PoW came from a paper by Cynthia Dwork ( https://www.wisdom.weizmann.ac.il/~naor/PAPERS/pvp.pdf ) not Hashcash
It was independently discovered by Adam Back as Hashcash, and that was the proof-of-work algorithm Satoshi was familiar with.
Proof of stake is incapable of producing a consensus
311–320 of 822 posts
Re: Proof of stake is incapable of producing a consensus
#312Whether PoS will work, I don't know. But the author didn't realize that PoW is certainly doomed. PoW miners tend to spend more and more resources on finding blocks, until the cost approaches the rewards. But the rewards go up as the cryptocurrency becomes more popular, because the price and transaction fees go up. Therefore, a PoW cryptocurrency tends to "eat the world" as it becomes bigger. That's why Bitcoin is alr…
You haven't explained how mining hashrate causes popularity of the underlying cryptocurrency.
The cause and effect is the other way around. Popularity of the cryptocurrency causes popularity of mining (the price goes up so mining is more profitable and more mining can happen).
Re: Proof of stake is incapable of producing a consensus
#313Whether PoS will work, I don't know. But the author didn't realize that PoW is certainly doomed. PoW miners tend to spend more and more resources on finding blocks, until the cost approaches the rewards. But the rewards go up as the cryptocurrency becomes more popular, because the price and transaction fees go up. Therefore, a PoW cryptocurrency tends to "eat the world" as it becomes bigger. That's why Bitcoin is alr…
> Bitcoin is already approaching 1% of global electricity consumption, if it hasn't passed that point already And this is the reason why I cannot take any climate change conversation seriously unless it includes the topic of cryptocurrencies. Whatever the promises of cryptocurrencies were, now most (all?) degenerated into a mechanism for speculation, and effectively into a self-sustaining and self-promoting mechanism…
Not taking climate change conversations seriously because a topic that is barely 1%-2% of the total consumption is neglected? That sounds like a poor excuse.
Re: Proof of stake is incapable of producing a consensus
#314Earlier quoted context omitted.
Smelting metals actually produces something, proof of work just burns electricity for the random chance of winning a lottery
Simply because something is intangible and invisible, like atoms, does not make it any less valuable. It's a system with an immutable monetary policy. Literally unprecedented in human history.
> Literally unprecedented in human history.
Hardly unprecedented, considering that until very recently nations did not have a monetary policy.
Re: Proof of stake is incapable of producing a consensus
#315Whether PoS will work, I don't know. But the author didn't realize that PoW is certainly doomed. PoW miners tend to spend more and more resources on finding blocks, until the cost approaches the rewards. But the rewards go up as the cryptocurrency becomes more popular, because the price and transaction fees go up. Therefore, a PoW cryptocurrency tends to "eat the world" as it becomes bigger. That's why Bitcoin is alr…
> PoW miners tend to spend more and more resources on finding blocks, until the cost approaches the rewards. But the rewards go up as the cryptocurrency becomes more popular, because the price and transaction fees go up. Therefore, a PoW cryptocurrency tends to "eat the world" as it becomes bigger. It’s actually the opposite since the block reward goes down over time
> It’s actually the opposite since the block reward goes down over time
It is true that 10 years ago block rewards were almost 10x what they are today in terms of BTC, but by USD value new rewards are worth several orders of magnitude more today.
Re: Proof of stake is incapable of producing a consensus
#316Whether PoS will work, I don't know. But the author didn't realize that PoW is certainly doomed. PoW miners tend to spend more and more resources on finding blocks, until the cost approaches the rewards. But the rewards go up as the cryptocurrency becomes more popular, because the price and transaction fees go up. Therefore, a PoW cryptocurrency tends to "eat the world" as it becomes bigger. That's why Bitcoin is alr…
> PoW miners tend to spend more and more resources on finding blocks, until the cost approaches the rewards. But the rewards go up as the cryptocurrency becomes more popular, because the price and transaction fees go up. Therefore, a PoW cryptocurrency tends to "eat the world" as it becomes bigger. It’s actually the opposite since the block reward goes down over time
If the price goes up, you can spend more resources to mine a block. But the cost will approach the reward.
Re: Proof of stake is incapable of producing a consensus
#317PoW systems rely on the "phone a friend method" as well. When you download a Bitcoin client from a "friend", you are trusting them to honestly introduce you to the network. If you fall asleep for a period of years, you have to trust your friends to honestly inform you of all of the PoW forks and policy changes that have occurred over that interval. The only difference is that PoS blockchain clients must be bundled wi…
not really, if you fall asleep for a period of years, you can still get a signal of how genuine any proposed fork is by observing the chain of blocks and their difficulties. that's the crucial bit of any PoW system - you can't fake the energy that was spent producing the chain. that's a way to externally validate the honesty of a system and a major scientific breakthrough that satoshi discovered.
also, hi, long time! maksym here =)
Re: Proof of stake is incapable of producing a consensus
#318Earlier quoted context omitted.
> It is not a waste, as it provides physical security, exactly the same as idle nuclear missiles on standby do, or standing armies that are "doing nothing", until a war happens. You don't think those get very wasteful in the real world? And there's no equivalent to a real war situation. You can set it up so you don't need to defend against the equivalent of enemy armies. > The vast majority of mining today uses susta…
There is zero waste in PoW. It’s all useful service, therefore waste term doesn’t apply.
If you use 100 watts incandescent light bulb to light your room with 1 watt LED would do, that is waste.
Re: Proof of stake is incapable of producing a consensus
#319Tezos is Proof of stake, decentralized and clearly has consensus, the three things the author argues cannot occur in a proof of stake system.
I did not find this post convincing especially as many proof of stake systems have been running consistently for years now and with significant transaction and economic volume.
As an example Tezos has decentralized apps such as liquidity pools, collateral based stablecoin systems, nft ecosystems, coin bridges to other networks such as Ethereum (two way) I use these smart contracts on a weekly basis and have done for a long time now.
Tezos manages several orders of magnitude more transaction throughput based on opcode count count vs Bitcoin, transactions, even complex ones cost pennies the network has not been attacked, is worth billions and Tezos energy usage is easily a million times less than Bitcoin.
Re: Proof of stake is incapable of producing a consensus
#320Earlier quoted context omitted.
It’s a system with feedback loops, it’ll eventually level out at some equilibrium. You didn’t provide an actual argument for why it should definitely collapse.
The existence of feedback loops very much doesn't imply a stable equilibrium. Actually, any system that is not overdamped will necessarily not reach an equilibrium. Or maybe the equilibrium is that no country bans it, and PoW currencies don't die on their own due to lack of financial rewards, and PoW artificially inflates the demand and therefore price of energy, leading first to widespread economic issues, then wide…
point is that it's not a closed system that just blows up at some point. as long as there are people interested in keeping bitcoin running - it will keep running. for now economic incentives are enough, and it'll probably be enough forever, worst case - ideological incentives will do it.