Binance founder 'CZ' leaves prison on Friday

Proof of stake is no different than most traditional governance structures such as corporations in that it relies on a committee with an honest majority to keep the system secure. Validators are supposed to act like some kind of completely neutral, decentralized system, but they are not.

For example, the fundamental principle of PoS is slashing for equivocation: when validators present two alternate versions of history (this could be part of a "double spend" attack), they are supposed to be slashed and have their stake taken away.

It takes 1/3 of validators to successfully pass off two versions of history to a double spend victim. However, 1/3 of validators can censor this slashing transaction. So if a double spend attack happens, the perpetrators of the attack are in charge of punishing themselves.

So, the fundamental security mechanism of PoS, equivocation slashing, can in fact never work in practice to punish an actual attack!

Another example is the idea that participation in a PoS chain is permissionless. This is the case in PoW. However, in PoS, 1/3 of the existing validator set could censor any new validators that would like to join, maintaining complete control of the chain. The existing validators only act as if the system is permissionless.

There has been a large amount of thought put into this paradox, and the PoS research community has settled on the idea that if the validator set breaks these norms, then users can just use a new chain with the same state, and a new, more trustworthy validator set. This has several problems:

- Philosophically, what is the point of creating a system that obviously doesn't work as intended, and then when this is pointed out saying "that's not a problem because users don't have to use the system"?

- The coordination of this hypothetical switch to a better validator set is completely unexplored since it is totally outside of the PoS protocol. It may be very disruptive to users and result in downtime, loss of funds sent during the switchover period, multiple new blockchains, or other issues and confusion.

- The fact that the system does not work, and there must always be the possibility of human operators sorting things out based on an undefined recovery procedure means that truly autonomous and truly secure clients are not possible in PoS. This is a problem for both far-out concepts like self-owned self-driving cars, and for bridges between blockchains, which must always rely on either trusting the validators, or a multisig made of trusted people who can stop or reconfigure the bridge.

In fact, there is no clear dividing line between a PoS blockchain, a PoA blockchain (this has a predefined validator set), a multisig, and a single entity running a chain. The only differences between these models are a matter degree of diffusion of authority.

This is what Bitcoin people do not like about PoS. PoW has its own problems, but they are different, and PoW chains do not rely on a set of trusted operators in the same way.

For the economic impact of monetary systems, the main role of currencies is handling credit - handling direct transactions is intuitively the direct application, but the impact of transaction costs ('costs' in the economic theory sense, not only the direct expenses but also any barriers, difficulties, risks, etc) on the economy, while significant, is not as huge as the impact of availability of credit and supply of money.

For example, when considering dollars, having the possibility to detach the dollar from the gold standard was so extremely valuable to the economy that all the possible transaction costs with handling paper or coins are a rounding error compared to that. Enabling fractional reserve banking is an immense effect on the productive output, due to the big increase in productive investment it enables, so it matters a lot whether a monetary system can support that. Historical changes to what metals were used for coins had a huge impact on economy not because of some decrease in transaction costs but because of changes to money supply. Etc.

At it's core, the primary function of finance is (and arguably has historically always been) handling debt, not handling transfers. So evaluating a currency system on the basis of how good it is for transactions is kind of putting the cart ahead of the horse, if the nature of that currency has, as most cryptocurrencies do, a major impact on the money supply (and thus handling debt).

Currencies are used to facilitate trade, which I suppose would be their productive output

Only when and where they've been allowed to.

While you may see that I vigorously comment against all the AI hype, I do not believe AI is as useless and wasteful as crypto currencies.

Beyond the LLM fad, AI is also being used in other pharmaceutical and scientific research as well as modern weather and disaster forecasting.

Also, I believe LLMs will get better over time and far cheaper to operate once they become more widely adapted. Think the super computers of our grand-dad era vs your Android/iPhone.

AI will get better over time and become more beneficial to us, but not in the form of current over hype fad that is flying because Sama needs to protect his investment and exit, he is a businessman above all else. AI innovation will come from the silent group who are busy with actual development and less hype generation. There is a saying that empty whistle makes most noise etc.

My IDE(mostly jetbrains products) make me 10x more productive. Claude/Phind saves me immense amount of time not having to sort through 100 garbage SEO spam results or try to waste time reading incoherent out dated documentation(followed by having to look through the source code) to find an important concept or reference to some third party library/application. These are real values that not only makes my day less stressful, it also makes my employer benefit accordingly by having me available to other important stuff with my freed time during working hours.

Crypto currency did not help anyone, only helped some grifters get rich, some ignorant people to lose money and numerous crooks to run ransomware attacks and easier time moving the loot.