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How Monero’s proof of work works

blog.alcazarsec.com

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Re: How Monero’s proof of work works

#121

Post by hyc_symas »

idiotsecant wrote: post #110
AureliusMA wrote: post #33

Earlier quoted context omitted.

There was a proposal on Ethereum that didn't succeed (progpow) since they were already in the late stage of transitionning to PoS. Ethereum did quite a good job at keeping asic advantage moderate (the speedup was 100% max - not orders of magnitude). RandomX is basically progpow that succeeded. You might be interested in Chia's Proof of Space and Time... and how it collapsed!

I don't know if PoW based approaches make much sense in the modern environment, anyhow -even very clever ones that provide ASIC resistance. Ethereum has been doing real proof of stake (and not delegated proof of stake which is both easier and terrible from a system safety perspective) for quite a while and it's seemingly cheap, effective, and robust.

PoW is useful in far more situations than PoS. A derivative of RandomX is now used to protect TOR too (Equi-X). https://github.com/tevador/equix/blob/master/devlog.md

Re: How Monero’s proof of work works

#122

Post by hyc_symas »

tomjen3 wrote: post #109
dgacmu wrote: post #3

If folks are interested in the old Monero PoW function (and, uh, the reason they changed it), I wrote up a thing about it a long time ago: https://da-data.blogspot.com/2014/08/minting-money-with-mone... The history of people trying to design GPU or ASIC-resistant proof-of-work functions is long and mostly unsuccessful. I haven't looked into RandomX; it's possible they've succeeded here (or possible that with the alt-…

They had to design a specialized verification function, which I imagine would be the easy way to break it. The brilliant part of Bitcoin is that it uses very widely known crypto primitives - verification is the same as getting the right seed (you just happen to be told what the right seed is, rather than having to pay for it to be discovered).

You must be on drugs. There is no separate specialized verification function. It's the same algorithm for verification as for mining.

Re: How Monero’s proof of work works

#123

Post by grey-area »

kedihacker wrote: post #83
grey-area wrote: post #76

Earlier quoted context omitted.

Gold has a use value.

90% percent of gold is used in jewelry or bars so use value isn't that much unless price is prohibiting use cases.

Jewellery is a use for gold, people like it because it is pretty and shiny and easily worked not just because it is rare.

The artificial scarcity and lack of actual use of bitcoin really isn’t the same.

Re: How Monero’s proof of work works

#124

Post by dgellow »

AureliusMA wrote: post #48
dgellow wrote: post #27

Earlier quoted context omitted.

It’s an interesting technical problem to solve. But after 15y still has no meaningful benefits for our societies. Other than gambling/speculation/illegal stuff. The transformative cryptocurrency shift didn’t happen

We are very far from 2140, the year the last bitcoin will be mined. 15 years is nothing, this is a very long term paradigm shift.

You seem confused. The claim has never been that the paradigm will shift when all bitcoins have been mined. When all bitcoins are mined BTC will be even more deflationary and miners won’t get rewards from mining. But that has nothing to do with bitcoin being useful for society. And it should be pretty obvious that a deflationary currency is a terrible currency. If it is actually useful as a currency in 2140 it is also way more likely that it will be forked to postpone that deadline, but that’s beside the point.

We are 15y in and there is still no trace of a meaningful use case outside of the ones I mentioned. I don’t think it’s a failure of bitcoin itself (it’s a neat proof of concept), I see it more as a complete delusion of people pushing cryptocurrencies

Re: How Monero’s proof of work works

#125

Post by idiotsecant »

hyc_symas wrote: post #121
idiotsecant wrote: post #110

Earlier quoted context omitted.

I don't know if PoW based approaches make much sense in the modern environment, anyhow -even very clever ones that provide ASIC resistance. Ethereum has been doing real proof of stake (and not delegated proof of stake which is both easier and terrible from a system safety perspective) for quite a while and it's seemingly cheap, effective, and robust.

PoW is useful in far more situations than PoS. A derivative of RandomX is now used to protect TOR too (Equi-X). https://github.com/tevador/equix/blob/master/devlog.md

Yes I suppose it's difficult to stake something of value when the system you're securing is not stapled to a currency.

Re: How Monero’s proof of work works

#127

Post by dgellow »

tardedmeme wrote: post #68
dgellow wrote: post #27

Earlier quoted context omitted.

It’s an interesting technical problem to solve. But after 15y still has no meaningful benefits for our societies. Other than gambling/speculation/illegal stuff. The transformative cryptocurrency shift didn’t happen

When the USA collapses it could become the new global reserve currency (it won't but it could) Point is, it's a currency you can use right now independently from the increasingly unstable-looking US dollar. You could also use euros, yuan, rupees, or Australian dollars but it's really hard to get an account in those currencies if you don't live in those countries. Crypto is much easier to get access to.

We can create various use case scenarios, that‘s what has been done since 2009, but there is no signs that’s something we are moving towards and so far the only use cases that stuck are the ones I mentioned. For a global currency you would need something stable and while the US is declining, in comparison cryptocurrencies (ignoring stablecoins) are a nightmare of instability

Re: How Monero’s proof of work works

#128

Post by newsy-combi »

dhosek wrote: post #71
j4cobgarby wrote: post #5

I never quite understand this stuff, maybe someone can help. Are cryptocurrencies supposed to be a potential replacement for real life cash? This was my understanding of the motivation behind Bitcoin, at least. If so, why does it make sense that people can "generate" cash by proving some amount of work done? This of course cannot be done with normal cash. Is the main functionality of these cryptocurrencies supposed t…

One of the weird things about our world is that money is central to everything, but it’s hard to understand how it works. There’s a great deal of handwaving around how, for example, dollars are created, much of which is, in fact, not correct at all (most dollars are created not by the government, or even the Federal Reserve, but by private banks, via a mechanism which I will not pretend to fully understand). The big…

I thought private banks create money the moment they take out a credit from the central bank. The central bank's job is to set the interest rate for those loans, et viola.

Re: How Monero’s proof of work works

#129

Post by tardedmeme »

ballofrubber1 wrote: post #107
tardedmeme wrote: post #91

Earlier quoted context omitted.

In a deflationary system, rich people just hold money, and earn more in interest from holding the money, than everyone else earns combined. They use that interest to buy things from the poor while not producing or investing themselves. Poor people realize if they switch currencies they can have more things because they don't have to give a percentage of everything to the rich. This makes the system unstable. Bitcoin…

This still does not work. “Holding money and earning interest from holding it” is a category error. Holding Bitcoin pays zero yield. No coupon, no dividend, no debtor, no tax stream, and no mechanism by which poor people pay holders a percentage. If someone earns interest, they are not merely holding money; they are lending it, which means they are taking risk and providing capital. The “numbers on a spreadsheet” obj…

Real value deteriorates due to entropy. If I harvested some lettuce this week, in a year I don't still have lettuces - I have a pile of stinky mush. Keeping value steady requires a continual input of effort.

I'd accept "leaky currency" as a substitute for inflation. The important thing about inflation is that you have to keep running just to stay in one place - not that the numbers keep going up. Stable prices are nice, I agree on that.

Bitcoin's volatility is caused by its deflationary nature. Monero is inflationary, and much less volatile.

In an inflationary system, normal people are forced to keep earning money. "Becoming amateur investors" is your way to say "keep generating real value". If you want to surpass Elon Musk you have to invest, but that's nothing to do with the inflationary currency. That's because Elon Musk uses deflationary currencies like land and Ponzi currencies like Tesla stock. He just sits on them, and he will get out of the Ponzi ones before the top because he controls them. As they say, bad money drives out good. But you cannot build a stable economy on hyper-volatile gambling.

Re: How Monero’s proof of work works

#130

Post by hyc_symas »

tardedmeme wrote: post #129
ballofrubber1 wrote: post #107

Earlier quoted context omitted.

This still does not work. “Holding money and earning interest from holding it” is a category error. Holding Bitcoin pays zero yield. No coupon, no dividend, no debtor, no tax stream, and no mechanism by which poor people pay holders a percentage. If someone earns interest, they are not merely holding money; they are lending it, which means they are taking risk and providing capital. The “numbers on a spreadsheet” obj…

Real value deteriorates due to entropy. If I harvested some lettuce this week, in a year I don't still have lettuces - I have a pile of stinky mush. Keeping value steady requires a continual input of effort. I'd accept "leaky currency" as a substitute for inflation. The important thing about inflation is that you have to keep running just to stay in one place - not that the numbers keep going up. Stable prices are ni…

Monero is disinflationary, not inflationary. The rate of new coin emission is only enough to maintain equilibrium with the rate of coins being lost (due to people losing wallet keys, etc.). So your comment about being forced to keep earning doesn't apply to Monero.
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