in Feb (supposed to go out in March) for Nano holders (same team) that they leveraged into a ton of publicity and people buying their coins and then just didn't give it out - in fact the project lead is hostile about it on their discord while doing more separate airdrops.
Oh.
It's nice that the IEEE is waking up to this fact in 2021. We've had POS, low-energy requirement for a while now.
Some POS chains like Avalanche have nodes that can run on little more than an RPI.
Some POS chains like Avalanche have nodes that can run on little more than an RPI.
avalanche is nice. but it it is solidity. afaik solidity prevents scalability by assumption of global mutable data access in single transaction.
More parallelizable execution environments can run on top of the EVM. That's what Fuel is building with its Ethereum-based Optimistic Rollup, with a goal of eventually making the UTXO model Turing Complete (Fuel v2.0):
https://docs.fuel.sh/v1.1.0/Future%20Roadmap/Planned%20Featu...
https://docs.fuel.sh/v1.1.0/Future%20Roadmap/Planned%20Featu...
Solidity is only the language of the C-Chain, which is basically the EVM with better scalability but only constitutes one part of the ecosystem.
It is currently the most visible part because most of the protocol's features are still under development.
But the Avalanche protocol itself isn't tied to the EVM or Solidity, it is designed to let you run any customized blockchain.
It is currently the most visible part because most of the protocol's features are still under development.
But the Avalanche protocol itself isn't tied to the EVM or Solidity, it is designed to let you run any customized blockchain.
Cryptocurrency blockchains don’t need to be.
I love DASH two–layer systen
Cardano is proof of stake and getting a ton of attention lately in being added to Grayscale’s crypto ETF as it’s 3rd largest holding. They even sold other assets, Bitcoin, Ethereum, to do it. It’ll be interesting to watch.
Proof of Stake is superior to Proof of Work because with PoW, it's possible for someone to take over the network and tamper with the data if they control more than 50% of the mining power. The cost of buying new mining hardware grows linearly as you buy more of it. On the other hand, with PoS, an attacker would need to control more than 50% of tokens, the cost of acquiring tokens grows exponentially as you approach the 50% mark (it likely won't even come close) since bids drive the token price up.
PoS uses far less electricity than PoW, it's incomparable by orders of magnitude. A typical PoS network uses less electricity than a typical mid-size tech company... PoW uses the electricity of an entire country.
With PoS, if the initial distribution is done fairly without ill intent, then it tends to decentralize further by itself over time as early adopters cash out and newcomers buy in.
Finally, a lot of PoS projects are focused on interoperability, this means that they aim to grow into an ecosystem with multiple similar PoS tokens (with different use cases). It allows for free movement of value between different blockchains and they develop into a hierarchy connected via a network for exchanges and decentralized exchanges. There is no fairer, more decentralized system (logically, politically and architecturally) than a multi-token PoS ecosystem.
PoS uses far less electricity than PoW, it's incomparable by orders of magnitude. A typical PoS network uses less electricity than a typical mid-size tech company... PoW uses the electricity of an entire country.
With PoS, if the initial distribution is done fairly without ill intent, then it tends to decentralize further by itself over time as early adopters cash out and newcomers buy in.
Finally, a lot of PoS projects are focused on interoperability, this means that they aim to grow into an ecosystem with multiple similar PoS tokens (with different use cases). It allows for free movement of value between different blockchains and they develop into a hierarchy connected via a network for exchanges and decentralized exchanges. There is no fairer, more decentralized system (logically, politically and architecturally) than a multi-token PoS ecosystem.
> Proof of Stake is superior to Proof of Work because with PoW, it's possible for someone to take over the network and tamper with the data if they control more than 50% of the mining power. The cost of buying new mining hardware grows linearly as you buy more of it. On the other hand, with PoS, an attacker would need to control more than 50% of tokens, the cost of acquiring tokens grows exponentially as you approach the 50% mark (it likely won't even come close) since bids drive the token price up.
You don’t need to own tokens to have control over them, you just need to offer staking as a feature. See Coinbase.
You don’t need to own tokens to have control over them, you just need to offer staking as a feature. See Coinbase.
This actually helps with decentralization since there are usually multiple exchanges and it's very rare for 1 exchange to hold more than 10% of all tokens.
I’m not saying you’re wrong, but what’s the source of that estimate?
I'm a blockchain developer. Worked on a top PoS blockchain for several years then launched 2 additional PoS blockchains since. I've also analyzed many other PoS blockchains over the years.
Exchange wallets improve the security of a PoS blockchain because these wallets are high-exposure and community can be confident that the different exchange wallets belong to different entities.
Because the ledger is public, existing big token holders can agree to HODL some % of their tokens if they are concerned that an attacker is trying to acquire 50% of all tokens. The main concern in PoS are 'sock puppets' - One person controlling multiple accounts pretending to be multiple different people (to evade detection). Because exchange wallets are well known, community can be confident that they are not sock puppets; this means that exchanges add some degree of security to the blockchain... In aggregate, those tokens are safe; it's extremely unlikely that all exchange wallets would be hacked at the same time (unless there is something wrong with the blockchain code).
Exchange wallets improve the security of a PoS blockchain because these wallets are high-exposure and community can be confident that the different exchange wallets belong to different entities.
Because the ledger is public, existing big token holders can agree to HODL some % of their tokens if they are concerned that an attacker is trying to acquire 50% of all tokens. The main concern in PoS are 'sock puppets' - One person controlling multiple accounts pretending to be multiple different people (to evade detection). Because exchange wallets are well known, community can be confident that they are not sock puppets; this means that exchanges add some degree of security to the blockchain... In aggregate, those tokens are safe; it's extremely unlikely that all exchange wallets would be hacked at the same time (unless there is something wrong with the blockchain code).
This passage reflects a deep-seated, widespread misunderstanding of how/why Bitcoin works. I suspect the author knows, but the brevity of the article prevents actually explaining the issue. This is a recurring problem in this space and has opened up a large fraud opportunity as every bottle of snake oil looks the same to those who don't do the deep technical dive.
Proof-of-work has nothing to do with ensuring the validity of transactions. Transactions contain all of the information needed to detect invalid transactions. Hashes, signatures, scripts, and amounts can all be checked and will be rejected if invalid. The validity of every transaction can be tested without proof-of-work. Systems like this had been developed prior to Bitcoin.
So it's possible to eliminate every kind of fraud through cryptography alone, except one.
The problem proof-of-work solves is double spending, a term you won't find in the article. A malicious actor can try to spend the same coin twice (or more). Both versions of the double spend transaction are valid, but a node can only accept one. Which one does it accept? It accepts the one on the block with the most cumulative proof-of-work ("strongest chain"). In the event of a tie, the node accepts the first version it saw. The strongest proof-of-work chain can therefore change from one moment to the next as blocks are received.
Proof-of-work imposes a non-recoverable cost to publishing a block of transactions. That cost and its finality discourage double spending by making the publication of double spending transactions permanently expensive. An attacker needs to out-spend the entire rest of the network to succeed, and loses everything spent if the attack fails. The cost of a failed attack can never be recovered.
So any scheme to replace proof-of-work needs to maintain that element of irrecoverable loss of value for a failed double spending attack. It hasn't been an easy nut to crack. A lot of projects claimed to have done it only to discover some flaw in the game mechanics or technology.